India and Australian Prime Ministers To Meet and Build Bilateral Relations Through Trade and Investment

By: Asia Business Outlook Team | Wednesday, 08 March 2023

Australia's Prime Minister Anthony Albanese arrives in India on Wednesday, hoping to build on the new momentum in bilateral relations through expanded trade, investment, and defence cooperation.

Albanese's three-day visit, the first by an Australian prime minister since 2017, comes just days before a visit by Japanese Prime Minister Fumio Kishida, another member of the so-called Quad grouping seeking to counter China's growing dominance in the Indo-Pacific region.

Along with Australia and Japan, the Quad includes the United States and India. Later this year, Australia will host a Quad Leaders Summit in Sydney.

“India and Australia share warm and friendly relations based on common values and democratic principles. The Strategic Partnership between the two countries was elevated to a Comprehensive Strategic Partnership in June 2020,” the Indian foreign ministry said in a statement ahead of the visit.

“Prime Minister Albanese’s visit is expected to provide further momentum to the Comprehensive Strategic Partnership.”

Speaking in Sydney on Tuesday, Albanese said Australia wanted "greater diversity in who we trade with - and greater variety in what we trade, meaning our economy is more resilient and more secure".

The two countries signed the Economic Cooperation and Trade Agreement (ECTA) last year, the first free trade agreement signed by India with a developed country in a decade.

It has resulted in an immediate duty reduction to zero on 96% of Indian exports to Australia in value, and a duty reduction to zero on 85% of Australian exports to India.

A much larger Comprehensive Economic Cooperation Agreement, on the other hand, has been stuck in negotiations for over a decade. Discussions began in 2011, but were halted in 2016 due to the lack of progress.

The talks resumed in 2021, but a deal has yet to be reached. Don Farrell, the Australian Minister for Trade and Tourism, is part of Albanese's delegation, and the visit is expected to provide an opportunity to accelerate the ambitious deal.

Bilateral trade was $27.5 billion in 2021, and India claims that under the ECTA, it has the potential to nearly double to $50 billion in five years.