The Economic Cooperation and Trade Agreement (ECTA) is a bilateral free trade agreement between India and Australia, signed on April 2, 2022, and which entered into force on December 29, 2022. It is an "early harvest" or interim agreement, designed to deliver rapid trade liberalisation while serving as a foundation for a more comprehensive pact, the Comprehensive Economic Cooperation Agreement (CECA). The ECTA was created to unlock the potential of the India-Australia economic partnership, which had lagged behind the rapidly strengthening geopolitical and security alignment between the two countries. Negotiations for a broader CECA had stalled since their launch in May 2011, and the ECTA was a breakthrough that solved the problem of years of stalled talks.
The ECTA works primarily by eliminating or reducing customs duties on a substantial portion of goods traded between the two nations. Australia immediately provided zero-duty access for 96% of India's exports by value, covering 98.3% of its tariff lines, with the remaining tariffs to be phased out over five years. This was the first trade agreement where a partner country offered 100% tariff elimination for India's exports. In return, India offered concessions on raw materials and intermediates, providing zero-duty access immediately on 40.3% of its tariff lines, with the remaining concessions phased in over periods up to 10 years. Key provisions cover areas like Trade in Goods, Trade in Services, Rules of Origin, and Movement of Natural Persons. For instance, it includes eased visa rules for Indian students and professionals entering Australia. India protected sensitive sectors like dairy, wheat, and rice by placing them in an exclusion list, meaning no concessions were offered on those products. The ECTA is directly connected to the ongoing negotiations for the CECA, which is intended to build upon the ECTA's outcomes and include deeper liberalisation in areas like services and investment. The ECTA itself has not been replaced or amended, but it is explicitly designed to be replaced by the more ambitious CECA in the future.