We have tried to divide them into a few steps based on the complexity of the agreements. 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. Free Trade Agreement/Free Trade Area (FTA): Whenever some countries meet and decide to abolish tariffs, import quotas and preferences for most (if not all) goods and services exchanged between them, they create a free trade agreement. The aim of a free trade area is to reduce barriers to trade so that trade can develop through specialisation, division of labour and, above all, comparative advantages. A free trade agreement can be a (bilateral) agreement between two countries or many (multilateral) countries. For example, the U.S.-Canada Free Trade Agreement was signed in 1988. Please note that each customs union, every common trade market, every economic union, the Customs and Monetary Union and the Economic and Monetary Union also have a free trade area. NAFTA is such a trading bloc.
A free trade agreement involves a reduction or complete abolition of tariffs on most trade, which allows for the free movement of goods, and, in more advanced agreements, the reduction of restrictions on investment and institutions allowing the free movement of capital and the free provision of services. India and South Korea are lowering tariffs to 11 tariff lines to expand bilateral trade by updating their existing free trade agreement, the Comprehensive Economic Partnership Agreement (CEPA). In the area of preferential trade or preferential trade agreements, participating countries grant each other preferential access to certain products. In addition to the ECSC, Australia and India are participating in negotiations on the Comprehensive Regional Economic Partnership – a proposed ASEAN-centric free trade area that would initially include the ten ASEAN member states and countries with free trade agreements with ASEAN.