The details of the possible trade agreement are not yet clear, but India has expressed a desire to conclude numerous bilateral agreements throughout the region, as it remains opposed to large-scale agreements such as the RCEP. Despite the absence of a comprehensive trade agreement and the notoriously high trade barriers and the weak ease of trade in India, trade between the two countries has recently expanded, from $9.3 billion in 2007 to $20.8 billion in 2018. But this is a far cry from the expansionary growth that Australia is hoping for, as it tries to diversify its economy beyond over-reliance on China and is also trying to strengthen bilateral relations with India. India has already concluded several free trade agreements, in particular the South Asia Free Trade Agreement (SAFTA), the Comprehensive Agreement between India and ASEAN (CECA), the India-Korea Comprehensive Economic Partnership Agreement (EPA) and the Asian and Japanese EPA. The news follows months of trade tensions between Australia and its main trading partner, China. This has led many commentators to call on Australia to strengthen its trade partnerships with other nations in the region. While India has difficulty accepting the liberalized trade standards of most Western countries, it is also not in an economic context. In response to India`s economic strategy, published last year, the Indian government has commissioned an Australian reciprocal economic strategy, which is expected to be published before the end of the year. While this indicates that India clearly wants to develop its trade relations with Australia, it remains to be seen whether the New Delhi report recommends resuming negotiations on the free trade agreement. Australia and India are on the road to concluding the Comprehensive Economic Cooperation Agreement (ECSC), which is expected to provide a significant boost to investment in both sides and further strengthen bilateral economic relations. Independent models made in 2008 showed that an ECSC between Australia and India could result in a net increase in Australian GDP of $32 billion and India`s GDP of $34 billion over 20 years. The study concluded that resources, agriculture, manufacturing, financial services, software, telecommunications and education are likely to benefit the most from a trade agreement between India and Australia. Since the end of the study, these possibilities have become even clearer and greater.
In the last round of negotiations, Australia`s agricultural exports were seen as a sensitive issue between the two countries, with democratic calculations by the Bharatiya Janata Party (BJP) playing an important role in preventing agreements. More than half of India`s jobs are related to agriculture, and although the sector is highly inefficient, both in production and distribution – leading to frequent price spikes such as those that have hit the onions recently – no political party has the will to open up the sector to increased competition or even reform, even if the long-term benefits were considerable. This political reality indicates that Australia is unlikely to achieve favourable status for its agricultural products when negotiations resume.