Australia’s new free trade deal with India to come into effect from December 29
The deal will mean tariffs on 85% of Australian exports to India will be eliminated and a separate category of local exports (5%) will have costs revised down.
Changes to domestic laws in India will mean a new free trade deal with Australia will come into effect by the end of next month.
The Australia-India Economic Cooperation and Trade Agreement (ECTA) will commence from 29 December. It will see two tariff cuts made in quick succession, one as the agreement comes into effect and another from the new year.
The deal will mean tariffs on 85% of Australian exports to India will be eliminated and a separate category of local exports (5%) will have costs revised down.
Prime minister Anthony Albanese said in a statement that both Australia and India were building their partnership on economic and strategic fronts.
“We elevated our relationship with India to a Strategic Partnership in 2009 and to a Comprehensive Strategic Partnership in 2020,” the PM said.
“The Australia-India Economic Cooperation and Trade Agreement is the next step in elevating our relationship with India, the world’s fastest-growing large economy.”
According to the Australian government, the agreement will shave $2 billion worth of tariffs for exporters annually. Businesses importing finished goods, and inputs to Australia’s manufacturing sector will benefit from $500 million in import tariffs.
India’s tariff commitments in the agreement will open up access for the import of Australian critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheep meat, horticulture and wine.
Australian suppliers across 31 sectors and subsectors will also be afforded the highest standard of treatment under the ECTA that India grants to any future partner under a similar agreement.
Trade minister Don Farrell urged local businesses to start preparing for what he called “substantial improvements” in access to the Indian market. More information about market access outcomes could be found on the FTA Portal, he added.
“Austrade can assist existing and potential exporters benefit from the lowering of trade barriers into the Indian market,” Farrell said.
The government also hopes the ECTA will buoy Australia’s regional tourism and workforce needs, creating 1,000 new places for work and holiday program participants for young Indians.
Under the agreement, there will be more opportunities for Indian students who have graduated from a local university and want to continue post-study work. High-performing STEM graduates will also be eligible for a “bonus year” to stay on and work in Australia.
The range of domestic service suppliers who will gain full or partial access across more than 85 Indian services sectors and subsectors include higher education and adult education, as well as business services such as tax, architecture and urban planning.
Both nations have committed to progressing a comprehensive economic cooperation agreement to build on ECTA, and Australia has flagged further goods and services opportunities are being explored with commitments in the areas of digital trade, government procurement, and new areas of cooperation.
This article was first published by The Mandarin.
