Indo-Aus FTA: Tamil Nadu stands to gain, say stakeholders

CHENNAI: From agriculture, food, leather, pharma and IT, multiple sectors in Tamil Nadu stands to benefit from the India-Australia Economic Cooperation and Trade Agreement (ECTA) that was formalised last Thursday, stakeholders told DT Next.

Ganapathi Ramachandran, chairman, Trigyn Technologies, and chairperson of IIT Madras Entrepreneurs Forum, said it paves way for greater investments from Australia into the State and also employment generation for both skilled and semi-skilled workers. “There will be greater collaboration on research, development and innovation, apart from more favourable terms for students for their visas and work,” he said.

According to him, several labour-intensive Indian exports, including textiles and apparels, agriculture, leather, footwear, furniture, jewellery, engineering, pharmaceuticals and medical devices are expected to gain from the duty-free access. “There is also the expectation of increased investments in the above sectors.”

Echoing this, a leather industry veteran said exports, mainly footwear, from the State may see a 5 to 7 per cent rise. “But, though we can build our competitive skills, we cannot expect to dominate or capture markets as Vietnam and Cambodia, too, have the tariff advantage,” the person pointed out

“Certainly it will boost the competitive spirit of our exporters. Given that the global demand has slowed down and there was not much scope for new orders considering the impact of COVID, we are seeing an uptick for the first time,” the veteran said, anticipating positive sentiments to pick up towards the end of this month.

A senior official from the Engineering Exports Council said the duty drop from 5 per cent to zero would result in a spurt in engineering exports that is now hovering around $12-14 billion. As China has not been doing well, there is an opportunity to capitalise on sectors like auto parts, mining equipment, HVAC, machine tool accessories. “Demand in these segments is expected to boost exports. Within four months we will come to know more about the FTA as we are in the process of organising awareness and promotion meets,” the official said.

A Sakthivel, president, Federation of Indian Export Organisations (FIEO), said textiles and garments would gain immensely, along with opportunities for the handloom sector. Other segments from the State that can gain larger market share includes gems and Jewellery, leather and non-leather footwear segment, handicraft, auto parts and engineering products. Exports from Tamil Nadu to Australia was $384 million in FY 21- 22, and is already at $322 million in the current financial year from April to October. “[It is] expected to cross $500 million during this fiscal,” he said.

Ganapathy added that the State has all the ingredients in place for attracting investments like good policies, efficient infrastructure, employable workforce in the key sectors such as agro and food, leather, IT & ITeS and pharma. It also has traditional strengths in exports in these sectors and the needed policies to take advantage of the FTA.

“It also it has focussed agencies like Guidance TN (for investments & exports), FaMe TN (for MSMEs) and TANSIM (for startups and innovation) that can ensure that the FTA can be fully used by all industry stakeholders,” he opined.