Australia says it’s close to signing the first free-trade agreement with India since Mr Narendra Modi came to power almost two years ago.
The deal could be completed in six to eight weeks if both sides sit down and go through the issues, according to Australia’s special trade envoy Andrew Robb. He sees it as a bigger boon for Australia than a similar agreement signed last year with China.
“India is on its way,” Mr Robb said in an April 8 interview in Singapore after his sixth trip to India since he took on the trade portfolio in 2013. “In the decades ahead India will be as important to Australia in trade terms as China is today.”
For Mr Modi, the deal would signal a renewed effort to reduce trade barriers with major commercial partners as he seeks to lure manufacturers to produce in India, which recently eclipsed a slowing China as the world’s fastest-growing economy. Since taking office, Mr Modi has attracted more than US$400 billion (S$537.6 million) of investment pledges as part of his “Make in India” campaign.
“Now the thinking in the government is clear that apprehension on FTAs is not sustainable, and bilateral engagement is the way forward,” said Mr Ram Upendra Das, a trade economist at New Delhi-based Research and Information System for Developing Countries
Two-way commerce between India and Australia has lagged in recent years. It fell to US$13.1 billion in 2014, the lowest level since 2009, according to data compiled by Bloomberg. That’s more than 10 times less than trade between Australia and China, Australia’s largest trading partner.
Yet crossing the finish line on a deal may prove difficult, particularly for an administration that hasn’t focused on bilateral agreements. Until now, Mr Modi has prioritised talks at the World Trade Organisation and a China-led regional grouping.
Source: Bloomberg
