Australia and India sign historic trade agreement which will ‘underpin the economic stability of the Indo-Pacific’
Prime Minister Modi and Australian Prime Minister Scott Morrison address the virtual ceremony of the India-Australia Economic Cooperation and Trade Agreement on 2 April 2022 | Twitter/@PiyushGoyal
Australia and India have come together to ink a historic trade deal which will deepen the ties between the two nations, create new opportunities for workers and businesses and “underpin the economic stability of the Indo-Pacific”.
Trade Minister Dan Tehan signed the Australia-India Economic Cooperation and Trade Agreement during a virtual ceremony with his Indian counterpart Piyush Goyal and Prime Ministers Scott Morrison and Narendra Modi on Saturday afternoon.
The deal will eliminate tariffs on more than 85 per cent of Australian goods exports to India – which are valued at more than $12.6 billion a year – and benefit local households and businesses with 96 per cent of Indian goods imports entering Australia duty-free on entry into force.
India was Australia’s seventh largest trading partner in 2020, with two-way trade valued at $24.3 billion, but the federal government hopes to lift its partner into the top three by 2035.
The Morrison government said the benefits of AI ECTA include:
- Sheep meat tariffs of 30 per cent will be eliminated on entry into force, providing a boost for Australian exports that already command nearly 20 per cent of India’s market
- Wool will have the current 2.5 per cent tariffs eliminated on entry into force, supporting Australia’s second-largest market for wool products.
- Tariffs on wine with a minimum import price of US$5 per bottle will be reduced from 150 per cent to 100 per cent on entry into force and subsequently to 50 per cent over 10 years (based on Indian wholesale price index for wine).
- Tariffs on wine bottles with minimum import price of US$15 will be reduced from 150 per cent to 75 per cent on entry into force and subsequently to 25 per cent over 10 years (based on Indian wholesale price index for wine).
- Tariffs up to 30 per cent on avocados, onions, broad, kidney and adzuki beans, cherries, shelled pistachios, macadamias, cashews in-shell, blueberries, raspberries, blackberries, currants will be eliminated over seven years.
- Tariffs on almonds, lentils, oranges, mandarins, pears, apricots and strawberries will be reduced, improving opportunities for Australia’s horticulture industry to supply India’s growing food demand.
- The resources sector will benefit from the elimination of tariffs on entry into force for coal, alumina, metallic ores, including manganese, copper and nickel; and critical minerals including titanium and zirconium.
- LNG tariffs will be bound at 0 per cent at entry into force.
- Tariffs on pharmaceutical products and certain medical devices will be eliminated over five and seven years.
