India-Australia Bilateral Talks Advance, Emphasizing MSMEs And Global Integration

In the wake of the successful conclusion of a preliminary Free Trade Agreement (FTA) last year, India and Australia are currently engaged in talks aimed at advancing their bilateral relations, with a specific focus on micro, small, and medium enterprises (MSMEs). The seventh round of talks concluded on October 20, with both nations resolving to advance negotiations across five tracks and 14 new areas. These encompass digital trade, micro, small, and medium enterprises (MSMEs), traditional knowledge, labor, and sports.

The negotiations aim to capitalize on the positive momentum generated by the preliminary FTA, focusing on a broad spectrum of cooperative endeavors. Sectors under discussion include digital trade, government procurement, MSMEs, traditional knowledge, sports, gender, environment, innovations, space, labor, and competition policy. Officials involved in these talks stress the significance of pinpointing common interests to propel the negotiations forward.

While formal discussions on tracks such as remaining goods, services, digital trade, government procurement, and product-specific rules of origin (ROO-PSRs) have progressed swiftly, efforts are underway to achieve convergence on areas of mutual interest.

Free Trade Agreement To Elevate Economic Ties

India and Australia had previously operationalized the Economic Cooperation and Trade Agreement (ECTA) in December last year. Following this, both nations expressed a commitment to pursue a more comprehensive agreement, known as the Comprehensive Economic Cooperation Agreement (CECA). Talks on expanding the scope of ECTA have been ongoing since February, with the objective of concluding CECA by the end of the current year.

The impact of the FTA between India and Australia is discernible, with Australia emerging as India's 10th top export destination in April-October 2023, recording exports of USD 5.48 billion and a year-on-year growth of approximately 16 per cent. The comprehensive FTA is anticipated to elevate economic ties to a strategic level, potentially allowing Australia to provide assured supplies of critical minerals like lithium and cobalt to India without disruptions. Nevertheless, challenges persist, including Australia's aspiration for greater market access in India for its wines and agricultural products.

Exports See Rise

As per official data from the Commerce Ministry, India's exports to Australia registered a substantial 17 per cent upswing to USD 4.9 billion in the first half of 2023-24 (April-September), while imports saw a decline of 24.6 per cent to USD 8.3 billion. Key Indian exports to Australia involve petroleum products, pharmaceuticals, iron and steel products, electrical machinery, and garments. Imports from Australia predominantly include coal, gold, iron ore, pulses, and minerals, serving as essential raw materials for domestic industries.

Earlier this month, Commerce Secretary Sunil Barthwal highlighted India's proactive approach to facilitating the participation of domestic Micro, Small, and Medium Enterprises (MSMEs) in the public procurement processes of various nations. Emphasizing the pivotal role of free trade agreements (FTAs) in achieving this goal, the secretary underscored the importance of integrating MSMEs into global supply chains for the advancement of global trade.

Secretary Barthwal articulated the significance of global supply chains, pointing out that a substantial 70 percent of global trade occurs within these intricate networks. He also emphasized the abundance of opportunities available for MSMEs to contribute and thrive in the international marketplace.

Conclusion

The talks with Australia reflect India's strategic intent to leverage FTAs as a means to enhance the global reach of its MSME sector, acknowledging the vital role these enterprises play in the larger context of international trade. The focus on integrating MSMEs into global supply chains aligns with the broader vision of fostering robust economic linkages and enhancing the competitiveness of Indian businesses on the global stage.