India and Australia Eager to Finalize CECA Framework

Posted by Written by Archana Rao Reading Time: 3 minutes

India and Australia are eager to move forward with the proposed full-fledged Comprehensive Economic Cooperation Agreement, or CECA. It has been reported that India’s Department of Commerce is collecting input from relevant industries on non-tariff barriers in the Australian market.

In May 2024, India’s Commerce Secretary Sunil Barthwal led a delegation to Canberra, Sydney, and Melbourne where discussions took place among Australian counterparts and representatives of the business community.

Following this, India issued a statement declaring its intention to leverage trade complementarities and untapped potential to bolster economic relations with Australia.

India-Australia ECTA and CECA talks: Progress update

Representatives of both India and Australia praised the seamless execution of the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) at the first Joint Committee Meeting (JCM). The ECTA is a limited trade agreement and a precursor to the advantages offered by a full fledged CECA.

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In addition, the JCM announced the creation of an institutional system for the regular monthly exchange of preferential import data—a first for free trade agreements—and accepted the committee’s rules of procedure.

Besides the ECTA results, both countries’ representatives reviewed the progress made on the ongoing India-Australia Comprehensive Economic Cooperation Agreement (CECA) negotiations and discussed steps to move forward and arrive at a fair conclusion.

The CECA agreement between the two countries is expected to include deeper market access and impact digital trade, goods, services, rules of origin and government procurement, and cooperation.

Australia and India first launched negotiations for a CECA in May 2011. There were nine negotiating rounds before both countries decided to suspend negotiations in 2016, pending the outcome of other plurilateral regional agreements.

In September 2021, Australia and India formally re-launched CECA negotiations with the intention of quickly concluding an ECTA to swiftly liberalize and deepen bilateral trade in goods and services, and to then use this foundation to resume negotiations on the more ambitious CECA.

Seeking Indian industry inputs on CECA

The Basic Chemicals, Cosmetics, and Dyes Export Promotion Council, or Chemexcil, released a circular on April 29, 2024, stating that the industry body was advised to gather industry feedback on non-tariff barriers concerning exports to Australia at a recent meeting with the Department of Commerce and Goods Track lead for the India-Australia CECA.

According to Chemexcil, the goal is to discuss and learn more about the Indian products that are subject to non-tariff barriers (NTBs) in Australia so that domestic companies can take advantage of the planned CECA. The industry collective claims to have 4000 members, comprising large-scale and small-scale manufacturers and merchant exporters. 

Positive trade outcomes for Australia from the ECTA

Since the establishment of the Australia-India ECTA in December 2022, agricultural exports to India have surged by 50 percent, particularly in sheep meat, seafood, broad beans, citrus, and almonds. Meanwhile, industrial exports to India have also seen a notable increase of 30 percent, especially in pharmaceuticals, wood, paper, and cochlear implants.

In February 2024, Dr. S. Janakiraman, the Consul General of India in Sydney, highlighted the importance of soliciting suggestions and recommendations to leverage current opportunities and address operational hurdles before reaching a CECA deal.

Janakiraman acknowledged the upward trend in Australian exports to India and stressed the need for Indian exports to catch up. He expressed hope that the proposed CECA would facilitate increased trade between India and Australia, urging all stakeholders to actively contribute to this effort.

Key discussions at the first Joint Committee Meeting

At the May 4th meeting of the first JCM, the two countries reportedly discussed a number of implementation-related topics, such as market access difficulties for certain items (such as lentils and okra), mutual recognition agreements (MRAs) on organic products, and regulatory obstacles relating to pharmaceutical price and product standards.

Additionally, discussions were held on subjects like the management of tariff rate quotas (TRQs), developments in working groups tackling issues in the wine and whiskey sector, and shared interests like seaside travel and essential minerals.

Aiming for a fair conclusion while building on the achievements of the ECTA, high-level negotiators also assessed the status of the CECA talks.

Summary

India and Australia are keen on expediting negotiations for the CECA, but India is wary of an imbalance in advantages enjoyed following the experience of the ECTA. India’s Department of Commerce is presently gathering industry input on NTBs in the Australian market, and both countries are looking forward to establishing an economic agreement that will support and expand trade relations.

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