FOREIGN TRADE, POLICY AND PROCEDURE

PROJECT
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SUBMISSION TO: Dr T Bangar Raju

TITLE: IMPORT AND EXPORT POTENTIAL FOR INDIA WITH

AUSTRALIA

India is one of the world’s fastest growing markets, with a growing middle class and
increasing demand for consumer and industrial products. Its growing economy and growing
population mean that India will have an increasing demand for agricultural products in the
future. A growing middle class and increasing demand for consumer and industrial products
are expected to increase the demand for agricultural products in India in the future.
In the last 10 years, India has been one of the world’s fastest growing markets, with a
growing middle class and increasing demand for consumer and industrial products. Its
growing economy and growing population mean that India will have an increasing demand
for agricultural products in the future.
India has the potential to become a major supplier of agricultural products to Australia. There
are a number of issues which will need to be resolved before this can become a reality. These
include a lack of infrastructure and the difficulties in overcoming language and cultural
barriers. However, with the right policies, initiatives and trade agreements, the potential for a
mutually beneficial future partnership between India and Australia is great.
India was Australia's first major trading partner with imports through the East India
Company, exports from Australia to India dates back to the late 18th century and early 19th
century, when coal from Sydney and horses from New South Wales were exported to India.
As of 2016, bilateral trade between the two countries totalled a $21.9 billion, having grown
from a $4.3 billion in 2003. Trade is highly skewed towards Australia. Australia mainly
exports coal, services (mainly education), vegetables for consumer consumption, gold, copper
ores and concentrates. In the year 2015-16 the total value of trade between Australia and
India was a $19.4 billion, a significant increase over the preceding decade.
India at present is believed to be one of the biggest importing nations of the world, as it ranks
to be in the eighth position of the world’s import and export market. It holds 2.8% shares, and
it’s predicted that it will reach at the fourth position by 2030. According to UN comtrade
international trade database, India exported USD3.74 billion in 2020 in Australia. On the
other hand, Australia exported 11.3 billion to India in 2020. This trade has been increasing
rapidly over the past 25years at an annual rate of 8.77% for Indian imports and 8.76% for
Indian exports. The major items of trade between the two countries are refined petroleum,
coal briquettes, aluminium oxides, packaged medicaments, gold, diamonds, etc.

The most recent figures of Indian exports to Australia (2021):

PRODUCTS VALUE (USD)

Mineral fuels, oils, distillation products 3.35B
Pearls, precious stones, metals, coins 365.06M
Pharmaceutical products 343.09M
Machinery, nuclear reactors, boilers 239.09M
Articles of iron or steel 219.17M
Electrical, electronic equipment 192.55M
Textile 174.70M
Vehicles 161.57M
Chemical products 148.53M
Iron and steel 97.70M

The most recent figures of Indian imports from Australia (2021):

PRODUCTS VALUE (USD)

Mineral fuels, oils, distillation products 11.41B
Pearls, precious stones, metals, coins 1.14B
Ores slag and ash 799.69M
Inorganic chemicals, precious metal compounds, 431.46M
isotopes
 Edible vegetables and certain roots and tubers 120.66M
Aluminium 118.26M
Tanning, dyeing extracts, tannins, derivatives, 112.39M
pigments
Wood 111.49M
Iron and steel 95.84M

COMMODITIES TRADED BY INDIA WITH AUSTRALIA:

India and Australia on Saturday marked a financial participation and economic accord under
which Canberra would give obligation free access in its market for north of 6,000 expansive
areas of India, including materials, cowhide, furniture, gems and hardware.

The arrangement is probably going to be executed in around four months.

The India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) was inked
by Commerce and Industry Minister Piyush Goyal and Australian Minister for Trade,
Tourism and Investment Dan Tehan in a virtual service, within the sight of Prime Minister
Narendra Modi and his Australian partner Scott Morrison.

Goyal said the understanding would help in taking respective exchange from USD 27.5
billion at present to USD 45-50 billion in the following five years.

He further said the agreement will contribute towards huge work age, which is assessed at
around 10 lakh throughout the following 5-7 years as the work serious areas are probably
going to acquire the most.

Under the settlement, Australia is offering zero obligation admittance to India for around 96.4
percent of commodities (by esteem) from the very beginning.

Additionally READ: India-Australia exchange settlement to work with trade of understudies,

experts, sightseers, says PM Narendra Modi

This covers numerous items which right now draw in 4-5 percent customs obligation in
Australia.
Work escalated areas which would acquire massively incorporate materials and clothing, few
horticultural and fish items, cowhide, footwear, furniture, sports merchandise, gems,
hardware, electrical products and rail line carts.

On the absolute first day of the execution of the agreement, more than 6,000 tax lines would
be accessible for Indian exporters at zero obligation.

Australia exchanges around 6,500 levy lines, while India has north of 11,500 duty lines.

Since Australian commodities are more packed in unrefined components and intermediates,
numerous ventures in India will get less expensive natural substances which will make them
serious, specifically areas like steel, aluminium and texture/articles of clothing.

To defend delicate areas, India has a few merchandise in the avoidance class in which no
obligation concessions will be concurred to Australian imports.

Such merchandise will incorporate milk and other dairy items, toys, sunflowers, seed oil,
pecans, pistachio nuts, platinum, wheat, rice, bajra, apple, sugar, oil cake, gold, silver,
chickpeas, adornments, iron mineral and most clinical gadgets

HISTORIC TRADING RELATIONSHIP BETWEEN INDIA AND

AUSTRALIA:

This is detailed study between the time period of 2001 and 2012, this is known to be the
period accounting for the maximum rise of total trade (import + export) between the two
countries. It is known as the nine-fold rise. In 2001 the total trade was found to be USD1.7B
which rose up to USD15.3B in the year 2012. The trade surplus recorded in Australia in 2001
was USD834M which exponentially rose up to USD2.67B in 2012.

Australia’s major exports to India in this period is dominated by three items, i.e. mineral fuels
and products (46.9%), pearls and precious stones (24.8%) and, ores and slag (13.5%). All
these products together hold 85% of total Australian export shares. The table below shows
the sales over time all in M USD.

PRODUCTS 200 200 201 201 201 %SHAR

1 5 0 1 2 E
MINERAL FEULS 505 1700 6953 8094 5921 46.9%
 PRECIOUS STONES 115 2297 4778 4191 3125 24.8%
ORES, SLAG 146 418 1397 1619 1709 13.5%

Australia’s major imports to India in this period is dominated by three items, i.e. pearls and
precious stones (12.5%), iron and steel (8.7%) and, vehicles (8.6%). All these products
together hold 85% of total Australian export shares. The table below shows the sales over
time all in M USD.

PRODUCTS 200 200 201 201 201 %SHAR

1 5 0 1 2 E
PRECIOUS STONES 33 111 251 287 334 12.5%
IRON AND STEEL 18 60 56 72 233 8.7%
VEHICLES 6 18 113 147 230 8.6%

INDIA-AUSTRALIA ECONOMIC COOPERATION AND TRADE

AGREEMENT:

The India-Australia economic cooperation and trade agreement (ECTA) is the first agreement
of India with a developed country after more than a decade. It covers almost all the tariff lines
dealt in by both the countries. The negotiations stated in the agreement were formally
launched in 30th September 2021 and will be continued to stay by the end of March 2022.

The salient features of this agreement are as follows:

1. The agreement covers cooperative areas between the two countries like Trade in
Goods, Rules of Origin, Trade in Service, Technical Barriers to Trade (TBT),
Sanitary and Phytosanitary measures (SPS), Dispute Settlement, Movement of
Natural Persons, Telecom, Customs Procedures, Pharmaceutical products, and
Cooperation in other areas.
2. ECTA provides for an institutional mechanism to encourage and improve trade
between two countries. India will benefit from preferential market access provided by
Australia on 100% of its tariff lines. This includes all the labour intensive sectors of
export interest to India such as Gems and Jewellery, Textiles, leather, footwear,
furniture, food, agricultural products, engineering products, medical devices, and
automobiles. On the other hand, India will be offering potential access to Australia on
 over 70% of its tariff lines, including lines of export interest to Australia which are
primarily raw materials and intermediaries such as coal, mineral ores and wines, etc.
3. As regards trades in services, Australia has offered wide ranging commitments in
around 135 subsectors and most favoured nations (MFN) in 120 sub sectors which
cover key areas of India’s interest like IT, ITES, Business services, Health, Education,
and Audio visual. Some of the key offers from Australia in the services space include:
Quota for chefs and yoga teachers; Post study work visa of 2-4 years for Indian
students on reciprocal basis; mutual recognition of Professional Services and Other
licensed/regulated Occupations; and Work & Holiday visa arrangement for young
professionals. On the other hand, India has offered market access to Australia in
around 103 sub-sectors and Most Favoured Nation in 31 sub-sectors from the 11
broad service sectors such as ‘business services’, ‘communication services’,
‘construction and related engineering services’, and so on. Both sides have also
agreed to a separate Annex on Pharmaceutical products under this agreement, which
will enable fast track approval for patented, generic and biosimilar medicines.

THE POTENTIAL FOR FUTURE GROWTH AND ANY FAVORABLE

POLICY WHICH COULD STIMULATE THE GROWTH OF FOREIGN
TRADE WITH THE COUNTRY:

Despite the fact that globalization and exchange present new open doors, it isn't without
challenges. Agricultural nations might battle to contend on a worldwide scale for some
reasons.

1. Wasteful or lacking frameworks of transportation, operations, or customs;

2. Unfortunate availability in broadcast communications, monetary business sectors or
data innovation;
3. Muddled administrative conditions that beat new speculations down;
4. Anticompetitive way of behaving by significant market players or cartels that smother
development, efficiency, or market development.
5. The rising intricacy of exchange has genuine ramifications for the world's poor, who
frequently are excessively disengaged from worldwide, territorial - or even nearby -
markets. Neediness is many times packed in geographic regions that are inadequately
associated with dynamic financial focuses. Firms and networks here botch chances to
 foster gifted, cutthroat labour forces; they are not incorporated in worldwide creation
chains and are less ready to enhance their items and abilities.

There are additionally distributional results of expanding exchange. While on total,

economies gain gigantically from expanding exchange, as rivalry increments and many
steady employments are made in send out areas the wages of labourers in import-contending
ventures might endure or a few specialists might lose their positions.

BIBLIOGRAPHY:

https://tradingeconomics.com/india/exports/australia

https://www.eximbankindia.in/Assets/Dynamic/PDF/Publication-Resources/
ResearchPapers/44file.pdf

https://oec.world/en/profile/bilateral-country/ind/partner/aus#:~:text=B%20in%202020.-,In
%202020%2C%20Australia%20exported%20%2411.3B%20to%20India.,to%20%2411.3B
%20in%202020.

https://www.newindianexpress.com/business/2022/apr/02/india-australia-trade-pact-
thousands-of-indian-goods-to-get-duty-free-access-2437168.html

https://www.livemint.com/news/india/indiaaustralia-economic-cooperation-and-trade-
agreement-ecta-5-updates-11648887887403.html