Sydney: Australia and India agreed on Friday, 31 August, to study the possibility of a free trade agreement, in a move Trade Minister Warren Truss said was a natural result of New Delhi’s rising economic power.
Truss said there had been rapid growth in trade and investment between the two countries and the joint feasibility study would consider the potential benefits of a free trade agreement (FTA).
“The FTA feasibility study is a natural extension of the Australian government’s efforts to look at ways to tap the potential of India’s rise as a major economic power,” he said in a statement.
Two-way trade in goods with India reached A$11.4 billion (US$9.3 billion) in 2006-07, making the country Australia’s ninth-largest trading partner, he said. Services trade with India in 2006 was A$1.9 billion.
“India is emerging as one of the key drivers for global economic growth and its economic rise will be increasingly critical to world economic development,” Truss said.
“India’s middle class will especially present important opportunities for Australian business. India also stands to benefit from Australia’s significant economic strength and competencies.”
The feasibility study will begin in late 2007 and is expected to be completed in 2009.
It will examine the potential impact of an FTA on promoting economic growth, trade in goods and services, investment and other commercial linkages, Truss said.