Major step towards a Free Trade Agreement between Australia and India
The Minister for Trade, Simon Crean, with his Indian counterpart Minister of Commerce and Industry Anand Sharma, yesterday welcomed the conclusion of the Australia-India Free Trade Agreement (FTA) Joint Feasibility Study.The Study recommends negotiation of a comprehensive bilateral FTA that includes trade in goods, trade in services, investment and other trade and investment facilitation and cooperation measures, as a single undertaking.
Ministers Crean and Sharma endorsed the feasibility study recommendation noting that both sides would need to undertake further internal processes before negotiations could be launched.
“The joint study finds that an Australia- India FTA is feasible. It makes a strong economic case that both Australia and India would gain significant economic benefits from a comprehensive FTA. An FTA would open up trade, investment and job opportunities in both countries,” Mr Crean said.
“An FTA with India will continue the momentum of Australia’s economic integration with Asia – the fastest growing region in the world.”
Independent modelling conducted for the study by the Centre for International Economics indicates that an Australia-India FTA could result in a net increase in Australia’s GDP by up to US$32 billion (A$45.5 billion) and India’s GDP by up to US$34 billion (A$48.3 billion) over a period of 20 years.
India is Australia’s fastest-growing major two-way trading partner, reflecting the largely complementary nature of the two economies. Two-way trade grew 55 per cent to nearly $22 billion in 2008-09.
“India is the world’s largest democracy and is a market of 1.2 billion people. Its youthful population, diversified economy and growth trajectory present significant opportunity for Australian business, especially in the agriculture, energy, manufacturing, mining and services sectors,” Mr Crean said.
“Australia’s exports to India have increased by an annual average of over 25 per cent over the past five years, making India our fastest-growing major export market. It is our fourth-biggest export market, up from 13th a decade ago.”
Industry consultations in Australia and India revealed broad support for an FTA with India. Australia engaged stakeholders through requests for public submissions and nationwide consultations.
The Government’s top trade priority remains concluding a comprehensive, balanced outcome in the Doha Round of WTO negotiations. But an FTA with India can complement the multilateral trading system. It offers the opportunity to expand bilateral free trade further and create real commercial gains for Australian business.
At the request of the Indian Government, the Australian and Indian Governments began the FTA Feasibility Study after Terms of Reference for the study were agreed in April 2008. The Joint Study Group for the study met four times between August 2008 and September 2009 in New Delhi and Melbourne.
Australia is currently negotiating FTAs with three North Asia nations in China, Japan and Korea. At the start of 2010 the ASEAN-Australia-New Zealand FTA came into force.