The proposed India-Australia Comprehensive Economic Cooperation Agreement (CECA), which has completed two years of building on the bilateral early harvest free trade pact, is unlikely to be concluded any time soon.

“With Australia now gearing up for its federal elections scheduled around May 2025, it is not in a position to take major decisions that may be required in crucial areas to seal the deal,” a source close to the development told businessline.

The early harvest pact, officially called the India-Australia Economic Cooperation and Trade Agreement (ECTA), completed two years of implementation on Sunday and both sides are hopeful that it would help push bilateral trade to AUD 100 bn (US $62 billion) by 2030.

Tariffs on items

“The stock-taking meeting between the two sides earlier this month on the CECA revealed that differences remained in many crucial areas including market access, government procurement, rules of origin, digital trade and services. It may not be possible for the Australian government now to take the talks towards completion before the elections scheduled around May 2025,” a source said.

India and Australia implemented the bilateral ECTA on December 29 2022, under which Australia agreed to eliminate tariffs on 96 per cent of goods imported from India, increasing it to 100 per cent by January 1, 2026. India agreed to eliminate tariffs on over 85 per cent of Australian goods, which would rise to 90 per cent by January 1, 2026.

The India-Australia CECA, being negotiated with ten rounds having been completed, is set to cover more products as well as new areas such as services, digital trade, government procurement and Rules of Origin (ROO)-Product Specific Rules Schedule.

“While Australia has more or less accepted India’s vulnerabilities in the dairy sector, it has several demands in agriculture such as tariff reduction or elimination of items such as apples, chickpeas and pistachios. India wants greater market access for products such as textiles, chemicals, agriculture, electronics, and engineering and more work visas,” the source said.

Indian exports up

The India-Australia ECTA has significantly advanced trade ties, creating new opportunities for MSMEs, businesses and employment in both nations while reinforcing the foundation of their economic partnership, according to an official release issued by the Commerce Department on Sunday.

“Since its signing, bilateral merchandise trade has more than doubled, surging from $12.2 billion in 2020-21 to $26 billion in 2022-23. Total trade, however, moderated in the year 2023-24 to $24 billion in 2023-24, with India’s exports to Australia growing by 14 per cent,” the release highlighted.

The current fiscal year continues to reflect strong momentum with total goods trade from April-November 2024 reaching $16.3 billion, it added.

“Exchange of preferential import data has commenced between both countries, highlighting the effective implementation of the agreement in 2023. The data reveals export utilisation at 79 per cent and import utilisation at 84 per cent,” the release pointed out.