India, Australia To Sign FTA Soon

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Australia is ready to secure a Free Trade Agreement (FTA) with India later in 2016. Australian Trade and Investment Minister Andrew Robb recently said that New Delhi and Canberra would sign the FTA by the end of this year. He made the announcement after signing the historic Trans Pacific Partnership Agreement (TPP) with 11 other countries in Auckland, New Zealand over the weekend.

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Robb also said that the FTA between India and Australia would be a big boost for the TPP that would strengthen both traditional areas of trade and investment and so-called 21st century areas, such as e-commerce. “The tariff cuts will deliver material gains for our exporters across the board and place downward pressure on the cost of imported goods for households and businesses, but the benefits that will flow from the creation of a more seamless trading environment are not well understood,” added the Australian minister.

Robb seemed quite confident that Australia and India would sign the FTA sometimes this year, as the two countries are trying hard to solve “some quite sensitive outstanding issues”. As per a feasibility study conducted jointly by the two countries, the comprehensive FTA will help India gain 0.15-1.14% of its GDP, while Australia will gain 0.23-1.17% of its GDP. The volume of two-way trade was USD 12.12 billion in 2014-15. While the volume of India’s investment in Australia was USD 11 billion in April 2000-January 2015, Australia’s investment in India was USD 649.37 million.

As far as the TPP is concerned, Robb stressed that the agreement would eliminate 98% of tariffs among the 12 countries. “The tariff cuts will deliver material gains for our exporters across the board and place downward pressure on the cost of imported goods for households and businesses, but the benefits that will flow from the creation of a more seamless trading environment are not well understood,” he told the media in Auckland.

The US-led TPP agreement not only defines common rules for labour, environment and a trade treaty, but also allows private companies and businesses to compete against state owned companies effectively.

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