India, Australia Set To Launch FTA Talks

by Mary Swire, Tax-News.com, Hong Kong

05 May 2010

Australia’s Minister for Trade, Simon Crean, with the Indian Minister of Commerce and Industry, Anand Sharma, have together welcomed the conclusion of the joint feasibility study for the Australia-India free trade agreement (FTA).

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.

The study recommends negotiation of a comprehensive bilateral FTA that includes trade in goods, trade in services, investment and other trade and investment cooperation measures, in a single agreement. The two ministers endorsed the feasibility study recommendation, while noting that both sides would need to undertake further internal processes before negotiations could be launched.

Crean said: “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.”

“An FTA with India will continue the momentum of Australia’s economic integration with Asia – the fastest growing region in the world,” he added.

India is Australia’s fastest-growing major two-way trading partner, reflecting the largely complementary nature of the two economies. Two-way trade has grown to nearly AUD22bn (USD20bn) in 2008-09. “Australia’s exports to India have increased by an annual average of over 25% over the past five years, making India our fastest-growing major export market,” Crean disclosed. “It is our fourth-biggest export market, up from 13th a decade ago.”

He pointed out that “India is the world’s largest democracy and is a market of 1.2bn 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.”

Industry consultations in Australia and India revealed broad support for the bilateral FTA. Australia engaged stakeholders through requests for public submissions and nationwide consultations.

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