By the end of this year, India could see two trade deals – one with Australia and the other with the United Kingdom – to move ahead. Australian Foreign Minister Marise Payne, who is in Delhi, has indicated an “early harvest”. Speaking at an event by the Observer Research Foundation (ORF), she said, “Now we see ourselves in a structured and regular discussion on how to progress towards Comprehensive Economic Cooperation Agreement (CECA). An early harvest towards the end of this year.”
The matter was mentioned on Saturday at the inaugural event of 2+2 dialogue where the foreign and defence ministers of India and Australia participated in Delhi. External Affairs Minister S Jaishankar said, “We also underlined our commitments to creating secure and resilient global supply chains. We welcomed the renewed vigour with which both sides are now engaging on trade issues to fully expedite the complementarities between us.”
The vulnerabilities in supply chains have been exposed during the Covid-19 pandemic. An analysis by Deloitte says it is especially true for “those who have a high dependence on China to fulfil their need for raw materials or finished products.” Australia has also been at the receiving end of troubles from its largest trading partner, China over the last one year.
As per Australian Department of Foreign Affairs and Trade, the two way trade declined 3 per cent in 2020 and “a series of trade restrictive measures by China has also impacted Australian goods exports to China, which were around 7 per cent lower in the second half of 2020, compared to the second half of 2019”.
Payne further said, “Australia will always engage constructively with China but we will always, always consider the advancements of our national interest in doing so.”
Much of this has the potential to turn the tide towards India. In a post-Covid world, many countries are seeking to reduce their dependence on China and look at India as an alternative manufacturing hub.
However, in the same context, India’s call for Aatmanirbhar Bharat have been viewed as protectionist by the European Union. On the other hand, the UK does not view it as a protectionist measure and is willing to go for at least an interim deal after stepping out of the EU.
The pre-negotiation discussions are going on in the UK. UK-India Business Council (UKIBC) Managing Director, Kevin McCole told CNN-News 18 that over the summer they have had at least 20 round tables with companies. “There is real interest and excitement from those businesses,” he added.
He further said that one of the recommendations was that the governments look to seal an interim deal or a series of many deals, which McCole believes is a “great way to capture a range of benefits quickly. That would in particular boost economic recovery as we move into the post-pandemic period and build confidence, trust and momentum in the negotiations – means an early harvest agreement.”
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