India Australi trade diversified even as oil and diamonds brought trade value down post ECTA
Although the Australia-India Economic Cooperation and Trade Agreement may not have delivered significant trade gains for India, a Moneycontrol analysis shows that it has undoubtedly led to the diversification of India’s merchandise exports.
The share of top 10 exported goods from India to Australia came down to 63.5 percent in the first 10 months of 2024 compared with 68.6 percent in 2022, prior to the agreement’s signing in December 2022.
India traded $6.5 billion of products between January and October 2024, compared with $7.4 billion in the first 10 months of 2022.
One of the main reasons for this shift is the decline in petroleum exports from India. While the country exported $4.1 billion worth of petrol in 2022, this declined to $3.1 billion. Diamonds also seem to have taken a shine off the trade, as their value almost halved to $83 million in 2024 from $146 million in 2022 before the signing.
Win some, lose some
While the losses outweigh gains in overall trade, analysis shows that merchandise exports also show promise.
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Of the 685 items exported by India to Australia, 314 registered a rise in growth rate post-ECTA. Among the high-value items with $5 million trade and above, nearly half or 59 of 125, registered an increase in growth rate compared with the CAGR witnessed in the decade until the deal’s signing (2013-2022).
For instance, medicine exports grew 10.7 percent per annum between 2022 and 2024 to $336.5 million, compared with 8.2 percent growth witnessed between 2013 and 2024.
Mobile phones and related exports have increased six-fold since 2022, while exports of motor vehicles used in transport have nearly doubled to $45 million.
Babies and women’s garment exports have increased at triple the pace at over 20 percent than they did in the decade before the signing of the agreement.
Base metals, aluminium, chemical and fertiliser exports have declined during this period.