As both India and Australia have strained relations with Beijing, the signing of the India-Australia free trade pact on April 2 is rooted in a desire to reduce their economic dependence on the world’s No. 2 economy, China.
India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) signed on April 2 offers obvious economic benefits. Annual bilateral trade is expected to almost double from USD 27.5 billion in 2021 to about USD 45 billion or USD 50 billion in the next five years. The deal eliminates tariffs on over 85 pc of Australian exports to India, rising to 91 pc in a decade while 96 pc of Indian goods entering Australia will become duty-free.
“India has faced border tensions. Australia has faced economic coercion… Those issues are not going to disappear overnight.” he added while laying out why the deal between India and Australia makes sense.
In addition to this, many analysts are of the view that there are strategic implications in the partnership. Both the members of the Quadrilateral Security Dialogue along with the U.S. and Japan, look to manage difficult relations with China and promote a “free, open and inclusive Indo-Pacific.”