India and Australia Work on a Bigger Trade Deal (CECA) and an Investment Treaty, with Critical Minerals at the Centre
India and Australia are negotiating two agreements at the same time: a Comprehensive Economic Cooperation Agreement (CECA) and a Bilateral Investment Treaty (BIT).
The CECA will widen the existing Economic Cooperation and Trade Agreement (ECTA), which came into force on 29 December 2022. The BIT will protect investors of each country when they put money into the other country.
The Union Ministry of Commerce and Industry shared these plans at the first Oceania International Conference of the Institute of Chartered Accountants of India (ICAI), held in Australia in September 2026.
Critical minerals are a key area: Australia has large reserves, and India wants to build processing and manufacturing capacity (for batteries, electric vehicles and electronics).
Other areas include investment, education (such as joint and dual degree programmes), renewable energy and the movement of skilled professionals. The ministry asked accounting bodies of both countries to sign deeper mutual recognition agreements (agreements that accept each other's professional qualifications).
India-Australia Economic Cooperation and Trade Agreement (ECTA / AI-ECTA)
The India-Australia Economic Cooperation and Trade Agreement, or ECTA, is a trade deal between India and Australia. It removes or cuts the import taxes (called tariffs or customs duties) that each country charges on the other's goods. It also makes it easier to sell services and to move students and workers between the two countries. It was signed on 2 April 2022 and came into force on 29 December 2022.
The CECA now being negotiated is the second step promised when ECTA was signed as an interim deal in 2022. The news shows that the two countries want the full agreement to cover new areas like critical minerals, education and the movement of professionals, not just tariffs.
Bilateral Investment Treaty (BIT) and India's Model BIT (2016)
A Bilateral Investment Treaty, or BIT, is an agreement between two countries to protect each other's investors. If a company from Country A builds a factory, buys a mine or sets up a business in Country B, the BIT promises that Country B will treat it fairly. If Country B breaks these promises, the investor can take the matter to an international tribunal (a special court made of independent judges called arbitrators).
India and Australia have had no investment treaty since India ended the old one in March 2017. The new BIT under negotiation would again protect Indian companies investing in Australian mines and Australian firms investing in India, which matters for the large sums expected in critical minerals and manufacturing.
Critical Minerals: Meaning, India's List and Global Supply Chains
Critical minerals are minerals that a country needs badly for its economy and security, but whose supply is at risk. They are used in things like mobile phones, electric vehicle batteries, solar panels, wind turbines, computer chips and defence equipment. Lithium, cobalt, nickel, graphite and the rare earth elements are common examples. A mineral becomes "critical" when it is both very important and hard to get reliably.
Critical minerals are one of the main reasons India wants a deeper CECA and an investment treaty with Australia. Australia has the minerals, and India wants to process them and use them in its factories. A treaty that protects Indian investment in Australian mines would support this partnership.
- India-Australia ECTA: signed 2 April 2022; in force 29 December 2022
- CECA talks: launched May 2011; suspended 2016; relaunched 30 September 2021
- Australia gives zero duty to Indian exports on 98.3% of tariff lines from day one, rising to 100% within five years
- India-Australia merchandise trade 2024-25: US$ 24.1 billion
- India's merchandise exports to Australia: about US$ 4 billion (2020-21) to about US$ 8.5 billion (2024-25)
- India-Australia BIT (1999) terminated on 23 March 2017; a new BIT is now under negotiation
- India's Model BIT (2016): five years of local remedies before arbitration; India-UAE BIT (in force 31 August 2024) cut this to three years
- India's list of critical minerals: 30 (Ministry of Mines, June 2023)
- National Critical Mineral Mission: ₹16,300 crore outlay (approved January 2025)