It is a historic day as the Australia-India Economic Cooperation and Trade Agreement (ECTA) enters into force. ECTA underscores both governments’ commitment to delivering opportunities to diversify trade that are commercially meaningful for businesses.
Today Australian businesses have greater access to the Indian market of 1.4 billion people, and one of the world’s fastest-growing major economies. A serious window of opportunity has opened for exporters to move into an export market valued at over $24 billion in 2021.
Entry into force this year means Australian exporters will benefit from two tariff cuts in quick succession, the first takes place today and the second, on 1 January 2023.
Minister for Trade and Tourism, Senator Don Farrell says “Australia and India are natural trading partners – this agreement will unlock the enormous potential in our trading relationship.”
“This agreement reflects the Government’s commitment to diversifying exports and strengthening our partnerships.”
“ECTA’s entry into force today opens up the world’s largest democracy, with nearly one and a half billion people, to Australian exporters – early entry into force sees Australian exporters receive a tariff cut today, followed by another on 1 January 2023,”added Minister Farrell.
Effective today, tariffs on over 85 per cent of Australian exports to India have been eliminated and locked in at zero. This includes key exports such as wool, lamb, barley, oats, fresh rock lobsters, cosmetics and many metallic ores, critical minerals, non-ferrous metals and titanium dioxide.
Tariffs on a further 5 per cent of exports, including macadamia nuts, avocados, berries, seafood, pharmaceuticals, cochlear implants, vitamins, infant formula, breakfast cereals, pasta, sandalwood chips, pumps and fillers, excavating machinery parts and lifting machinery for mines, are lower today and will be phased down to zero within 6 years.
National Chair of the Australian India Business Council, Jodi McKay also welcomed the finalisation of the Australia-India Economic Cooperation and Trade Agreement (ECTA) as a “watershed moment” in the history of the economic and commercial relationship between the two nations.
“Australia is well ahead of the game when it comes to trade with India and we are the envy of many other economies like the UK.
“This will be looked back on as a momentous day with the social and cultural ties between our two nations now joined by a special trade relationship,”Ms McKay said.
Australian producers of premium wine, lentils, almonds, oranges and strawberries are now receiving significant reductions to high Indian tariffs.
“The Agreement also opens up opportunities for 1,000 Indian students to come to Australia to undertake post-study work with a bonus year for high-performing STEM students, said Ms McKay.
Australian services suppliers are gaining full or partial market access across 85 sectors and subsectors including distribution, financial and telecommunications services. In 31 sectors and subsectors.
Australia will also get the best treatment afforded by India to its future trade agreement partners. This will benefit suppliers of higher and adult education, business services, research and development, construction and engineering services, tourism and travel.
Importantly, the trade agreement will support tourism and workforce needs in regional Australia by making 1,000 Work and Holiday Program places available to young Indian travellers.
Business Consulting firm Newland Global Group’s Executive Director Natasha Jha say, “We are working with multiple stakeholders to explain the AI ECTA in a simplified version including Trade in Goods and Services, Tariff Schedules, Trade Remedies, Rules of Origin, Customs Procedures, and Trade Facilitation.
“AI-ECTA offers Australian businesses the first-mover advantage across various sectors in a large growing aspirational economy. We have that unique expertise to unlock Key resources to access and important terms to Know for potential exporters,”said Ms Jha
India is Australia’s sixth-largest trading partner and our fourth-largest export market.
Minister Farell says we are pursuing further competitive advantages to expand this trade relationship through an ambitious Comprehensive Economic Cooperation Agreement (CECA). CECA will address deeper market access and outcomes in new areas including digital trade, government procurement and cooperation.
“Australian businesses can look to DFAT’s Free Trade Agreement Portal and Guide to using ECTA to export and import goods to seize these new opportunities.”