India, Australia seal historic trade deal

Taking a major leap forward in their economic ties, India and Australia have signed a historic trade deal which envisages duty free access for over 95 per cent of Indian goods to Australia, including textiles, leather, jewellery and sports products. The India-Australia Economic Cooperation and Trade Agreement was signed by Commerce and Industry Minister Piyush Goyal and Australian Minister for Trade, Tourism and Investment Dan Tehan at a virtual ceremony, in the presence of Prime Minister Narendra Modi and his Australian counterpart Scott Morrison on April 2. Hailing the long-negotiated trade agreement, PM Modi said: “This is truly a watershed moment for India-Australia relations.” Mr Morrison underlined that the pact will further deepen Australia’s close ties with India. The agreement will help in taking bilateral trade from $27 billion to $45-50 billion in the next five years, said Mr Goyal. “AI ECTA would also further strengthen the people-to-people links between our countries,” said Mr Tehan. “This agreement will turbocharge our close, long-standing and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism,” Mr Tehan said. “It will create new opportunities for jobs and businesses in both countries, while laying the foundations for a full free trade agreement.” Under the agreement, the two countries will facilitate the recognition of professional qualifications, licensing, and registration procedures between professional services bodies in both countries. India was Australia’s third largest market for services exports in 2020. Australia is offering zero duty access to India for about 96.4 per cent of exports (by value) from day one. This covers many products which currently attract 4-5 per cent customs duty in Australia. Labour intensive sectors which would gain immensely include textiles and apparel, few agricultural and fish products, leather, footwear, furniture, sports goods, jewellery, machinery, electrical goods and railway wagons. Tariffs will be eliminated on more than 85 per cent of Australian goods exports to India (valued at more than $12.6 billion a year), rising to almost 91 per cent (valued at $13.4 billion) over 10 years.