Introduction
5.1
This chapter examines the trade in services and temporary movement of natural persons chapters in the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA). Trade in services is dealt with in Chapter 8 of the AI-ECTA, which contains substantive annexes addressing financial services, telecommunications services and professional services.
5.2
The AI-ECTA treats trade in services similarly to other trade agreements, though is less ambitious in some respects. Primarily, trade in services chapters in trade agreements address what might be considered regulatory barriers to the supply of services, whether they are supplied across borders, consumed abroad, through a commercial presence in the other party, or by natural persons temporarily moving between parties.
5.3
This chapter examines firstly the state of trade in services between Australia and India, before discussing key provisions in the trade in services chapter. It proceeds to examine key services outcomes committed by the Parties in their respective schedules, then the annexes dealing with financial, telecommunications and professional services.
5.4
The chapter also discusses the temporary movement of natural persons provisions in Chapter 9 of the AI-ECTA. Provisions in Chapter 9 deal with processing of applications, grant of temporary entry, transparency, and dispute settlement.
5.5
The categories of natural persons to which the chapter applies are established in each Party’s schedule to Annex 9A. The schedules also set out conditions or limitations on entry, including length of stay. There is no waiving of labour market testing in Australia’s schedule in the AI-ECTA.
5.6
There are two side letters relevant to Chapter 9 dealing with Australian post-study work visas and work and holiday visas. As discussed below, none of the measures in the chapter change Australia’s existing visa settings.
Services trade
5.7
Globally, services are the largest source of jobs and output with all segments of the economy depending on the provision of services. It is the incorporation of services into manufacturing processes that is significantly responsible for competitiveness in trade in goods, whether design, engineering, research and development, testing and analysis, telecommunications, financial services, logistics, marketing or other professional services. Further, integration of services with manufacturing and agriculture facilitates the creation of global value chains, which in turn allows entities and countries to specialise in tasks rather than goods.
5.8
The existing multilateral agreement on services, the World Trade Organization (WTO) General Agreement on Trade in Services (GATS) was negotiated more than 25 years ago as part of the WTO Uruguay Round, and since then members of the WTO have not been able to agree on an update to this agreement. Bilateral and plurilateral trade agreements that go beyond the GATS commitments may be considered one way of progressing services liberalisation.
5.9
Liberalising trade in services nevertheless contains complexities because services are largely intangible and non-storable and barriers can be difficult to identify. Most commonly, the barriers to international trade in services are not tariff barriers (in many instances services can be traded without the need to cross a border) but regulatory barriers. This is reflected in Chapter 8 of the AI-ECTA which, as discussed below, contains significant provisions on domestic regulation.
Australia-India trade in services
5.10
In An India Economic Strategy to 2035: Navigating from Potential to Delivery (India Economic Strategy), Peter Varghese wrote that in general India has not shown much flexibility in allowing foreign access to its services markets, ‘[b]urdensome domestic regulations deter services imports … [a]nd foreign participation is significantly restricted by vested interests that control professional standards and qualifications’.
5.11
The India Economic Strategy identified a number of barriers to the services sector in India including: an unwillingness to recognise some Australian education qualifications; a prohibition on foreign professionals in some sectors; weak intellectual property protection laws, approval and license bottlenecks and price controls in the health sector; and extensive regulatory requirements for the formation of new companies in banking, financial services and insurance. Peter Varghese nevertheless was of the view ‘there is the potential for change, and over time the services sectors could be an area where our trade agendas better align’.
Australia’s trade in services with India
5.12
The following table provides an overview of Australia’s trade in services with India across a period of 20 years. It shows Australia’s services exports are almost entirely the provision of education in Australia. India’s primary services exports to Australia are telecommunications, computer and information services, and other business services.
Table 5.1: Australian services trade with India: 2000-01, 2010-11, and 2020-21
|
|
|
|
|
|
Transport
|
53
|
28
|
5
|
|
Travel
|
441
|
3,186
|
5,329
|
|
Business
|
(40)
|
(134)
|
(7)
|
|
Personal
|
(401)
|
(3, 052)
|
(5,323)
|
|
|
(326)
|
(2,713)
|
(5,309)
|
|
|
(75)
|
(338)
|
(14)
|
|
Construction
|
8
|
1
|
-
|
|
Insurance and pension services
|
2
|
8
|
7
|
|
Financial services
|
2
|
4
|
14
|
|
Charges for the use of intellectual property n.i.e.
|
4
|
13
|
4
|
|
Telecommunications, computer and information services
|
7
|
36
|
83
|
|
Other business services
|
11
|
24
|
18
|
|
Personal, cultural and recreational services
|
4
|
3
|
475
|
|
Government goods and services n.i.e.
|
10
|
26
|
11
|
|
Total services credits
|
542
|
3,328
|
5,947
|
|
|
|
|
|
|
Services debits (imports) ($m)
|
2000-01
|
2010-11
|
2020-21
|
|
Transport
|
-25
|
-23
|
-1
|
|
Travel
|
-198
|
-610
|
-48
|
|
Insurance and pension services
|
-5
|
-8
|
-7
|
|
Financial services
|
-
|
-
|
-17
|
|
Telecommunications, computer and information services
|
-35
|
-108
|
-720
|
|
Other business services
|
-12
|
-98
|
-569
|
|
Personal, cultural and recreational services
|
-1
|
-5
|
-36
|
|
Government goods and services n.i.e.
|
-17
|
-32
|
-47
|
|
Services debits
|
-293
|
-883
|
-1,447
|
Source: Australian Bureau of Statistics.
Key outcomes
Access provided under the AI-ECTA
5.13
According to the National Interest Analysis (NIA), the AI-ECTA would:
… provide increased certainty for Australian service suppliers already doing business in India by binding existing market access, broadly in line with current settings or commitments India has made in other trade agreements’.
5.14
Specifically, the NIA stated ‘India will bind 85 subsectors for Australia in the ECTA [Economic Cooperation and Trade Agreement], a 43 per cent improvement on the current bound market access that Australia receives through the World Trade Organization under the General Agreement on Trade in Services’.
5.15
India’s commitments are detailed in its Schedule of Specific Commitments (see discussion below). Some of the additional binding (that is, making certain subsectors or modes of supply, subject to the market access and national treatment provisions in Chapter 8), is in relation to new sectors or subsectors, and some liberalises certain modes of supply in subsectors that are already partially liberalised under the GATS.
5.16
The NIA noted one of the achievements of the AI-ECTA is that India has agreed to ‘lock in’ existing market access (some of which was recently liberalised), including:
foreign equity limit—there was a March 2021 increase in the foreign equity limit in the financial services sector (commercial presence in banking and insurance sectors) from 49 per cent to 74 per cent and India has agreed to lock in 49 per cent for Australia
banking—investment in private banks with a foreign direct investment ceiling of 74 per cent.
Future market access through most-favoured-nation treatment
5.17
According to the NIA, India has committed to extend to Australia any future services market access improvement India agrees to give any future free trade agreement (FTA) partners in 31 sectors and subsectors.
5.18
In the text of the AI-ECTA, it is framed in the negative – that is, India reserves the right to negotiate better services market access with other countries and where it does this, it would only extend this better access to Australia in 31 sectors and subsectors.
5.19
This most-favoured-nation (MFN) commitment is different to the sectors and subsectors to which India has made market access and national treatment commitments, though there is some overlap.
5.20
Some of the MFN commitments relate to some of the sectors/subsectors India has newly opened to Australia in the AI-ECTA. The MFN commitment in these circumstances would apply to the modes of supply that remain unbound (that is, not liberalised) or subject to specified conditions (depending on the substance of future Indian FTA negotiations).
5.21
A number of the MFN commitments are not currently liberalised to any extent and are prospective only. These include adult education; interdisciplinary research and development services; services incidental to agriculture, manufacturing and forestry; and some environmental services.
5.22
The value and extent of coverage of the MFN commitment is difficult to determine. The listing in India’s annex of these sectors and subsectors is made under the WTO Services Sectoral Classification List headings, with references to the United Nations Central Product Classification (CPC) where further refinement is required. The CPC distinguishes around 600 services.
5.23
The Services Sectoral Classification List contains three levels: 12 sectors, 55 subsectors, and 116 sub-subsectors. The count of 31 sectors and subsectors contains elements from all three levels, and in some cases is further refined by reference to the CPC.
5.24
According to the NIA, Australia’s MFN commitment to India is prospective, meaning Australia would provide India with the same treatment as it provides to a future trading partner.
Other outcomes identified by the Department of Foreign Affairs and Trade
5.25
Australia’s FTA partners often obtain preferential Foreign Investment Review Board screening thresholds of approximately $1.2 billion in non-sensitive businesses. Under the AI-ECTA, Australia has offered a threshold of $500 million for incoming Indian investment in non-sensitive services sectors in Australia (this means it excludes sensitive services sectors, and non-services sectors like mining and quarrying, forestry, manufacturing, fishing and agriculture). Previously, India obtained the threshold of $289 million provided to private investors not from certain FTA partner countries.
5.26
The AI-ECTA also confirms Australia provides adequate data protection which means following legislative change in India, Australian businesses would be able to move copies of sensitive and critical data from India.
5.27
Through side letters, Australia has undertaken to make changes to Australian taxation legislation that would stop the taxation of offshore income of Indian firms providing technical services into Australia. Ordinarily Australia would not tax such services, but this occurs due to the interaction of the Double Taxation Avoidance Agreement between the Government of the Republic of India and the Government of Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion and Australian legislation. The Regulation Impact Statement estimated this would cost the Australian Government an estimated $145 million over the forward estimates.
Indian Government assessment of key outcomes
5.28
The Indian Department of Commerce has produced the following assessment of the outcome of the AI-ECTA in services.
Table 5.2: Indian Government assessment of key outcomes in services
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|
|
|
Australia has made commitments in around 135 subsectors (GATS-104) with MFN in most subsectors
|
India is making commitments in around 103 subsectors (GATS-36) with MFN in 31 subsectors
|
|
Key areas of India’s interest like information technology, information technology enabled services, business, professional services, health, education, audiovisual being committed by Australia
|
Key areas of Australia’s interest like business services, financial services, education being committed by India. Avenues for investment in many areas
|
|
Australia has taken commitments not to impose local presence requirements for cross-border delivery of services in most of the sectors
|
India would transition to a negative schedule approach in six years
|
|
Commitment to pursue Mutual Recognition Agreements
|
GATS-plus commitments in domestic regulations to provide certainty on ease of doing business measures related to services sectors
|
Source: Indian Government, Department of Commerce.
Key provisions in the trade in services chapter
5.29
The services chapter (Chapter 8 of the AI-ECTA) includes the standard liberalising obligations—national treatment, MFN, market access and local presence. Unlike the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland (AUKFTA), it does not contain provisions on performance requirements. Beyond these commitments the chapter deals broadly with the domestic regulation of the services sector, including authorisation and recognition of qualifications. Notably, the Parties also agree to future consideration on safeguard measures and subsidies, and to pursue an audiovisual co-production agreement.
Scope
5.30
Article 8.2 specifies the chapter applies to measures of a Party affecting trade in services, including at the central, regional or local government level. However, in order to fulfill commitments under the chapter, a Party need only take ‘such reasonable measures as may be available to it’ to ensure observance of the obligations under the chapter by regional and local governments and authorities.
Carve-outs
5.31
Like the AUKFTA, the following are not covered by the obligations under the chapter:
various subsidies or grants, including government-supported loans
services supplied in the exercise of governmental authority
cabotage in maritime transport services
certain aircraft repair and maintenance services, selling and marketing of air transport services and computer reservation services.
Views on the carve-out for government services
5.32
The Australian Fair Trade and Investment Network (AFTINET) was of the view the definition of public services is ambiguous and potentially undermines the effect of this carve-out which is intended to exclude public services from the scope of the chapter.
5.33
Services supplied in the exercise of government authority, according to the chapter, ‘means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers’.
5.34
AFTINET argued the move to competitive tendering means many public services are now provided in competition with other service providers, which would make the effect of this carve-out unclear. It stated the definition:
… is a commonly used definition, and we've been objecting to it for many years. The situation can arise where it's not clear whether something is still regarded as a public service, and therefore automatically exempted from all the provisions of the services chapter, or whether it needs to be specifically exempted because it's no longer considered, under the definition, to be a public service. We consider that's a dangerous ambiguity.
5.35
The Australian Council of Trade Unions (ACTU) also raised the same concern, stating:
We think that definition is ambiguous, especially in the context where so many government services can be in competition. There are a few, aged-care and home-care examples—for example, in the state of Victoria where I am. We would like a clearer, tighter definition there for sure.
Key liberalising obligations
National treatment
5.36
A Party (where it has made a commitment in its schedule), is to accord to services and service suppliers of the other Party treatment no less favourable than it accords to its own like services and service suppliers.
5.37
A Party may satisfy this requirement by according either formally identical or formally different treatment. Under the provision, formally different treatment, for instance, would be permitted providing it does not modify the conditions of competition in favour of services or service suppliers of the Party applying the treatment compared to like services or service suppliers of the other Party. This is a GATS provision and reflects the recognition formally identical treatment could put a foreign supplier in a less favourable situation.
Most-favoured-nation treatment
5.38
Article 8.5 requires a Party (where it has made a commitment in its schedule), to accord services and service suppliers of the other Party treatment no less favourable than it accords to like services and service suppliers of a non-Party. However, each Party reserves the right to apply differential treatment to services and service suppliers of a non-Party under an existing bilateral or multilateral international agreement.
Market access
5.39
The market access obligation has two parts: a Party is required to accord services and service suppliers of the other Party treatment no less favourable than what is specified under its schedule to Annex 8E. Because Australia does not have a schedule to Annex 8E, this applies to India. Australia is nevertheless bound by the market access obligation except where it identifies non-conforming measures.
5.40
Further, Parties are not permitted to adopt or maintain (in sectors specified/not specified in the respective schedules), a range of limitations including quotas on service suppliers, value of service transactions, total number of service operations, total number of natural persons who can be employed in a particular service sector, the type of legal entity, or certain limitations on the participation of foreign capital. The provisions in this section reflect the obligations under the GATS.
Local presence
5.41
Parties, subject to the relevant schedules and non-conforming measures, cannot require a service supplier to have a local presence in order to provide a service. This is not a provision in the GATS but is contained in other trade agreements like the AUKFTA.
Phase-in period for India
5.42
India is required to submit a Schedule of Non-Conforming Measures, agreed between the Parties, to the Subcommittee on Trade in Services no later than six years after the date of entry into force (EIF). It is required to provide to Australia its proposed Schedule of Non-Conforming Measures within five years of the date of EIF to provide for this agreement to occur. The commitments contained in India’s proposed Schedule of Non-Conforming Measures are to ‘provide an equivalent level of liberalisation’ and not decrease the level of commitments contained in India’s Schedule of Specific Commitments (Annex 8E).
5.43
The agreement provides for a consultation, verification and clarification process, and specifies when and how the amendment would come into force.
5.44
The Department of Foreign Affairs and Trade (DFAT) explained the implications of this article:
Negative lists are more comprehensive insofar as India’s commitments will apply to all services except where policy space has been reserved. Furthermore, the existing measures (laws, regulations etc) that India lists in Part A of its Schedule of Non-Conforming Commitments will be locked in, and should India liberalise those measures in the future, that liberalisation will automatically be locked in and cannot be reversed. India’s Schedule of Specific Commitments does not lock in liberalisation.
Transparency
5.45
In order to promote regulatory transparency, the Parties are to publish (where possible online and in English), all relevant measures of general application affecting trade in services and all international agreements relating to trade in services to which the Party is signatory. Parties are to respond to any request by the other Party for information on any regulations, international agreements, or any new or amended laws affecting trade in services.
Domestic regulation
5.46
The provisions under the domestic regulation article apply only where provided for under each Party’s schedule. This means a sector that is non-committed is exempted from these requirements, as are measures that are not subject to the national treatment or market access obligations. The article is similar to the relevant obligations contained in the GATS.
Administrative review
5.47
The chapter requires Parties to maintain an appropriate tribunal or procedure where, on request of an affected service supplier, there can be a prompt review (and where justified, remedies) for administrative decisions affecting trade in services.
Qualifications, standards, licencing
5.48
Measures relating to qualification requirements and procedures, technical standards and licencing requirements are not to constitute unnecessary barriers to trade in services. To ensure this, the Parties agree to amend the article (8.14), following consultation, to bring it into line with the outcomes of WTO negotiations pursuant to article VI(4) of the GATS. The aim of the amendment would be to ensure any qualification, technical or licencing requirements are based on objective and transparent criteria and not more burdensome than necessary. Any licencing procedures are not to be themselves a restriction on the supply of the service.
Authorisation
5.49
Where authorisation is required for a supply of a service on which a Party has made commitments, there are a number of requirements including in relation to: the fees charged; decision-making timeframes; providing information on the status of an application; providing reasons for the denial of an application; making provisions for submission of an application outside the territory of a Party (where permissible); endeavouring to accept applications in electronic format; and accepting authenticated copies of documents.
5.50
Parties are to provide adequate procedures to verify the competence of professionals of the other Party and where examination is required, examinations must if practicable be scheduled at reasonable intervals with a reasonable time provided to allow interested persons to submit an application.
5.51
Other provisions relate to reducing the impact where possible of multiple competent authorities, allowing submission of applications throughout the year, and ensuring the exercise of authorisation is independent from any supplier of the service for which authorisation is required. Many of these provisions go beyond the GATS but closely follow the AUKFTA.
Recognition
5.52
Article 8.15 allows a Party to recognise the education or experience obtained, requirements met, or licences or certifications granted in a non-Party. In effect, it allows a Party to enter into a recognition arrangement with a non-Party/Parties that does not include the other Party. This article closely follows article VII of the GATS which deviates from the MFN principle by allowing a Party to recognise qualifications (and so on) gained in one jurisdiction but not others.
5.53
If this occurs, the Party that is not a signatory to the recognition arrangement/agreement must be afforded adequate opportunity to negotiate accession.
Monopolies and exclusive service suppliers
5.54
Parties are required to ensure any monopoly supplier of a service in its territory does not act in a manner inconsistent with the national treatment and market access obligations in the chapter. Further, a supplier is not permitted to abuse its monopoly position when supplying a service outside the scope of its monopoly rights, where the service is subject to the Party’s commitments.
5.55
Where a Party has a reason to believe the provisions in article 8.16 are not being complied with, it can request specific information from the other Party concerning the relevant operations. These provisions are very close to the GATS provisions.
Business practices
5.56
Article 8.18 is identical to that in the GATS. The Parties recognise certain business practices of service suppliers may restrain competition and restrict trade in services. Provisions provide for the Parties to enter consultations to eliminate such practices.
Denial of benefits
5.57
Consistent with the GATS, the benefits provided under the chapter may be denied on several grounds, including where a service is supplied from or in the territory of a non-Party; by a person that is not a service supplier of the other Party; and in some cases relating to a maritime transport service where a vessel is registered in a non-Party or the person of a non-Party operates the vessel.
5.58
Subject to conditions, the AI-ECTA allows Parties to deny the benefits of the agreement in cases where a prohibition on transactions with a particular person would be violated or circumvented if the benefits of the chapter were accorded to the person.
Safeguard measures and subsidies
5.59
The Parties agree to revisit the inclusion of provisions dealing with safeguard measures and subsidies, pending negotiations under the auspices of the GATS (articles X and XV).
5.60
In the interim, where a Party considers it is adversely affected by a subsidy of the other Party related to trade in services, it may request consultations. However, there is no recourse to dispute settlement under Chapter 13 for any dispute arising under article 8.22.
Cooperation
5.61
The Parties undertake to discuss and agree on cooperation activities and programs to improve domestic services capacity. In particular, they agree to endeavour to enhance cooperation in trade in audiovisual services, including by pursuing an audiovisual co-production agreement.
Subcommittee on Trade in Services
5.62
The Parties agree to establish a Subcommittee on Trade in Services whose functions would include reviewing and monitoring the implementation of the chapter, considering matters arising, and facilitating the exchange of information between Parties.
Schedules and key liberalising obligations
5.63
How each of the key liberalising obligations in the services chapter—national treatment, MFN treatment, market access and local presence—are operationalised is determined by the commitments specified in each Party’s schedule. Each Party is required to make commitments on the services that would enjoy preferential treatment in either a Schedule of Specific Commitments or Schedule of Non-Conforming Measures.
5.64
In the AI-ECTA, India takes a positive list approach (Annex 8E – Schedule of Specific Commitments) while Australia maintains a negative list approach (Annex 8F – Schedule of Non-Conforming Measures). India is required to list all the sectors and subsectors to which the liberalising obligations do apply and any exceptions or conditions to these commitments (that is, where the liberalising obligations do not apply or are somehow limited). Australia lists only the non-conforming measures divided in two parts—Part A where non-conformity cannot be increased and Part B where measures may be made more non-conforming.
5.65
Parties may negotiate additional commitments, for instance, relating to qualifications, standards or licensing matters.
5.66
Subject to notification and a requirement for the Parties to attempt to reach agreement on appropriate compensatory adjustment, a Party may modify or withdraw any commitments made in their schedule at any time after three years from the date on which the commitment entered into force. Provision is made for disagreements to be dealt with under the dispute settlement chapter (Chapter 13), and if the finding of a panel with regard to a disagreement is not complied with, the affected Party may modify or withdraw substantially equivalent benefits in conformity with the findings of the panel.
India’s schedule
5.67
India’s commitments are made against the four modes of supply and are typically ‘none’ or ‘unbound’. None means the mode of supply complies with the liberalising obligations under Chapter 18 relating to market access or national treatment. Unbound means India undertakes no specific commitment and in practice is able to introduce or maintain measures inconsistent with the market access or national treatment provisions for the particular mode of supply identified.
5.68
India’s schedule is divided into two sections: horizontal commitments and sector specific commitments. Measures identified in horizontal commitments apply to all sectors listed in the schedule. There are also explanatory notes that deal with a number of matters, including:
adding any terms, limitations, conditions or qualifications to the schedule that existed at the regional level of government at 1 January 2005 and providing for these to be amended to the extent conformity is not decreased
exemptions for qualification requirements and procedures, technical standards, authorisation requirements and licencing requirements and procedures that are not listed
exemptions to provide for a range of educational issues.
Horizonal measures in India’s schedule
5.69
India has specified a number of horizontal measures regarding market access, including:
exclusion of social services established or maintained for a public purpose, including income security, social security, insurance, social welfare, public education, public training, public health, childcare, public utilities, public transport, freight transport and public housing
unless otherwise specified, commercial presence is to take the form of incorporation of a company in India as a joint venture or wholly owned subsidiary
the right to adopt or maintain any measure it considers necessary to protect its national security interests.
5.70
Horizontal measures that modify the national treatment provisions include:
cases of joint ventures or collaboration with public sector enterprises where preference in access would be given to foreign service suppliers or entities that offer the best terms for transfer of technology
subsidies are available only to domestic service suppliers
in certain circumstances, a person resident outside India may acquire immovable property.
Sector-specific obligations
5.71
As noted above, DFAT estimated that in comparison to its schedule to the GATS, India has increased market access for Australia by around 43 per cent and Australia’s access is broadly equivalent to that India has offered other FTA partners. India has done so by specifying more sectors or subsectors would be subject to the market access and national treatment obligations (though all remain subject to some limitations, mostly on commercial presence and also on presence of natural persons), and by liberalising some of the existing limitations on various modes of supply.
5.72
Some significant new sectors and subsectors where there has been partial liberalisation in comparison to the access Australia currently has through the GATS include:
accounting and bookkeeping services (no liberalisation of commercial presence)
advisory and consulting relating to taxation services (no liberalisation of commercial presence)
architectural services (commercial presence through incorporation as a partnership firm constituted by architects)
various research and development services
some management consulting services
telephone based support services including call centre services
internet and infrastructure services (no liberalisation of cross-border supply, liberalisation of consumption abroad, some liberalisation of commercial presence)
single brand product retail (liberalisation only in commercial presence subject to foreign investment limitations)
environmental services including refuse disposal and sanitation services
life insurance (only liberalisation of commercial presence for market access subject to foreign ownership limit)
maritime transport services (subject to a range of limitations on commercial presence)
some liberalisation of maritime auxiliary services.
5.73
Liberalisation of existing arrangements for market access and national treatment, include:
engineering services (cross-border supply, consumption abroad and commercial presence contain no limitations)
computer and related services (removal of limitations on three of four modes of supply)
telecommunications services, including coverage of more types of services (liberalisation of consumption abroad, some liberalisation of commercial presence limitations)
banking and other financial services (some liberalisation of commercial presence limitations).
5.74
The value of these opportunities for Australian service suppliers is not clear. For instance, globally India has a net surplus in its services trade and its main services exports are computer, information and telecommunication services. The banking sector in India is dominated by 12 public sector banks whose share of total assets is 70 per cent. The insurance sector is dominated by public-sector companies, particularly for life insurance, and insurance penetration in India is low (around 4 per cent).
Australia’s schedule, the Part B omission issue and other matters
5.75
Australia’s non-conforming measures identify the sector/subsector, the particular obligations concerned, the level of government, the relevant laws or regulations (this is indicative not definitive), and a description that sets out the non-conforming measure for which the entry is made. Australia specifies non-conforming measures to the national treatment, MFN, market access and local presence obligations in Chapter 8.
5.76
Like India (and also in the AUKFTA), Australia deals with a number of matters in its explanatory notes including:
exemptions for qualification requirements and procedures, technical standards, authorisation requirements and licencing requirements and procedures that are not listed (Part A only)
the right to maintain or add any non-conforming measures at the regional (state/territory) level of government that existed at 1 January 2005 but is not listed (Part A only)
exemptions to provide for a range of educational issues (Part B only).
Views on exemptions for state and territory legislation
5.77
AFTINET noted with regard to the exemptions for state and territory legislation that in previous agreements all existing state government non-conforming regulation had been exempted. However, it argued this blanket exemption did not apply in the AI-ECTA.
Our concern about this is that state governments had to in a relatively short period of time—over months—provide a list of all possible regulation which needed to be exempted. What we are asking for from the government … is that there should be a careful review done, in conjunction with state governments, to ensure that everything that needs to be exempted has been exempted. If it hasn't been, it should be addressed in the negotiations for a comprehensive agreement.
Part B omission issue
5.79
As discussed above, Australia’s Schedule of Non-Conforming Measures is divided into two parts: Part A where non-conformity cannot be increased and Part B where new measures may be introduced or existing measures may be made more non-conforming. While the explanatory notes for Part A include the exemption for qualifications/standards/authorisation/licencing, this is not included in Part B. This means there is no provision for qualifications/standards/authorisation/licencing to be changed in a way that may make them more restrictive over time.
5.80
This differs from the AUKFTA, where the exemption is made in Part A and Part B.
Views on the Part B omission issue
5.81
AFTINET expressed concern about the public policy implications of the absence of the exemption for qualifications/standards/authorisation/
licencing in Part B of Australia’s Schedule of Non-Conforming Measures, in contrast to its inclusion in Part A:
This would mean that governments can continue to have existing regulation of licensing, qualifications and service standards in any service if required by government policy, including services like aged care or disability services.
However, unlike the Australia-UK [United Kingdom] FTA, this exemption is not included in Annex 8F part B, which deals with the ability of governments to change or increase future regulation, for example to implement government policy changes like the recommendations of the Royal Commission into Aged Care Quality and Safety.
It makes no sense to exempt existing regulation on licensing qualifications on service standards from the rules of the agreement but not to exempt from such rules future regulation required by government policy, like the recommendations of the Royal Commission into Aged Care Quality and Safety which are still in the process of being implemented.
DFAT negotiators have not provided any explanation as to why the Australia UK free trade agreement specifically enabled governments to make new regulations in relation to future regulation of licensing qualifications and service standards, but the … [AI-ECTA] does not.
5.82
During the public hearing, the ACTU explained the importance of provisions regarding qualifications/standards/authorisation/licencing:
It's really about making sure that people have the appropriate skills and good character to do a lot of this work. That will, no doubt, constantly be reviewed and need to improve over time.
A really good example would be the royal commission into aged care, which reported last year and talked about the need to professionalise what really is an industry in crisis across a range of occupations. We would not want to see a trade agreement inadvertently freeze that process, when we know so much more work needs to be done to invest in careers and to support that with a proper qualifications framework. I think that's one area we'd like to look at.
5.83
In response to questioning, DFAT stated:
The inclusion of Paragraph 4 in Part A of Australia’s Schedule of Non-Conforming Measures (Annex 8F) has no impact on Australia’s ability to change regulations for public policy reasons. Paragraph 4 of the Explanatory Notes to Part A is not a carve-out. Rather, Paragraph 4 informs the reader about Australia’s approach to scheduling – specifically, that measures (laws, regulations etc) that conform with the Agreement have not been scheduled in Part A.
Paragraph 4 was included in Part A because each entry in Part A relates directly to existing measures.
Paragraph 4 has not been included in Part B because Part B carves out broader policy space (including for future regulation), and existing measures are identified for transparency purposes only (see paragraph 2(f) of the Explanatory Notes to Part B). The fact that Paragraph 4 has not been included in Part B has no impact on Australia’s ability to change regulations for public policy reasons.
Non-conforming measures
5.84
Part A of Australia’s schedule, which is subject to a stand-still requirement, includes the following non-conforming measures to some or all the liberalising obligations:
Australia’s foreign investment framework
residency requirements pursuant to the Corporations Act 2001 and Corporations Regulations 2001
various limitations with regard to Telstra, Commonwealth Serum Laboratories, Australian international airlines, including Qantas, and Australia Post
a number of measures regarding maritime transport services and shipping
state-based requirements regarding auditing and liquidation services, fisheries, real estate services, incorporated associations, trustees, Mt Isa Mines, transport services and pharmacies
banking regulation, including in relation to authorised deposit-taking institutions.
5.85
Part B of Australia’s schedule, where new or more non-conforming measures to some or all of the liberalising obligations can be introduced includes:
any measure with respect to the supply of a service by the presence of natural persons, subject to the provisions of Chapter 9 (temporary movement of natural persons), that is not inconsistent with Australia’s obligations under article XVI of the GATS
preferences to any Indigenous person or organisation or providing for the favourable treatment of any Indigenous person or organisation
Australia’s foreign investment framework
law enforcement and correctional services, and to the extent that they are social services established or maintained for a public purpose: income security or insurance, social security or insurance, social welfare, public education, public training, health, child care, public utilities, public transport, and public housing
broadcasting local content quotas, co-production arrangements, measures with respect to the creative arts, Indigenous traditional cultural expressions and other cultural heritage
from the MFN obligation specifically, any measure according more favourable treatment to any service supplier under any existing bilateral or multilateral agreement, with regard to a Pacific Islands Forum member state, and with regard to fisheries, aviation, and maritime matters
biological resources and fishing grounds in the Australian Fishing Zone or waters under the jurisdiction of a state or territory
hydraulic fracturing and exploration and mining of coal seam gas
electricity production, collection, storage, and distribution
some aspects relating to the provision of financial services, including government guarantees
for modes of supply 1, 2 and 4, measures with regard to banking and other financial services including insurance and insurance-related services
state/territory central financing authorities.
Annexes to the trade in services chapter
5.86
The trade in services chapter (Chapter 8) contains four annexes, dealing with financial services, telecommunications, professional services, and the foreign investment frameworks of each Party. The annex on the foreign investment frameworks of each country is brief and exempts each Party’s foreign investment framework from dispute settlement under Chapter 13 of the AI-ECTA.
Financial services annex
5.87
The AI-ECTA adopts the same definition of financial services as the GATS and AUKFTA and goes beyond the commitments in the GATS in areas including regulatory transparency, transfer of financial information, access to payment and clearing systems, and cross-border electronic payments. It is, however, less far-reaching than other trade agreements Australia has signed, such as the AUKFTA.
Ability to enforce laws
5.88
The obligations in the annex do not prevent a Party adopting or enforcing measures necessary to secure compliance with laws and regulations that are not inconsistent with the annex, including those relating to preventing deceptive or fraudulent practices, or to deal with default on financial services contracts. Any such laws and regulations must not be applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination or a disguised restriction on investment in financial institutions or trade in financial services.
5.89
As with the AUKFTA and the GATS, Parties are able to adopt or maintain measures for prudential reasons. If such measures do not conform with the provisions of the AI-ECTA, they cannot be used as a means of avoiding a Party’s commitments or obligations under the AI-ECTA.
New financial services
5.90
A host Party is required to endeavour to permit financial institutions of the other Party, established in the territory of the host Party to supply a new financial service in the territory of the host Party that the host Party would permit its own financial institutions to supply without adopting a law or modifying an existing law. Such an activity can be subject to relevant licensing, institutional or juridical form, or other requirements.
Recognition
5.91
As discussed above, recognition provisions allow a partial departure from the MFN principle. Under article 8A.7, a Party may recognise the prudential measures of any international standard setting body, the other Party, or a non-Party in determining how the Party’s measures relating to financial services shall be adopted. Provision must be made for a Party to the AI-ECTA who is not a party to a recognition agreement or arrangement to negotiate accession or to negotiate a comparable agreement. This reflects provisions in the AUKFTA and the GATS.
Regulatory transparency
5.92
The Parties commit to promoting regulatory transparency in financial services and agree to ensure any measures of general application adopted or maintained are promptly published or otherwise made publicly available. To the extent practicable, the Parties undertake to meet a number of transparency measures including providing for consultation on regulations prior to their being adopted; providing notice of regulations prior to their coming into effect; providing information to interested persons of the other Party of regulatory and legislative requirements; meeting timeframes for administrative decisions; and providing feedback on administrative decisions.
Transfers of financial information and processing of financial information
5.93
Parties may have their own regulatory and legislative requirements concerning the transfer of financial information and processing of financial information. Other than in pursuing their regulatory and legislative requirements, Parties are not to take measures that prevent transfers of financial information necessary for the conduct of the ordinary business of a financial service supplier in their territory, or prevent the processing of financial information necessary for the conduct of the ordinary business of a financial service supplier in their territory. A Party is not required to allow the cross-border supply or consumption abroad of services in relation to which it has not made commitments.
Cross-border electronic payments
5.94
The Parties agree to support the development of cross-border electronic payments, including those provided by non-banks and FinTech entities, to foster the development and adoption of internationally accepted standards for electronic payments and promote innovation in electronic payment infrastructure.
Other provisions
5.95
Other provisions deal with requirements for membership of self-regulatory organisations, providing access to payment and clearing systems operated by public entities, avoiding the imposition of arbitrary requirements on the performance of back-office functions, and undertaking assessment of credit ratings. A Party remains able to require a financial institution in its territory to retain certain core functions.
Telecommunications services annex
5.96
Provisions relating to telecommunications services are similar to those contained in the AUKFTA, though the AUKFTA contains more prescriptive detail in some sections. The annex deals with measures affecting access to and use of public telecommunications networks or services and related measures.
5.97
The purpose of the annex is to reduce barriers to competition in telecommunications by providing for access to each Party’s public telecommunications networks and services (subject to limitations in each Party’s schedule). The annex covers telecommunications regulation, access to networks and services, and transparency on mobile roaming rates. Significant portions of the annex deal with the behaviour of major telecommunications suppliers of public telecommunications networks and services. The following highlights some of the key provisions in the annex.
Access to and use of public telecommunications networks and services
5.98
The annex requires service suppliers of the other Party to be accorded access to and use of public telecommunications networks and services on reasonable and non-discriminatory terms and conditions, and to be able to use such networks and services for the movement of information within and beyond territorial borders. The annex requires Parties to permit a number of activities to ensure providers are able to supply services, including allowing the interface of equipment with the public telecommunications network, allowing for the interconnection of private leased or owned circuits, and permitting the supplier to choose its operating protocols.
5.99
A range of provisions deal with conditions that may be placed on access and use of public telecommunications networks and services, and primarily deal with measures necessary for technical integrity and security.
5.100
Each Party retains the right to define its universal service obligations and provided they are administered in a transparent, non-discriminatory and competitively neutral manner, they would not be regarded as anti-competitive.
5.101
Parties also retain the right to apply spectrum and frequency management policies where consistent with the AI-ECTA.
Interconnection
5.102
Parties are to ensure interconnection between each Party’s suppliers of public telecommunications networks and services, and must limit the use or provision of confidential information obtained by public telecommunications network or service suppliers as a result of interconnection arrangements to the provision of the services.
5.103
A range of provisions deal with measures to ensure major suppliers provide meaningful interconnection facilities for suppliers of public telecommunications networks or services of the other Party. In general these provisions require transparent and non-discriminatory terms, timely service, and the ability to interconnect at various points in the network. Access is to be offered to network elements on an unbundled basis on reasonable and non-discriminatory terms, and various specified offers or connection agreements must be possible with certain details made publicly available.
Treatment by major suppliers
5.104
Parties are to ensure major suppliers in their territory accord to suppliers of public telecommunications networks and services of the other Party treatment no less favourable than accorded in like circumstances to their subsidiaries and affiliates, or non-affiliated service suppliers with regard to availability, provisioning, rates or quality of like public telecommunications networks or services, and the availability of technical interfaces for interconnection.
5.105
Parties are required to maintain measures to prevent anti-competitive practices by suppliers, including anti-competitive cross-subsidisation, using information obtained from competitors with anti-competitive results, and not making technical information available on a timely basis to enable service provision.
International mobile roaming
5.106
The Parties agree to endeavour to cooperate to promote transparent and reasonable rates for international mobile roaming services, including by ensuring such rates are easily accessible to consumers. The Parties may cooperate to implement measures affecting rates or conditions applicable to wholesale international roaming services.
Enforcement
5.107
Each Party’s competent authority is to have the authority to enforce measures relating to the obligations concerning interconnection, mobile number portability and resale, including the ability to impose effective sanctions.
Other provisions
5.108
Other provisions in the annex deal with mobile number portability (to the extent technically feasible); the ability to co-locate equipment and access facilities, including unbundled network elements; publication of licencing criteria; the requirement for an independent regulatory and dispute resolution body that operates in an impartial manner with respect to all market participants; transparency in regulation; and access to submarine cable systems.
Concerns about telecommunications liberalisation
5.109
Mr Nicholas Davis raised concerns about a perceived lack of equivalence in the level of access provided to each Party’s telecommunications markets. Mr Davis argued there were greater limitations on Australians wishing to operate in India’s market in relation to growing internet censorship, a requirement for a company to be registered in India, and limitations on foreign investment.
Professional services annex
5.110
The objectives of the annex on professional services include encouraging the development of systems for the recognition of professional qualifications and experience, and registration and licensing of professionals (including through mutual recognition) to better facilitate trade in professional services between the Parties. It contains no obligations to recognise any particular profession and obligations are largely limited to encouraging professional bodies to engage in recognition activities.
General principles
5.111
Parties are themselves to consider or encourage their relevant bodies to consider:
the application of ethical, conduct and disciplinary standards to professionals of the other Party in a manner that is no more burdensome than the application of those standards to professionals of the Party in the relevant professional services subsector
accommodating the provision of professional services on a cross-border basis through the use of telecommunications technology and/or by establishing a commercial presence
permitting service suppliers of each Party to work together.
Recognition activities
5.112
Parties are to encourage their relevant bodies to establish dialogues with a view to concluding within 12 months of EIF, mutual recognition or similar arrangements that would provide for the recognition of qualifications, licensing, and registration procedures across professional services and services in regulated or licenced occupations.
Temporary measures
5.113
Parties may consider, without the need for further written examination, providing for temporary, limited or project-specific licencing or registration regimes, or the granting of a licence or registration.
Professional standards
5.114
The Parties are to encourage relevant bodies to work towards developing mutually acceptable professional standards in agreed areas.
Professional Services Working Group
5.115
The Parties agree to establish a Professional Services Working Group to facilitate achievement of the objectives of the annex and the effective implementation and administration of recognition systems. The working group would support the relevant bodies in pursuing the objectives of the annex, and may consider developing its own model mutual recognition arrangements and procedures for temporary or project-specific licensing. The working group would report to the Subcommittee on Trade in Services on its progress no later than two years after the date of EIF.
Views on the omission of legal services
5.116
The Law Council of Australia’s International Law Section (Law Council of Australia) welcomed the AI-ECTA as a first step, noting the absence of professional legal services from India’s Schedule of Specific Commitments. It was also supportive of the framework for engagement on all professional services, including legal services.
5.117
As it currently stands, the Law Council of Australia stated, the Indian legal market is closed to foreign lawyers:
Only lawyers licensed to practise in India and regulated by the Bar Council of India are permitted to practise law – a position which includes both foreign and local law. There is also no provision for foreign lawyers to requalify in India, and no form of commercial association is currently permitted between foreign and local lawyers and law firms.
5.118
The Law Council of Australia stated it would welcome rights for Australian lawyers to work in India with local lawyers in a manner that is flexible and suitable to the needs of transnational clients. In particular, it would support efforts to secure rights for Australian lawyers to:
establish a branch office and use their firm name of choice
enter into a voluntary commercial association with local lawyers and employ local lawyers to provide multijurisdictional legal services
provide legal services on a fly-in, fly-out basis
prepare and appear in arbitrations and mediations and serve as arbitrators and mediators
participate in secondment or similar exchange programs
obtain appropriate working visas without onerous conditions.
Temporary movement of natural persons
5.119
Chapter 9 of the AI-ECTA applies to measures that affect the temporary movement of natural persons of a Party into the territory of the other Party where that person is engaged in trade in goods, supply of services, or the conduct of investment.
5.120
There are also two side letters relevant to the chapter, dealing with post-study work visas and work and holiday visas. The provisions of the chapter would be operationalised through each Party’s Schedule of Specific Commitments, which are contained in an annex to the chapter.
5.121
According to the NIA, the chapter and side letters aim to foster people-to-people links, support trade and business, and contribute to cultural exchange between Australia and India.
5.122
The NIA stated Australia is obtaining commitments from India that reflect the best of India’s existing FTAs, including additional commitments for Australian contractual service suppliers and independent professionals beyond that which India has previously granted.
5.123
Australia, said the NIA, is providing mobility outcomes to India that are consistent with its existing visa settings. Where labour market testing is an existing requirement for a visa, this remains—there is no waiver for labour market testing.
5.124
During the public hearing, it was emphasised that the commitments made on labour mobility were consistent with Australia’s existing visa settings and previous FTAs, including equivalent commitments on categories of entrant, length of stay, spouses and dependents.
Views on the temporary movement provisions
Support for the provisions
5.125
The Business Council of Australia (BCA) supported the temporary movement provisions as they ‘enhance opportunities for business travel and encourage people to travel and provide services in each respective country, supporting greater knowledge sharing and building of relationships’.
5.126
However, it also argued for greater mobility between Parties, stating that the Comprehensive Economic Cooperation Agreement (CECA) (to be negotiated following the AI-ECTA) ‘should include ways to further enhance and streamline the flows of highly skilled people between Australia and India’.
5.127
The BCA stated the ‘visa system needs to be competitive with other countries such as the US [United States], Canada, and the UK, so future arrangements including if delivered through CECA, should be designed accordingly. This could include waiving labour market testing in certain high skilled sectors’.
5.128
The Group of Eight supported the AI-ECTA but also advocated for greater ambition, including through a high performing individual visa (HPI). It argued, ‘[a]n Australian HPI would make a valuable contribution to further strengthening ties with like-minded nations such as India, while at the same time supplementing the existing post graduate study rights access by targeting high achieving graduates in areas of Australia's workforce need’.
Concerns about the provisions
5.129
The ACTU was of the view provisions related to the temporary movement of workers should not be included in trade agreements, particularly in the absence of strong protections for workers’ rights in a labour chapter.
5.130
AFTINET agreed, stating ‘[t]hese arrangements [temporary worker arrangements] should be government-to-government agreements separate from trade agreements. Such agreements, like the Pacific Labour Scheme, can have specific provisions to protect worker’s rights and specific obligations for employers’.
5.131
According to AFTINET, ‘[n]umerous studies show that the recent expansion of numbers of temporary migrant workers tied to one employer has resulted in exploitation of these workers, because they are tied to one employer and can be deported if they lose the job’.
5.132
The ACTU raised similar concerns, stating ‘[t]emporary migrant workers are highly vulnerable to exploitation and modern slavery due to their temporary status which limits their bargaining power and agency. Despite employer claims that exploitation is the result of a few “bad apple” employers, there is a strong body of evidence, according to the ACTU, that exploitative practices such as wage theft are endemic and widespread among migrant workers’.
5.133
The ACTU stated that rather than dealing with migration in trade agreements, there needed to be policy conversation and consensus built across government, industry and unions, about:
… what we should do with migration, and that is: improve pathways to permanency; have proper, genuine assessments of skill shortages that look to fill skills locally; then use temporary migration on a more measured basis; and, importantly, have the safeguards to make sure a lot of the scandals and abuses don't happen. Good intentions will not stop the systematic exploitation of temporary overseas workers. When trade agreements start to carve out exceptions, it's like so many termites attacking a system that everyone wants to build. We acknowledge that the commitments in this interim agreement are fairly modest, but they add to the pile of termites that we say will undermine a fair and proper migration system.
Key provisions in the temporary movement for natural persons chapter
5.134
The chapter on the temporary movement for natural persons (Chapter 9) is relatively brief and in effect requires an eligible person be to granted temporary entry providing certain processes and procedures are followed. It also establishes a Working Group on the Temporary Movement of Natural Persons to monitor the implementation of the chapter, exchange information, and consider further measures to facilitate temporary entry.
5.135
In its respective schedule, each Party is required to set out its commitments regarding the temporary entry of natural persons, which must include the conditions and limitations for entry and temporary stay, including length of stay for each category of person.
5.136
Notwithstanding these commitments, nothing within the AI-ECTA prevents a Party from applying measures to regulate the entry of natural persons of the other Party, including measures to protect the integrity of and to ensure the orderly movement of natural persons across its borders, provided they do not impair the benefits accruing to the other Party under the chapter.
5.137
Granting temporary entry to a natural person of the other Party does not exempt that person from meeting the required licensing or other requirements to practice a profession or otherwise engage in business activities.
Processing of applications
5.138
Each Party is required to expeditiously process complete applications, extensions, or renewals, and is to endeavour to provide information concerning the status of the application. If requested, a Party is required to provide reasons for a refusal or denial of visa.
5.139
Each Party is to ensure that fees charged for processing applications are reasonable, and do not unduly impair or delay trade in goods, services, or investment activities under the AI-ECTA.
5.140
Other provisions deal with equivalence in paper and electronic applications, and authenticated documents.
Transparency
5.141
Each Party is to make available information relating to its current requirements for the temporary entry of natural persons covered by this chapter, and to update this information when required. Article 9.5 specifies the minimum information to be published, where applicable.
5.142
Parties are to ensure that the information published or made publicly available is updated as soon as possible, and Parties are to maintain appropriate mechanisms to respond to enquiries.
Dispute settlement
5.143
Parties are to endeavour to settle difference arising from the implementation of the chapter through consultations.
5.144
Neither Party would have recourse to dispute settlement under Chapter 13 (dispute settlement) regarding a refusal to grant temporary entry unless:
the matter involves a pattern of practice
the natural person affected has exhausted all available administrative remedies regarding the particular matter.
Schedules
5.145
As discussed above, the categories of natural persons to which the temporary movement for natural persons provisions apply are established in each Party’s schedule to Annex 9A. The categories within which the Parties have made commitments are: business visitors; installers and servicers; intra-corporate transferees; independent executives (Australia only); independent professionals (India only); contractual service suppliers; and spouses and dependents. Australia’s schedule contains an appendix that stipulates further conditions on contractual service suppliers.
5.146
The following summarises the key aspects of the undertakings made by each Party. While there are some differences, the schedules are broadly similar in coverage, though both are subject to the laws and regulations of each Party, which have not been examined in detail here.
Business visitors
Australia
5.147
Definition—natural persons seeking to travel to Australia for business purposes whose remuneration and financial support for the duration of the visit must be derived from sources outside Australia, and who must not engage in making direct sales to the general public or in supplying the goods or services themselves.
5.148
Stay—varies from 3 to 12 months depending on type of visitor.
India
5.149
Definition—natural persons seeking to travel to India for business
purposes whose remuneration and financial support for the duration of the visit must be derived from sources outside India, and who must not engage in making direct sales to the general public or in supplying the goods or services themselves.
5.150
Stay—not more than 180 days, may be extended at the discretion of India and subject to its laws.
Installers and servicers
Australia
5.151
Definition—a natural person who is an installer or servicer of machinery or equipment, where such installation or servicing by the supplying enterprise is a condition of purchase under contract of the said machinery or equipment. An installer or servicer must abide by Australian workplace standards and conditions and must not perform services which are not related to the service activity which is the subject of the contract.
5.152
Stay—maximum of three months.
India
5.153
Definition—a natural person who is an installer and servicer of Australia and otherwise meets its criteria for the grant of an immigration visa.
5.154
Stay—three months or the period of the contract, whichever is less.
Intra-corporate transferees
Australia
5.155
Definition—a natural person employed by an enterprise of India established and lawfully and actively operating in Australia, who is transferred to fill a position in the parent, branch, subsidiary, or affiliate of that enterprise in Australia, and who is an executive or senior manager, or a specialist. May require labour market testing.
5.156
Stay—up to four years, may be extended.
India
5.157
Definition—a natural person of Australia within the categories of employees listed in Schedule 9A who are in the employment of a juridical person of Australia and being transferred temporarily to a branch, a representative office or a juridical person owned or controlled by the aforesaid juridical person in the context of provision of a service in India, such as managers, executives, or specialists.
5.158
Stay—initial period of one year or the contract length, whichever is less. Extension may be granted on a year-to-year basis for a total not exceeding five years.
Independent executives
Australia
5.159
Definition—natural persons whose work responsibilities match the description set out in the schedule and who intend, or are responsible, for the establishment in Australia of a new branch or subsidiary of an enterprise which has its head of operations in the territory of India and which has no other representative, branch or subsidiary in Australia.
5.160
Stay—not more than four years.
Independent professionals
India
5.161
Definition—applies to two categories, which are limited to specific sectors:
Natural persons who travel to India temporarily in order to perform a service pursuant to a contract(s) between themselves and a client(s) located in India for which they possess the necessary qualifications and registration. Remuneration is to be paid solely to the natural person.
Natural persons who travel to India temporarily in order to fulfil qualification and licensing requirements where presence in India is an essential condition for the fulfilment of these requirements.
5.162
This category is limited to a list of 12 sectors (including accounting, engineering, computer, research and development, management consulting, hotel and restaurant, travel agency) and subject to any conditions contained in India’s Schedule of Specific Commitments to the services chapter (Annex 8E).
5.163
Stay—for an initial period of up to one year (may seek permission to extend for three months) or the period of the contract, whichever is less.
Contractual service suppliers
Australia
5.164
While the general definition is the broadly same, Australia makes specific commitments in the schedule, then additional, more specific commitments in certain sectors and subsectors in an appendix to its schedule.
5.165
Definition—natural persons with trade, technical or professional skills and experience who are assessed as having the necessary qualifications, skills and work experience accepted as meeting the domestic standard in Australia for their nominated occupation, and who are either:
a.
employees of an enterprise of India that has concluded a contract for the supply of a service within Australia and that does not have a commercial presence within Australia
b.
engaged by an enterprise lawfully and actively operating in Australia to supply a service under a contract within Australia.
5.166
Stay under the schedule—up to four years, may be extended. Subject to employer sponsorship, including eligible occupations, and may be subject to labour market testing. Australia’s schedule allows temporary entry and temporary stay to be granted for up to a combined total of 1,800 per year of qualified, professional Indian traditional chefs and yoga instructors entering as contractual service suppliers of India.
5.167
In its appendix, which applies to natural persons of India, Australia distinguishes between the categories of persons in paragraphs 5.165(a) and (b) above, and specifies a range of sectors for each (Table A and Table B, respectively). In these sectors, the appendix applies additional contract length, employment, education, licencing, qualification and experience requirements, in addition to remuneration requirements and limitations on the number of persons who may be covered by a service contract. Australia’s commitments on spouses and dependents do not apply with respect to this category. Although they are not the same, overall the sectors listed in Australia’s appendix are similar to those listed in India’s schedule for contractual service suppliers.
5.168
Stay under appendix—cumulative period of not more than six months in any 12-month period or for the duration of the service contract, whichever is less.
India
5.169
Definition—employees of juridical persons who are either:
employees of an Australia-based company or partnership who travel to India temporarily to perform a service pursuant to a contract between their employer and a client(s) located in India
employees of an Australia-based company or partnership who travel to India temporarily to fulfil qualification and licensing requirements where presence in India is an essential condition for the fulfilment of these requirements.
5.170
The contract must be obtained in one of the 27 listed sectors (including engineering, accounting, computer, research and development, management consulting, insurance, advertising, mining consulting, environmental, maintenance and repair, translation and interpretation).
5.171
Stay—for an initial period of up to one year or the period of the contract, whichever is less.
Spouses and dependents
Australia
5.172
Definition—for a natural person of India who has been granted temporary entry and temporary stay, or an extension of temporary stay, for a period of 12 months or longer (subject to listed commitments) and who has a spouse or dependant. Upon application, Australia would grant the accompanying spouse or dependant the right of entry and temporary stay, movement and work.
5.173
Stay—equal period to that of the accompanied natural person.
India
5.174
Definition—for a natural person of Australia who has been granted temporary entry and temporary stay, or an extension in temporary stay (subject to listed commitments), the accompanying spouse and dependents of that natural person would be accorded temporary entry and temporary stay, provided that the stay in India of that natural person is for a period of 12 months or longer. Working rights would be subject to relevant laws.
5.175
Stay—equal period to that of the accompanied natural person.
Side letters
5.176
The AI-ECTA also contains two side letters outlining mutual understandings on post-study work, and work and holiday visas.
Post-study work visa
5.177
In the side letter, initiated by Australia, Australia undertakes to maintain specific opportunities for former students to live, study and work in Australia temporarily after finishing their studies. India agrees to provide a work-based immigration route with reciprocal eligibility and duration.
Table 5.3: Post-study work visa - qualification and length of stay
|
|
|
|
Diploma or trade qualifications
|
Up to 18 months
|
|
Bachelor degree (including honours)
|
Up to 2 years
|
|
Masters by research/ coursework
|
Up to 3 years
|
|
Doctoral degrees
|
Up to 4 years
|
|
For Indian students graduating in Australia with bachelor degrees in science, technology, engineering or mathematics (STEM) fields (including information communications technology) with first class honours
|
Extension of 12 months: up to 3 years
|
Source: AI-ECTA side letters on post-study work visas.
5.178
Post-study work visa commitments are to be implemented within one year of EIF of the AI-ECTA.
Support for STEM provisions
5.179
The Group of Eight supported the measure allowing Indian students who graduate with first class honours in STEM to stay for up to three years as it is consistent with Australia’s history of supporting skills exchange between our two nations, and is needed to address skills gaps in the Australian workforce.
Work and holiday visa
5.180
In order to promote youth mobility and strengthen people-to-people ties, Australia undertakes to implement a work and holiday arrangement for Indian citizens who wish to broaden their professional or cultural horizons.
5.181
In effect, Australia undertakes to open the existing ‘First Work and Holiday (subclass 462) visa’ to up to 1,000 Indian citizens annually. Indian citizens are not currently eligible for this visa (28 countries are currently eligible).
5.182
The arrangement is not immediately reciprocal. If India implements a similar youth mobility program in the future with any country, it undertakes to extend the opportunity to participate to Australian citizens.