Future of India-Australia Relations

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Future of India Australia Trade

Submitted To: Submitted By: Group-6 Prof. Anuj Sharma Harinder Pal Singh(12IB222) Nikhil Gupta(12IB240) Pooja Jain(12IB243) Tarang Agarwal(12IB259) Rahul Bhatnagar(12IB249) Ayush Sharma(12IB214)
Introduction

The economic relationship between Australia and India has developed rapidly in recent years, particularly under the impetus of India’s far-reaching process of economic reform and the resulting rapid globalisation of the Indian economy. In recognition of the growing synergies between the two economies, and the commitment on both sides to further enhance the economic partnership, Australia and India agreed in August 2007 to undertake a feasibility study for a possible bilateral FTA. This would help inform a subsequent decision by the two Governments about whether to proceed to FTA negotiations. In doing so, the study is without prejudice to whether possible future FTA negotiations between Australia and India would take up all issues in the forms considered in the study.

Terms of reference (TOR) for the study were developed and are set out in Annex A. Key elements of the TOR are:
i. to identify the strategic and economic benefits that India and Australia can derive from the establishment of an FTA;

ii. to develop a comprehensive policy framework for enhancing the bilateral economic relationship, including by assessing the feasibility of achieving desired outcomes through a comprehensive FTA covering trade in goods, services, and investment; as well as other issues such as the protection of intellectual property rights (covering all issues including TRIPS & CBD, and GIs inclusive of non-food GIs), SPS & TBT matters, competition policy and government procurement;

iii. to review the existing institutional framework, infrastructure and mechanisms in bilateral trade, investment and economic relations to enhance closer cooperation and recommend measures to facilitate and optimise such cooperation;

iv. to expedite the expansion of trade in goods through liberalisation of tariffs, consistent with WTO principles, and removal of other impediments to trade;

v. to expedite the expansion of trade in services, by liberalising trade in services, consistent with WTO principles, with substantial sectoral coverage including visas related to Mode-4, and MRA issues;

vi. to evolve an appropriate framework and modalities for investment cooperation with a view to creating a favourable climate for encouraging cross border investment flows;

vii. the JSG will be required to produce a Joint Report, with recommendations, for consideration by the Governments of India and Australia in the first half of 2009 or

Executive Summary

Recent years have seen remarkable growth in the trading relationship between India and Australia, fuelled by the many complementarities between the two economies. Over the past five years, bilateral trade in goods and services has increased by 24 per cent annually to US$16 billion in 2008–09. Two-way investment is also significant, estimated at over US$1.5 billion including portfolio investment in 2008 . Bilateral trade between India and Australia in 2010-11 contracted to 9.3% to $12.5 billion dollars. India exported goods worth $1.7 billion to Australia and imported goods worth $10.8 billion during the year.

Against this backdrop, Australia and India agreed in April 2008 to undertake a feasibility study for a possible bilateral free trade agreement...
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