AUD: Australia/India free trade area: A difficult balancing act – NAB

By FXStreet FXStreet (Delhi) – Research Team at NAB, suggests that the Indian market offers great potential for Australian exporters.

Key Quotes

“Already the world’s third largest economy and growing by over 7% annually, India looks set to overtake China as the world’s most populous country in the next 7 years and reap the growth dividend of a young population (when many countries face the drag of population ageing on growth). India’s middle class is growing rapidly, lifting spending power. By 2030 India’s middle class could have the largest share of that group’s global spending.”

“Despite this solid growth, Australian exports to India have been falling in recent years but this reflects specific issues in the three categories that dominate trade rather than a broader problem. Medium term export prospects are undoubtedly held back by India’s very closed market – only a handful of countries have higher tariffs on agricultural imports or larger barriers to services trade. Lowering these trade barriers therefore offers a big opportunity to Australian business.”

“However, the political sensitivities involved in securing a free trade agreement with India are probably even greater than was the case for China. In previous FTAs, India has refused to liberalise trade in a long list …read more

Source:: FX Street