The India-Australia Comprehensive Economic Cooperation Agreement (CECA), which has been built upon the bilateral early harvest free trade pact, is unlikely to be finalized soon. With Australia preparing for federal elections in May 2025, it is not in a position to make significant decisions on key areas required to complete the deal, according to a source close to the development.

The early harvest pact, formally known as the India-Australia Economic Cooperation and Trade Agreement (ECTA), celebrated its second anniversary on December 29, 2023. Both nations remain optimistic that it will help achieve a bilateral trade target of AUD 100 billion (US $62 billion) by 2030.

Despite this progress, a recent stock-taking meeting revealed that differences remain in crucial areas, such as market access, government procurement, rules of origin, digital trade, and services. As a result, it may not be possible for Australia to conclude negotiations before the May 2025 elections.

Implemented on December 29, 2022, the ECTA saw Australia agree to remove tariffs on 96% of goods imported from India, with a target of 100% by January 2026. India agreed to remove tariffs on over 85% of Australian goods, increasing to 90% by January 2026.

Negotiations for the CECA, which have included ten rounds, aim to expand the agreement to cover more products and new sectors such as services, digital trade, government procurement, and product-specific rules. While Australia has largely accepted India's concerns regarding the dairy sector, it has demanded tariff reductions or eliminations for items like apples, chickpeas, and pistachios. India, in turn, seeks greater market access for textiles, chemicals, agriculture, electronics, and engineering, as well as more work visas.

Since the ECTA's signing, bilateral merchandise trade has more than doubled, increasing from $12.2 billion in 2020-21 to $26 billion in 2022-23. However, total trade moderated to $24 billion in 2023-24, with India's exports to Australia growing by 14%. For the current fiscal year, trade from April-November 2024 reached $16.3 billion. The preferential import data exchange between the two countries began in 2023, showing export utilization at 79% and import utilization at 84%.

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