Daily Current Affairs : 30-December-2024

The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) marks an important achievement in bilateral trade relations. Signed in 2022, this agreement has played a crucial role in enhancing trade between the two nations. It is an important step towards mutual economic growth, with both countries benefiting from its provisions over the past two years.

Key Features of the Agreement

The Ind-Aus ECTA brings several advantages to both India and Australia. Some of the key features of the agreement include:

  • Trade Preferences: It offers preferential market access for various goods, including textiles, chemicals, and agricultural products. This allows easier and more affordable trade between the two countries.
  • Diversification of Trade: The agreement encourages trade in new sectors, such as gold-studded diamonds and turbojets, broadening the range of products exchanged between the nations.
  • Raw Material Imports: It facilitates the import of essential raw materials like metalliferous ores, cotton, and wood products, which are vital for India’s industrial growth.
  • Focus on MSMEs: The agreement places special emphasis on empowering Micro, Small, and Medium Enterprises (MSMEs) in both countries. This aims to foster innovation and generate employment.
  • Bilateral Trade Target: The agreement sets a target of achieving USD 100 billion in bilateral trade by 2030, indicating the long-term potential for growth.
Progress and Recent Trends

Over the past two years, there has been notable growth in trade between India and Australia.

  • Trade Growth: Bilateral merchandise trade has increased from USD 12.2 billion in 2020-21 to USD 26 billion in 2022-23. This growth reflects the positive impact of the ECTA.
  • Utilization Rates: As of 2023, the export utilization rate has reached 79%, while the import utilization rate stands at 84%, showing that both countries are making good use of the trade preferences provided.
  • Moderation in Trade: In 2023-24, total trade reached USD 24 billion, with India’s exports growing by 14%. This slight moderation highlights the continued steady progress despite global economic challenges.
Important Points:
  • Ind-Aus ECTA Signed: The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) was signed in 2022.
  • Key Goods Covered: The agreement provides preferential market access for textiles, chemicals, and agricultural products.
  • Diversification: Promotes trade in new sectors such as gold-studded diamonds and turbojets.
  • Raw Materials: Facilitates imports of metalliferous ores, cotton, and wood products to support India’s industries.
  • MSME Focus: The agreement aims to empower Micro, Small, and Medium Enterprises (MSMEs) and generate employment.
  • Trade Target: A target of reaching USD 100 billion in bilateral trade by 2030.
  • Trade Growth: Bilateral merchandise trade grew from USD 12.2 billion in 2020-21 to USD 26 billion in 2022-23.
  • Utilization Rates: Export utilization at 79% and import utilization at 84% in 2023.
  • Recent Trends: Total trade reached USD 24 billion in 2023-24, with India’s exports growing by 14%.
Why In News

The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) has completed two years, marking a significant milestone in bilateral trade relations and fostering mutual growth. This agreement has not only enhanced economic collaboration but also paved the way for deeper partnerships in sectors such as manufacturing, technology, and services.

MCQs about India-Australia Trade Boost:Two Years of ECTA Success
  1. When was the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) signed?
    A. 2020
    B. 2021
    C. 2022
    D. 2023
    Correct Answer: C. 2022
    Explanation: The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) was signed in 2022, marking the beginning of deeper economic ties between the two countries.
  2. Which of the following sectors is not specifically promoted under the Ind-Aus ECTA?
    A. Textiles
    B. Chemicals
    C. Gold-studded diamonds
    D. Space exploration
    Correct Answer: D. Space exploration
    Explanation: The agreement promotes trade in sectors like textiles, chemicals, gold-studded diamonds, and turbojets, but it does not specifically focus on space exploration.
  3. Which of the following raw materials is mentioned as being facilitated for import under the Ind-Aus ECTA?
    A. Lithium
    B. Cotton
    C. Coal
    D. Natural gas
    Correct Answer: B. Cotton
    Explanation: The agreement facilitates the import of essential raw materials such as metalliferous ores, cotton, and wood products, which are crucial for India’s industrial growth.

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