India and Australia are expected to launch negotiations soon on Free Trade Agreement (FTA) to enhance bilateral commerce, said an Australian official here on Monday.
A Joint Study Group, set up to conduct feasibility study for such an agreement, has prepared a report favoring such a pact. The report will now be studied by the respective governments before formal negotiations begin, said newly appointed Australian High Commissioner Peter Varghese in an interview. “The negotiations on the proposed FTA will begin after governments of both the countries examine the feasibility study on the pact. We expect it to start soon,” said Mr. Varghese.
He said Australia was looking forward to begin the negotiations on the trade pact that will entail tariff liberalisation and removal of other barriers.
The feasibility study, which began two years back, examined the potential impact on Australia and India of an FTA, including implications for economic growth, trade in goods and services and investment, as well as for other commercial linkages.
The trade and investment relationship between India and Australia has been growing over the years.
In 2007, India was Australia’s sixth largest market for goods exports, seventh largest market for services and seventh largest market for goods and services combined.
India is also Australia’s fastest growing major export market — with both goods and services exports increasing by an annual average of over 32 per cent over the last five years.
Two-way trade in goods and services in 2007 totalled $13.3 billion, making India Australia’s tenth largest trading partner. Australian export to India is concentrated mostly in commodities such as coal, gold and services like education.
Seeking greater economic ties between the two countries, Mr. Varghese said Australia would like to bring under the FTA both ” goods and services“.
“Australia is particularly keen to see lowering of duty on its wine in India,” Mr. Varghese said.
He added that Australia would like to help India by providing coal and liquefied natural gas (LNG). In this context, he also referred to approval given by his government to the $20 billion-pact between Australian oil and gas company Exxon Mobil and India’s Petronet.
As per the pact signed last month, Exxon Mobil will supply natural gas to Petronet from the Gorgan oil field for 15 years beginning 2014.
Mr. Varghese said India and Australia, which is one of the leading exporters of coal, could also expand cooperation in mining as it will help share technologies.