India and Australia signed an Economic Cooperation and Trade Agreement (ECTA) on Saturday. Mr. Piyush Goyal, Minister of Commerce and Industry was present during the ceremony along with his Australian Counterpart, Dan Tehan, and Australian Prime Minister, Scott Morrison.
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The agreement will be operational once the Australian Parliament wraps up its election. Post-elections, a broader free trade agreement will be signed between the two countries. Dan Tehan, Australian Minister for Trade, Tourism and Investment, commented that the well-established economic relations in crucial areas such as education and tourism, professional services, and critical minerals will only be strengthened by the Australian-Indian Economic cooperation and Trade Agreement (ECTA). The Agreement will also create employment opportunities in both countries.
One of the chief items promised by the ECTA includes duty-free access to around 85% of Australian goods and 100% of Indian products. When it comes to services, Australia has offered greater access to around 135 sub-sectors and will even provide India with the most favoured nation (MFN) status in 120 sectors. These cover almost all of India’s major interest areas such as education, health, business services, IT, ITES, and Audio Visual.
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Benefits for the Education Sector
The Trade pact has offered a post-study work visa of two-four years for Indian students on a correlative basis. It also included work and holiday visas for young professionals like Yoga teachers and chefs.
Under this agreement, Australia will extend the post-study work permit of Indian students with a first-class bachelor’s degree in IT and STEM. This is because the country plans to amplify its workforce in these two fields.
Commerce and Industry Minister, Mr Piyush Goyal Commented, ‘Post-study work visas will provide extended options for working in Australia to eligible Indian graduates, postgraduates, and STEM (science, technology, engineering, and mathematics) specialists’.
An initiative called the ‘Maitri’ Scholars Program was launched earlier in February of this year. This program will provide around USD 11 million for a period of four years to aid talented Indian students to study at top universities in Australia.
The Australia-India ECTA will focus on providing recognition to an array of professional qualifications. It will also work on licensing and registration of professional service firms. Indian and Australian Students will have the freedom and flexibility to work where they want.
Before the Pandemic, Indian students contributed around USD 6.1 billion to the Australian Economy. Indian Pupils comprise around 19% of the international student population in Australia. With a strength of 70,000, India is now the second-largest student community. In recent years, students from Australia have also shown interest in pursuing higher studies and working in India. It is hoped that this pact will help students of both countries to achieve their goals.
The trade pact also features an Australia-India Future Skills Initiative which was introduced by Dan Tehan in late March. The Initiative will focus on linking Indian Businesses, Government, students and employers to Australian vocational education and training providers. This will aid in improving the country’s training capacity.
In return, India has provided access to over 103 sub-sectors and MFN Status in 31 sub-sectors under broad service markets. These cover areas such as communication, IT, construction, engineering, and business services.
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India will also allow up to 3,00,000 bales of long-staple Australian Cotton at Zero duty. Added to this, only 13,000 tonnes of Australian oranges and mandarin will get preferential access. New Delhi will also provide preferential access to Australian Wine that falls within the price range of $5-$15 per 750 ml at a concessional duty of 100 per cent.
Both countries are hoping for a two-fold increase in the total value of bilateral trade from $27.5 billion to $50 billion, as the pact comes into effect.
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