UPSC Daily Editorial Analysis | 7 April 2022

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What the article is about?

  • Talks about the potential of increased interaction between India and Australia in the light of recent IndAus ECTA.

Syllabus: GS-II International relations, Regional grouping and bilateral relations

IndAus ECTA:

  • The India-Australia Economic Co-operation and Trade Agreement (IndAus ECTA) eliminates tariffs on more than 85% of Australian goods exports to India (valued at more than $12.6 billion a year).
    • With a GDP expected to grow at 9% in 2021-22, India is the world’s fastest-growing major economy.
    • Over the five years leading up to the pandemic, two-way trade and investment between Australia and India doubled.
  • IndAus ECTA is expected to increase bilateral trade from AUD$36.7 billion to AUD$60 billion.
  • Through IndAus ECTA, tariffs on a range of Australian exports to India, including coal, lentils, sheep meat, wool, lobsters and rare earth, will be eliminated.
    • The deal also includes a phased reduction of tariffs on wine and agricultural products including avocados, cherries, nuts and blueberries.
  • The deal also extends to enhancing services exports and strengthening our people-to-people links, including a quota for chefs and yoga teachers, a post-study work visa of 2-4 years for Indian students on a reciprocal basis, mutual recognition of professional services and other licensed/regulated occupations, and work and holiday visa arrangements for young professionals.
  • The role of the Indian diaspora as a key national economic asset should not be underestimated in this deal.
  • Data from the India Economic Strategy Update confirm that nearly one in five overseas students in Australia are from India, making full fee-paying Indian students the largest group of overseas students. 


  • Yet the Russian invasion of Ukraine remains a ‘balancing act’ for India.
    • Half of its arms imports come from Russia and some 70% of its military hardware is Russian-made.
    • The need for India’s military diversification is now greater than ever.
    • Australia is limited in its delivery on this front.
  • In the past, Canberra’s fierce response to India’s 1988 nuclear tests and the Indian media’s over-the-top reaction to attacks on Indian students in Melbourne in 2009-2010 had almost derailed ties. 


  • With the turbulence faced by both nations in the Indo-Pacific region, the convergence of economic and geopolitical risks is real.
  • ECTA is a clear response to those changing dynamics that both countries face.
  • And the fact that India today counts on the support of Australia through the Quad and maritime security and now through a trade agreement shows the diversification of its strategic and economic approach. 

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