By Neena Bhandari, IANS
Sydney : Australia and India have agreed to undertake a joint feasibility study into the merits of a free trade agreement (FTA) between the two countries, Federal Minister for Trade Warren Truss announced Friday.
“The study will examine the potential gains for both countries, in particular the impact a comprehensive and genuinely liberalising FTA could have on promoting economic growth, trade in goods and services, investment and other commercial linkages,” Truss said here.
The study, which will commence in late 2007 and is expected to be completed in 2009, will provide an opportunity to consider the potential for benefits that might flow to Australia and India from an FTA.
“The relationship between Australia and India has been one of rapid growth in trade and investment. The FTA feasibility study is a natural extension of the Australian government’s efforts to look at ways to tap the potential of India’s rise as a major economic power,” the minister said.
India is now the fourth-largest merchandise export market for Australia, recording AU$10.1 billion worth of exports, equivalent to 6 percent of Australia’s total merchandise exports, according to 2006-07 preliminary figures.
India is also Australia’s fastest-growing major merchandise export market, increasing at more than 34 percent per annum over the past five years.
Truss said: “India is emerging as one of the key drivers for global economic growth and its economic rise will be increasingly critical to world economic development. India’s middle class will especially present important opportunities for Australian business. India also stands to benefit from Australia’s significant economic strength and competencies.”
During the feasibility study, the Australian government will extensively consult the state and territory governments, relevant industry bodies and other stakeholders to ensure that all views are taken into account in any future FTA negotiations with India.
Truss said Australian would initially hold bilateral meetings with India to discuss the study’s terms of reference.
Australia’s two-way trade in goods with India reached AU $11.4 billion in 2006-07, making India the country’s ninth-largest trading partner. Services trade with India in 2006 was AU$1.9 billion.
Australia has signed Free Trade Agreements with Singapore, Thailand, the US and New Zealand.
It is negotiating or considering FTAs with China, Chile, Malaysia, Japan, Gulf Cooperation Council and Australia-ASEAN-New Zealand. In December 2006, Australia and South Korea had agreed to conduct a joint study on a possible FTA.