In a landmark moment, India's Union Minister for Trade and Commerce, Piyush Goyal made the announcement that the Australian Parliament, on November 22, approved the Free Trade Agreement (FTA) that was essentially inked with India in April.
Notably, the move will help double the two-way trade to $40-50 billion in the coming five years.
How Does It Provide Benefits to India?
Duty-Free Access to Indian Exporters
The pact is expected to come into force from January 2013, and further the free-trade agreement will provide duty-free access to Indian exporters in about 6000 broad sectors such as textiles, leather, furniture, jewellery and machinery in the Australian market.
'Comes as a Massive Boost to the Trade'
From $31 billion, the India-Australia trade will increase to USD 45-50 billion in the next five-six years, said Commerce and Industry Minister Piyush Goyal
Australia will open 100 per cent of their lines (products) with no restriction on even quota. This is the first time Australia has done for any country...We see job opportunities when Australian investment comes here.Piyush Goyal said.
No Custom Duty On Indian Exports
Under the pact, Australia will offer zero-duty access to 96.4 per cent of Indian exports. Many of these products currently cost 4-5 per cent customs duty in Australia.
Larger Benefits to IT Sector
It is pertinent to note that with Australia, India's good export stand at 8.3 billion and imports at USD 16.75 billion in 2021-22. The Australian Parliament has also approved an amendment to the the Double Taxation Avoidance Agreement (DTAA), which will be of immense benefit to the Indian IT sector.
No Taxation on Offshore Income of Indian Firms
Reiterating on what more the FTA is holding on it for India, Piyush Goyal said that the move will stop the taxation on the offshore income of Indian firms that are engaged in providing technical support in Australia.
Goyal further added that the Indian IT sector will be the "biggest gainer" of this amendment. "If the tax will go, they can see a quantum jump in their business with Australia."
Visas to be Easily Accessible
The minister further asserted that for the "first time", India has got visas for Indian chefs and yoga instructors and also got a commitment that every child going to study in Australia will get an opportunity to work there depending on the level of education. "This is the first agreement with a developed country after a decade," he added.