The Economic Cooperation and Trade Agreement (ECTA) with Australia is expected to benefit India’s apparel industry.

This deal is likely to benefit various labor-intensive sectors which are subjected to five per cent import duty by Australia currently. This deal will provide immediate market access at zero duty for 98.3 per cent of tariff lines which account for 96.4 per cent of India’s exports in value terms to Australia and the remaining 1.7 per cent lines over five years.

Overall, Australia is offering duty elimination on 100 per cent of its tariff lines which will ensure duty free access covering all labor-intensive sectors such as textiles and apparel. With the elimination of duty, India’s exports of textiles and apparels are expected to rise in the next three years. Additional capacity creation due to exports and re-investment is likely to create additional employment of 40,000 persons per annum.

This ECTA has a higher value addition of 35 per cent for specifying country of origin, which has been deliberately kept to avoid the leakages from other countries. India has a less than five per cent share in Australia’s imports. With the ECTA, India will have an advantage over Vietnam and Indonesia in the Australian market.