The Australian Parliament on Tuesday approved the free trade agreement with India, capping over a decade-long negotiations between two countries. The deal aims to nearly double trade between two countries from the current $27 billion to $50 billion and create 10 lakh jobs in the next five years.
This is the second free trade deal that India clinched in two years after it signed such an agreement with the United Arab Emirates (UAE). India is also negotiating trade deals with the United Kingdom, Canada, Russia, South Africa and Gulf countries.
Unlike other deals in the pipeline, the free trade deal with Australia is expected to become one of the key cogs that will set the stage for the transformation of India as a key manufacturing hub.
As India dreams to replace China as the world’s factory, it requires an assured supply of raw materials and no other country can guarantee it better than Australia. It will also help Australia in finding a long-term partner in India as its relations get strained with China.
The free trade agreement, therefore, is a win-win deal between India and Australia. Canberra exports coal, alumina, metallic ores and critical minerals, which are crucial for the Indian industry. It is also a big producer of barley, oats, lentils, nuts, almonds, fruit and vegetables, which will help India in taming food inflation.
For India, the deal will help in increasing its exports of textiles, apparels, agriculture and fish products, leather, footwear, furniture and sports goods, jewellery, engineering goods, and selected pharmaceuticals and medical devices. It will also ease mobility of professionals between India and Australia, which will help skilled Indians. Canberra will allow young Indians to participate in working holidays in Australia and students to have an extended work visa.