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April 5, 2022

Boost for Indian apparel sector with new Australia trade deal

India's apparel sector has hailed the new Australia-India Economic Cooperation and Trade Agreement (AI ECTA) which it says will act as a stimulus to exports, employment and investment in the sector.

By Fi Forrest

The Australia-India Economic Cooperation and Trade Agreement (AI ECTA) will eliminate tariffs on more than 85% of Australian goods exports to India and create new opportunities for wool producers in Australia.

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Tariffs will be eliminated on more than 85% of Australian goods exports to India (valued at more than AUD12.6bn a year), rising to almost 91% (valued at $13.4bn) over ten years.

Australian households and businesses will also benefit, with 96% of Indian goods imports entering Australia duty-free on entry into force.

India is the world’s largest democracy and the world’s fastest-growing major economy, with GDP projected to grow at 9% in 2021-22 and 2022-23 and 7.1% in 2023-24.

In 2020, India was Australia’s seventh-largest trading partner, with two-way trade valued at $24.3bn, and sixth largest goods and services export market, valued at $16.9bn.

“Our Government’s goal is to lift India into our top three export markets by 2035, and to make India the third-largest destination in Asia for outward Australian investment,” a joint statement from the office of Australia’s minister for trade, tourism and investment Dan Tehan and Prime Minister Scott Morrison says.

Tehan signed AI ECTA during a virtual ceremony on 2 April with India’s minister of commerce and industry Piyush Goyal.

Morrison notes the agreement would create “enormous” trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8bn each year.

“This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more,” he adds.

“This is great news for lobster fishers in Tasmania, wine producers in South Australia, macadamia farmers in Queensland, critical minerals miners in Western Australia, lamb farmers from New South Wales, wool producers from Victoria and metallic ore producers from the Northern Territory.”

Under AI ECTA, wool will have the current 2.5% tariffs eliminated on entry into force, supporting Australia’s second-largest market for wool products.

India’s Apparel Export Promotion Council (AEPC) took to Twitter to welcome the news, noting apparel is the largest category exported from India to Australia, and that India has the potential to export jersey, pullovers and T-shirts of man-made fibres – which it calls a “large chunk” of Australian apparel exports.

It adds the deal will further exports, employment and investment in the apparel sector. 

AI ECTA is an interim agreement and both countries continue to work towards a full Comprehensive Economic Cooperation Agreement.

The interim AI ECTA agreement follows the signing of the India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) in February which is expected to boost bilateral trade from the current US$60 bn to $100 bn in the next five years.

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2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
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