Negotiations on Indo–Australian FTA Soon

The Indian origin Australian high commissioner during his recent visit to India said the negotiations on the proposed FTA would begin after governments of both the countries examine the feasibility study report on the pact. Peter Varghese, the newly-appointed high commissioner was in India with a mission to assuage safety concerns of the Indian students in Australia who are increasingly becoming victims of racial attacks in recent past.

Press Trust of India has reported that a Joint Study Group which was set up to conduct feasibility study for the Indo–Australian FTA had prepared a report favouring such a pact. After the formal reading by both the governments, a decision will be taken for when to start the negotiations.

The feasibility study, which began two years ago, is understood to have covered several areas of potential impact including implications on economic growth, trade in goods and services and investment, as well as for other commercial linkages. Varghese expressed confidence in the commencement of trade talks that would entail tariff liberalisation and removal of other barriers.

In 2007, India was Australia’s sixth largest market for goods exports, seventh largest market for services and seventh largest market for goods and services combined. The bilateral trade in goods and services in 2007 amounted to $13.3bn making India Australia’s tenth largest trading partner.

At the moment, the Australian export to India is largely focussed on commodities such as coal, gold, and services like education. Varghese opined Australia would like to bring under the FTA both “goods and services”, and also would be keen on reducing the tariffs on its wine in India.

The high commissioner acknowledged that his country wished to actively contribute to the energy needs of India by providing coal and liquefied natural gas. He indicated the approval, given by his government to the $20bn pact between Australian oil and gas company ExxonMobil and India’s Petronet, was an example. ExxonMobil is expected to supply natural gas to Petronet from the Gorgan oil field for 15 years starting from 2014.

By Jose Roy