The latest round of CECA negotiations was the first since the conclusion of India’s general elections in June 2024
India and Australia have resumed negotiations on the Comprehensive Economic Cooperation Agreement (CECA), marking a significant step forward in the efforts of both nations to bolster economic ties. The 10th round of discussions, which took place in Sydney from August 19 to 22, 2024, covered a broad spectrum of issues, including goods, services, digital trade, and government procurement.
 
The talks were a continuation of the ongoing dialogue aimed at finalising a trade agreement that could have far-reaching impacts on both economies.
 
The Indian delegation at the meeting was led by Rajesh Agrawal, the Chief Negotiator and Additional Secretary, Department of Commerce, GOI, and the Australian delegation was led by Ravi Kewalram, the Chief Negotiator and First Assistant Secretary in DFAT, Australia.
 
The latest round of CECA negotiations was the first since the conclusion of India’s general elections in June 2024, and it came after a five-month hiatus following the previous round. Despite the gap, intersessional meetings were held to maintain momentum and address key issues, setting the stage for this intensive round of discussions. Both sides have shown a strong commitment to not only maintaining but also enhancing their economic partnership, as evidenced by the wide range of topics covered during the talks.
 
The negotiations were described as "intensive," with both nations working diligently to narrow differences and find common ground on several key issues. The Indian and Australian delegations made concerted efforts to understand each other’s proposals better and identify ways to achieve a balanced outcome that respects domestic sensitivities. The focus was on ensuring that the CECA delivers meaningful benefits and a mutually advantageous outcome for both sides.
 
The talks in Sydney were not just about revisiting old issues; they also represented an opportunity to explore new areas of economic cooperation. In addition to the traditional areas of trade in goods and services, the negotiations also touched upon newer and more complex issues such as digital trade, agri-tech, and rules of origin. Government procurement was another critical area of discussion, with both sides aiming to create a framework that would facilitate greater access to each other’s markets.
 
Furthermore, the discussions highlighted the potential for collaboration in emerging sectors such as micro, small, and medium enterprises (MSMEs), gender, innovation, critical minerals, and sports. These areas represent the future of economic cooperation between India and Australia, with both nations recognizing the need to adapt to the changing global economic landscape.
 
Long History of Economic Engagement
Australia is an important trade and strategic partner of India. Both the countries are part of the 14 country Indo Pacific Economic Forum for Prosperity (IPEF) and Trilateral Supply Chain Resilience Initiative (SCRI) which is expected to strengthen the supply chain resilience in the region.
 
India and Australia share a long history of economic engagement, with the two countries first launching negotiations for a Comprehensive Economic Cooperation Agreement in May 2011. However, after nine rounds of negotiations, the talks were suspended in 2016 due to the complexities involved and the need to prioritize other regional trade agreements.
 
The process was reinvigorated in September 2021 when both nations formally re-launched CECA negotiations. The initial focus was on swiftly concluding an Economic Cooperation and Trade Agreement (ECTA), which was signed in April 2022 and came into effect in December of the same year. The ECTA was designed to liberalize and deepen bilateral trade in goods and services, laying the foundation for the more ambitious CECA.
 
The CECA negotiations that have resumed are now building on the outcomes of the ECTA, with the goal of capitalizing on the significant economic potential that exists between the two countries. The trade relationship between India and Australia has grown substantially in recent years, with two-way trade in goods and services valued at USD 46.5 billion in 2022. India is now Australia’s sixth-largest trading partner, and the youthful, growing Indian economy presents substantial opportunities for Australian businesses across a wide range of sectors, including education, agriculture, energy, and healthcare.
 
While the progress made during the 10th round of negotiations is promising, several challenges remain. Both sides have domestic sensitivities that need to be addressed, and finding a balance that satisfies both countries will be critical to the success of the CECA. The next round of negotiations, scheduled to take place in November 2024 in India, will likely focus on further narrowing these differences and working towards a final agreement.
 
Comprehensive Trade Deal Being Worked Upon
The proposed comprehensive trade deal under the CECA framework aims to cover five broad areas: goods, services, digital trade, government procurement, and product-specific rules under the rules of origin chapter. However, the inclusion of new areas such as competition policy, MSMEs, gender, innovation, agri-tech, critical minerals, and sports reflects the dynamic and evolving nature of the economic relationship between India and Australia.
 
The successful conclusion of the CECA negotiations would mark a new chapter in the India-Australia economic partnership, one that could set the stage for even deeper collaboration in the future. The agreement has the potential to significantly enhance bilateral trade and investment, creating new opportunities for businesses in both countries and contributing to the broader economic growth and development of the Indo-Pacific region.
 
As the negotiations continue, there is a strong sense of optimism on both sides. The commitment to achieving a balanced and mutually beneficial agreement is clear, and the progress made so far suggests that a final deal could be within reach. The next few months will be crucial, as both nations work to overcome the remaining hurdles and bring the CECA to fruition.
 
In conclusion, the resumption of CECA negotiations between India and Australia is a positive development that underscores the strong economic ties between the two nations. With both sides demonstrating a clear commitment to deepening their partnership, the prospects for a successful and comprehensive trade agreement are bright. As the talks move forward, the world will be watching closely to see how this important economic relationship evolves.