International Journal of Social Science Research (IJSSR)

India-Australia Economic Cooperation and Trade Agreement, Exchange Rate and India’s Agricultural Exports: An Empirical Analysis

The India-Australia Economic Cooperation and Trade Agreement (ECTA), which came into effect in 2022, has the objective of strengthening bilateral trade by improving market access and reducing trade barriers. Besides the trade agreement, the exchange rate plays an important role in influencing export performance. Although previous studies have examined the impact of trade agreements or exchange rate movements separately, little evidence is available on their combined effect on India's agricultural exports after the implementation of ECTA. Therefore, this study examines the impact of the India-Australia ECTA and the exchange rate on India’s agricultural exports. The study uses secondary data on exports from UN Comtrade and exchange rate data from the Reserve Bank of India, along with the relevant government reports and documents from official publications. The study covers the time period from 2016 to 2024. Multiple regression analysis was used to estimate the impact of ECTA and the exchange rate on agricultural exports. The findings show that the exchange rate has both a positive and significant impact on agricultural exports, suggesting that depreciation of the Indian rupee makes Indian agricultural products more price-competitive in the international market. The ECTA coefficient shows that it has a positive relationship with exports. The coefficient for ECTA is found to be statistically insignificant, as pointed out. So this increase in exports can’t be attributed entirely to policy. The study says that ECTA and exchange rates are helpful in boosting agri-exports. There should be efforts to increase the Indian agricultural production capacity, enhance product quality to international standards and improve utilisation of the ECTA advantages over the longer time horizon.