Two-way trade between Australia and India was worth $27.5 billion last year. A large amount, but still miniscule when compared with the $251 billion traded between Australia and China. To correct this situation, this week when the Australian Parliament passed a new trade deal with India. It signals a green light for Australia to reduce its dependency on China.
The Australia-India Economic Co-operation and Trade Agreement was more than 10 years in the making, and its significance cannot be overstated. The IndAus ECTA will allow the nations to trade goods and services almost tariff-free.
Home to nearly 1.5 billion consumers, India is expected to become the world’s 2nd largest economy by 2050. Regardless of China, it is high time Australia had a stronger economic relationship with India, the second fastest growing economy in the world (behind Saudi Arabia).
It has projected growth rates of 6.6 per cent this year and 5.7 per cent next year. India recently overtook the United Kingdom to become the world’s 5th largest economy
However, the ratification of the deal through the Australian Parliament is far from a job finished. It is just the beginning. The hurdle of negotiating a Comprehensive Economic Co-operation Agreement remains for the trade negotiators.
Source: watoday.com.au
Photo source: Dreamstime.com