India–Australia Trade: Towards a Comprehensive Economic Partnership

India and Australia are ushering in a new phase of their economic partnership, moving beyond the foundations of the Economic Cooperation and Trade Agreement (ECTA) signed in December 2022. The two nations are now negotiating an even more ambitious deal — the Comprehensive Economic Cooperation Agreement (CECA) — aimed at broadening their trade engagement and deepening investment opportunities. This renewed focus represents not just economic intent but a strategic effort to strengthen ties in the Indo-Pacific region.

Goyal on Saturday concluded his two-nation visit after meeting Australian trade minister Don Farrell and skill minister Andrew Giles in Melbourne. (PTI) | Hindustan Times

The Foundation: ECTA’s Success Story

Since its implementation, the ECTA has reshaped trade between the two democracies. The agreement has led to significant tariff reductions and opened access to a wide range of products. Currently, 96 percent of Indian exports to Australia are duty-free and will reach complete exemption by 2026. Similarly, 85 percent of Australian exports to India already enjoy tariff-free access, set to rise to 90 percent in the coming years.

In 2024–25, the two-way trade in goods touched $24.1 billion, marking a steady growth trajectory — Indian exports rose by 14 percent in 2023–24 and another 8 percent in 2024–25. These numbers reflect how ECTA has turned potential into performance, paving the way for a stronger, more balanced trade framework.

Unlocking Sectoral Opportunities

The trade pact has yielded tangible benefits across diverse sectors. India’s exports of textiles, pharmaceuticals, chemicals, and agricultural goods have grown, while new product lines such as calcined petroleum coke, high-capacity diesel generators, and air-liquefaction machinery have found markets in Australia.

On the other hand, Australia’s supply of metalliferous ores, cotton, and wood products continues to support India’s industrial base. This complementary exchange highlights how both economies are leveraging their natural strengths — India’s manufacturing and services capacity, and Australia’s resource-rich exports — to build a sustainable partnership.

Towards a Comprehensive Economic Cooperation Agreement (CECA)

The proposed CECA aims to expand on ECTA’s success by incorporating new-age sectors such as digital economy, renewable energy, services, and supply chain integration. It seeks to build a forward-looking partnership that aligns with India’s Vision 2047 — transforming into a developed, self-reliant economy — and Australia’s drive to diversify its trade beyond traditional markets.

Both governments have expressed their determination to conclude CECA soon, envisioning it as a framework that balances commercial ambition with national interests. The agreement will also facilitate collaborations in education, skill development, tourism, and clean energy, areas that will shape the next generation of Indo-Australian engagement.

Strategic Significance in the Indo-Pacific

Beyond economics, the growing synergy between India and Australia carries strategic weight. As both nations strengthen their positions in the Indo-Pacific, this trade partnership serves as a pillar of regional stability and cooperation. It reflects a shared vision of open trade, mutual growth, and economic security amid shifting global dynamics. For India, it’s another step towards integrating into global value chains, while for Australia, it represents an opportunity to engage with one of the world’s fastest-growing economies.

The MGMM Outlook

India and Australia are entering a transformative phase in their economic relations, building upon the success of the 2022 Economic Cooperation and Trade Agreement (ECTA). With trade between the two nations crossing $24.1 billion in 2024–25, both economies are witnessing a mutually beneficial growth trajectory. The ECTA has already eliminated duties on most Indian exports to Australia, boosting sectors like textiles, pharmaceuticals, and engineering goods, while India’s demand continues to strengthen Australia’s resource-based exports. This exchange reflects the maturity of two democracies working together to balance trade and diversify global partnerships.

The forthcoming Comprehensive Economic Cooperation Agreement (CECA) takes this vision a step further, promising to open new frontiers in the digital economy, renewable energy, and education. It aligns perfectly with India’s Vision 2047 and Australia’s goal to expand beyond its traditional markets, creating a partnership rooted in shared strategic and developmental goals. For India, the deal represents not just enhanced trade but also an assertion of its growing role in the Indo-Pacific — a region where economic cooperation increasingly defines geopolitical strength. As CECA progresses, it stands as a symbol of trust, growth, and the evolving power balance that positions India and Australia as key allies in shaping a resilient and inclusive global economy.

(Sources: Hindustan Times, PIB India)