India, Australia ECTA comes into force

India - Australia Economic Cooperation and Trade Agreement, ECTA, comes into forceb from Thursday.The two nations signed the Agreement on the 2nd of April this year. ECTA is the first trade agreement of India with a developed country after more than a decade. The Agreement encompasses cooperation across the gamut of bilateral economic and commercial relations between the two friendly countries. Under this trade agreement, Indian exports will benefit from preferential zero-duty market access in Australia for 100 per cent of its tariff lines. It will help India’s labor-intensive sectors. As a result of this agreement, ten lakh jobs are estimated to be created in the country. The total bilateral trade is expected to cross 45 to 50 billion dollars in five years from the existing 31 billion US dollars.

ECTA helps secure access to the fast-growing Indian market of over 1.4 billion people and gives Australian businesses opportunities for trade diversification. Over 85 per cent of Australian goods exports by value to India are now tariff free, rising to 90 per cent in six years, and high tariffs have been reduced on some additional products. In addition, 96 per cent of imports from India are now tariff free, rising to 100 per cent in four years. The Agreement will also eliminate Double taxation on IT services which were making us less competitive and making us less profitable in IT sector, the double taxation has now been removed by amending the law, from 1st April, double taxation for IT sector will be over, we will save millions and millions of dollars right now, and over a billion dollars going forward, maybe 5 – 7 years going forward, giving us competitive edge and also creating a lot many jobs.