India, Australia to study FTA options

NEW DELHI: India and Australia have agreed to undertake a joint feasibility study into the benefits of a free trade agreement (FTA) between the countries.

The study is expected to provide a timely opportunity to examine the potential for benefits, which might flow from a bilateral FTA.

The joint study will examine the potential benefits of FTA for both countries. In particular, the study will focus on the impact an FTA could have on promoting economic growth in both countries, bilateral trade in goods and services, as well as investment and other commercial linkages, said a commerce ministry release issued here on Friday.
The governments will initially hold bilateral meetings to discuss the terms of reference for the FTA feasibility study, which will commence in late 2007 and is expected to be completed in 2009.

Early this month, the Australian Cabinet endorsed a plan to negotiate the FTA with New Delhi. The FTA is likely to provide enormous opportunities for Australian companies in the services sector, apart from the obvious synergy in energy trade, the familiar common-law system, and India’s success in IT sector.

The Australian Cabinet submission, which recognises India’s growing importance to Australia, contains a series of specific proposals to enhance relations.

Apart from allowing the export of uranium, which was approved earlier by Prime Minister John Howard, these include formal and active diplomatic support for India’s bid to become a permanent member of the UN Security Council.

Much of the submission is devoted to the sale of energy to India. It also envisages elevating the joint working group on minerals and energy to ministerial level, as a key tool in managing the energy relationship.

Besides, it contains a wide range of proposals for enhanced security cooperation, including joint naval exercises, intensified cooperation in counter-terrorism, peacekeeping, all aspects of maritime security and greater engagement on border and transport security.

Trade and investment links between Australia and India have grown rapidly in recent years. Two-way trade in goods and services between the two countries reached $7.76 billion in 2006-07.