27 May 2022 16:22
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Historic India-Australia Economic Cooperation and Trade Agreement-“IndAus ECTA’ inked, here’ details

Indian International Students visa will be extended from two to three years post-study in Science, Technology, Engineering or Mathematics (STEM) and information and communications technology (ICT) sectors and 1000/year working holiday visas will be granted.

Australia today signed a historic trade agreement with India, the Australia-India Economic Cooperation and Trade Agreement (“IndAus ECTA”), that will further strengthen the relationship between both countries while making Australian exports to India cheaper and creating huge new opportunities for workers and businesses.

The “IndAus ECTA” was signed by Australia’s Minister for Trade, Tourism and Investment, Dan Tehan and Piyush Goyal, Indian Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles in a virtual ceremony, in the presence of Prime Minister Scott Morrison and Indian Prime Minister Narendra Modi.

This agreement will turbocharge our close, long-standing and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism.”

said Minister Tehan

Both countries will facilitate the recognition of professional qualifications, licensing, and registration procedures between professional services bodies in both countries.

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Australian services suppliers in 31 sectors and sub-sectors will be guaranteed to receive the best treatment accorded by India to any future free trade agreement partner, including in higher education and adult education; business services (tax, medical and dental, architectural and urban planning; research and development; communication, construction and engineering; insurance and banking; hospital; audio-visual; and tourism and travel.

Australia will provide new access for young Indians to participate in working holidays in Australia.

Places in Australia’s Work and Holiday program will be set at 1,000 per year and Australia will have two years to implement the outcome.

This is expected to contribute to both workforce requirements and boost tourism to support Australia’s post-COVID recovery.

In a boost to our STEM and IT workforces,

The length of stay for an Indian Student with a bachelor’s degree with first-class honours will be extended from two to three years post-study in Science, Technology, Engineering or Mathematics (STEM) and information and communications technology (ICT) sectors.

Speaking after the signing, Prime Minister Morrison noted the remarkable scale of cooperation between the two countries in recent years and thanked Indian Prime Minister Narendra Modi for his leadership.

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Calling the signing of IndAus ECTA, another milestone in the growing relationship between India and Australia, Prime Minister Morrison said that the agreement further develops on the promise of the relationship.

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“Apart from increased trade and economic cooperation, IndAus ECTA will further deepen the warm and close ties between the people of the two countries by expanding work, study and travel opportunities,” said Prime Minister Morrison,

“It will send a powerful signal to our businesses that ‘one of the biggest doors’ is now open as two dynamic regional economies and like-minded democracies are working together for mutual benefit,”

said PM Morrison.
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It also delivers a clear message that democracies are working together and ensuring the security and resilience of supply chains, Mr Morrison added.

Indian Prime Minister Narendra Modi noted that this is his third interaction with his Australian counterpart in the last one month. He conveyed his appreciation for the leadership of Prime Minister Morrison and the efforts of his Trade Envoy and former Prime Minister of Australia Mr Tony Abbott. He also commended the Trade Ministers and their team for a successful and effective engagement.

PM Modi said that the signing of IndAus ECTA in such a short span of time reflects the depth of the mutual confidence between the two countries. Mr Modi underlined the huge potential that exists in the two economies to fulfil the needs of each other and this agreement will enable the two countries to fully leverage these opportunities. “This is a watershed moment for our bilateral relations”, he emphasised.

“On the basis of this agreement, together, we will be able to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region,”

said PM Modi.
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Terming ‘people to people’ relations as the key pillar of the relationship between India and Australia, Prime Minister Modi said.

“This agreement will facilitate the exchange of students, professionals, and tourists between us, which will further strengthen these relations.”The Prime Minister also conveyed his wishes to the women’s cricket team of Australia for the upcoming World Cup final.”

Australian and Indian Ministers also expressed their views on the growing strength of the relationship between the two countries before signing the agreement.

Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening relationship between the two countries.

The IndAus ECTA, encompassing trade in goods and services, is a balanced and equitable trade agreement, which will further cement the already deep, close and strategic relations between the two countries and will significantly enhance the bilateral trade in goods and services, create new employment opportunities, raise living standards and improve the general welfare of the peoples of the two countries.

What is India-Australia Economic Cooperation and Trade Agreement-“IndAus ECTA’

Tariffs:
They 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.

Australian households and businesses will also benefit, with 96 per cent of Indian goods imports entering Australia duty-free on entry into force.

India is the world’s largest democracy and the world’s fastest-growing major economy, with GDP projected to grow at nine per cent in 2021-22 and 2022-23 and 7.1 per cent in 2023-24.

In 2020, India was Australia’s seventh-largest trading partner, with two-way trade valued at $24.3 billion, and the sixth-largest goods and services export market, valued at $16.9 billion.

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Australia’s goal is to lift India into its top three export markets by 2035 and to make India the third-largest destination in Asia for outward Australian investment.

Prime Minister Scott Morrison said the agreement would create enormous trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8 billion each year.

“This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more,”

Prime Minister Morrison said. 

“By unlocking the huge market of around 1.4 billion consumers in India, we are strengthening the economy and growing jobs right here at home.

“This is great news for lobster fishers in Tasmania, wine producers in South Australia, macadamia” farmers in Queensland, critical minerals miners in Western Australia, lamb farmers from New South Wales, wool producers from Victoria and metallic ore producers from the Northern Territory.”

said Mr Morrison
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This is how Indian Australian business leaders responded to the trade deal.

Benefits of IndAus ECTA to Australia 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 the Indian wholesale price index for wine).

·         Tariffs on wine bottles with a 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 the 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.

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·         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.

Australia and India have also agreed to undertake cooperation to promote agricultural trade as part of the agreement and will now work towards concluding an enhanced agricultural Memorandum of Understanding (MoU).

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Mr Tehan today signed AI ECTA on behalf of Australia during a virtual ceremony with India’s Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles, Piyush Goyal, attended by Prime Ministers Scott Morrison and Narendra Modi.

Today’s announcement builds on the Morrison Government’s $280 million investment to further grow our economic relationship and support jobs and businesses in both countries, which includes:

·         $35.7 million to support cooperation on research, production and commercialisation of clean technologies, critical minerals and energy;

·         $25.2 million to deepen space cooperation with India and

·         $28.1 million to launch a Centre for Australia-India Relations.

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IndAus ECTA will support goods exporters by eliminating and reducing tariffs and removing red tape that slows trade down. Australia exported $19.3 billion worth of goods to India in 2021, representing 4.2 per cent of Australia’s total exports.

Statewise be benefits:

NSW

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years. Top New South Wales exports that will benefit include sheep meat, wine, malt, certain nuts, wool, coal, copper ores and concentrates and certain pharmaceutical products. 

In 31 sectors and subsectors, including banking and insurance, higher and adult education, hospital, medical and dental services, agriculture-related services, and key business services including architecture, urban planning and engineering, New South Wales services firms are guaranteed the best access India offers in the future to any other country.

New South Wales skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced opportunities to live and work temporarily in India

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years.

Sheep meat tariffs will be eliminated at entry into force:

  • New South Wales exported 128,000 tonnes of sheep meat in 2021, 27% of the national total, worth $1.2 billion.
  • Improved market access will allow Australian sheep meat to be more competitive with the 30% elimination in duties.

Wine tariffs will be reduced over 10 years for bottles over a price of US$5 and US$15 dollars:

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  • Australia exported $2.1 billion worth of wine in 2021.
  • New South Wales was Australia’s second largest exporter with $476 million, 22% of the total.
  • Over the period 2018 to 2020, India imported on average $87 million of wine, Australia being the first supplier with 25% of market share followed by Singapore and France with 19% each.

Wool tariffs will be eliminated on entry into force:

  • Australia represents 57% of wool imports in India.
  • New South Wales was Australia’s second largest exporter to the world with $646 million in 2021, 21% of the total.

Coal tariffs will be eliminated on entry into force: 

  • Coal represents around 70% of total Australian exports to India, worth around $10 billion.
  • New South Wales was Australia’s second largest exporter to the world with $23 billion in 2021, 36% of the total.
  • Around a quarter of total Indian imports of coal comes from Australia.
  • India is Australia’s third market, representing around 16% of total exports of coal behind Japan (27%) and China (21%).

Petroleum oils tariffs will be eliminated over 5 years:

  • New South Wales was Australia’s largest exporter to the world with $1.8 billion, 59% of total.

Copper ores and concentrates tariffs will be eliminated on entry into force:

  • Australia represents around 10% of total Indian imports.
  • N New South Wales was Australia’s largest exporter to the world over 2018-20 with $2.7 billion, 42% of the total.

Pharmaceutical products tariffs will be eliminated over 5 years:

  • New South Wales was Australia’s second largest exporter to the world with $0.8 billion, 32% of total.

VICTORIA

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years. Top Victorian exports that will benefit include sheep meat, malt, wine, wool, petroleum oils, medicaments, lentils and almonds.

In 31 sectors and subsectors, including banking and insurance, higher and adult education, and key business services including architecture, urban planning and engineering, Victorian services firms are guaranteed the best access India offers in the future to any other country.

Victorian skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced commitments to live and work temporarily in India.

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years.

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Sheep meat tariffs will be eliminated at entry into force: 

  • Victoria exported 211,000 tonnes of sheep meat in 2021, 45% of the national total, worth $1.8 billion.
  • Improved market access will allow Australian sheep meat to be more competitive with the 30% elimination in duties.

Wine tariffs will be reduced over 10 years for bottles over a price of US$5 and US$15 dollars:

  • Australia exported $2.1 billion worth of wine in 2021.
  • Victoria was Australia’s third largest exporter with $249 million.
  • Over the period 2018 to 2020, India imported on average $87 million of wine, Australia being the first supplier with 25% of market share followed by Singapore and France with 19% each.

Hides and skin tariffs will be eliminated on entry into force with raw hides and skin tariffs bound at 0% on entry into force.

  • Australia exported $648 million worth of hides and skin in 2021.
  • Victoria was Australia’s largest exporter to the world with $336 million in 2021, 52% of the total.

Wool tariffs will be eliminated on entry into force: 

  • Australia represents 57% of wool imports in India.
  • Victoria was the Australia’s largest exporter to the world with $1.6 billion in 2021, 53% of the total.

Petroleum oils tariffs will be eliminated over 5 years:

  • Victoria was Australia’s second largest exporter to the world with $760 million, 25% of total.

Pharmaceutical products tariffs will be eliminated over 5 years:

  • Victoria was Australia’s largest exporter to the world with $1.3 billion, 52% of total.

Lentils 

  • 50% tariff reduction for in-quota exports for lentils with a permanent quota of 150,000 tonnes per year.
  • Out of quota tariffs will remain at most favoured nation.
  • Victoria was Australia’s second largest exporter to the world with $278 million, 42% of total.
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Almonds are the largest nut exports, worth $600 million in 2021. Outcome is:

  • 50% tariff reduction for in-quota exports for almonds with a permanent quota of 34,000 tonnes per year.
  • Out of quota tariffs will remain at most favoured nation.
  • Victoria was Australia’s largest exporter to the world with $427 million, 71% of total.

Western Australia

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years. Top Western Australian exports that will benefit include wine, barley and rock lobster. 

In 31 sectors and subsectors, including higher and adult education, scientific and technical consulting, construction, tourism and travel, Western Australian services firms are guaranteed the best access India offers in the future to any other country.

Western Australian skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced commitments to live and work temporarily in India.

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years

Sheep meat tariffs will be eliminated at entry into force: 

  • Western Australia exported 64,000 tonnes of sheep meat in 2021, 14% of the national total, worth $575 million.
  • Improved market access will allow Australian sheep meat to be more competitive with the 30% elimination in duties.

Wine tariffs will be reduced over 10 years for bottles over a price of US$5 and US$15 dollars:

  • Australia exported $2.1 billion worth of wine in 2021.
  • Western Australia was Australia’s fourth largest exporter with $34 million.
  • Over the period 2018 to 2020, India imported on average $87 million of wine, Australia being the largest supplier with 25% of market share followed by Singapore and France with 19% each.

Wool tariffs will be eliminated on entry into force:

  • Australia represents 57% of wool imports in India.
  • Western Australia was Australia’s third largest exporter to the world with $634 million in 2021, 21% of the total.

Barley and oats tariffs will be bound to 0% on entry into force:

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  • Australia exported $2.7 billion worth of barley and $156 million of oats in 2021.
  • Western Australia was Australia’s largest exporter of barley with $1.2 billion (44% of the total) and oats with $130 million (83% of total) in 2021.
  • Australia represents 82% of oats imports in India.

Rock lobster tariffs will be eliminated on entry into force:

  • Australia exported $344 million worth of rock lobsters in 2021. 
  • Western Australia was Australia’s largest exporter to the world with $212 million in 2021, 63% of the total.

Titanium dioxide tariffs will be eliminated on entry into force. 

  • Australia exported $784 million worth of titanium dioxide in 2021 and Western Australia was the largest exporter with 99.8%.

Metallic ores tariffs will be eliminated on entry into force for copper, alumina, titanium, zirconium and manganese.

South Australia

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years. Top South Australian exports that will benefit include sheep meat, wine, lentils and almonds. 

In 31 sectors and subsectors, including higher and adult education, hospital, medical and dental services, tourism and travel, and key business services including architecture, urban planning and engineering, South Australian services firms are guaranteed the best access India offers in the future to any other country.

South Australian skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced commitments to live and work temporarily in India.

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years

Sheep meat tariffs will be eliminated at entry into force:

  • SA exported 56,000 tonnes of sheep meat in 2021, 12% of the national total, worth $574 million.
  • Improved market access will allow Australian sheep meat to be more competitive with the 30% elimination in duties.

Wine tariffs will be reduced over 10 years for bottles over a price of US$5 and US$15 dollars:

  • Australia exported $2.1 billion worth of wine in 2021.
  • SA was Australia’s largest exporter with $1.3 billion, 60% of the total.
  • Over the period 2018 to 2020, India imported on average $87 million of wine, Australia being the largest supplier with 25% of market share followed by Singapore and France with 19% each.

Lentils 

  • 50 percent tariff reduction for in-quota exports for lentils with a permanent quota of 150,000 tonnes per year.
  • Out of quota tariffs will remain at most favoured nation.
  • South Australia was Australia’s largest exporter to the world with $385 million, 58% of total.

Almonds are the largest nut exports, worth $600 million in 2021:

  • 50 percent tariff reduction for in-quota exports for almonds with a permanent quota of 34,000 tonnes per year.
  • Out of quota tariffs will remain at most favoured nation.
  • South Australia was Australia’s second largest exporter to the world with $164 million, 27% of total.
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Tasmania

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years.  Top Tasmanian exports that will benefit include sheep meat, wine, cherries, and wool.

In 31 sectors and subsectors, including higher and adult education, hospital, medical and dental services, tourism and travel, and key business services including architecture, urban planning and engineering, Tasmanian services firms are guaranteed the best access India offers in the future to any other country.

Tasmanian skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced commitments to live and work temporarily in India.

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years

Sheep meat tariffs will be eliminated at entry into force:

  • Tasmania exported 2,800 tonnes of sheep meat in 2021, worth $23.5 million.
  • Improved market access will allow Australian sheep meat to be more competitive with the 30% elimination in duties.

Wine tariffs will be reduced over 10 years for bottles over a price of US$5 and US$15 dollars:

  • Australia exported $2.1 billion worth of wine in 2021.
  • Tasmania exported $6 million worth of wine in 2021.
  • Over the period 2018 to 2020, India imported on average $87 million of wine, Australia being the largest supplier with 25% of market share followed by Singapore and France with 19% each.

Fresh cherries (excluding sour cherries) tariffs will be eliminated over 7 years:

  • Australia exported $69 million worth of cherries in 2021.
  • Tasmania was Australia’s largest exporter to the world with $43 million in 2021, 61% of the total.

Wool tariffs will be eliminated on entry into force:

  • Australia represents 57% of wool imports in India and Tasmania exported $20.5 million globally in 2021.

Tin ores tariffs will be eliminated on entry into force:

  • Australia exported $329 million worth of tin ores in 2021, Tasmania representing almost all Australian exports to the world.

Queensland

Under the agreement, 85 per cent of Australian goods by value will enter India duty free and an additional 5 per cent will be reduced or eliminated over periods not exceeding 10 years. Top Queensland exports that will benefit include coal, certain nuts, hides and skin, bauxite and medicaments. 

In 31 sectors and subsectors, including banking and insurance, higher and adult education, hospital, medical and dental services, tourism and travel, and key business services including architecture, urban planning and engineering, Queensland services firms are guaranteed the best access India offers in the future to any other country.

Queensland skilled professionals will also benefit from a framework to support mutual recognition of professional qualifications, alongside enhanced opportunities to live and work temporarily in India.

Australia will permit 1,000 Indians per year to participate in the Work and Holiday Maker program, commencing within two years.

Coal tariffs will be eliminated on entry into force and over 5 years for bituminous coal: 

  • Coal represents around 70% of total Australian exports to India, worth around $10 billion.
  • Queensland was Australia’s largest exporter to the world with $34 billion in 2021, 55% of the total.
  • Around a quarter of total Indian imports of coal comes from Australia.
  • India is Australia’s third largest market, representing around 16% of total exports of coal behind Japan (27%) and China (21%).

Aluminium ores (bauxite) tariffs will be eliminated on entry into force:

  • Australia exported $1.3 billion worth of bauxite in 2021.
  • Queensland was Australia’s largest exporter to the world with $862 million in 2021, 69% of the total.

Macadamia nuts tariffs will be eliminated over 7 years:

  • Australia exported $317 million worth of macadamia nuts in 2021.
  • Queensland was Australia’s largest exporter to the world with $147 million in 2021, 47% of the total.

Hides and skin tariffs will be eliminated on entry into force with raw hides and skin tariffs bound at 0% on entry into force:

  • Australia exported $648 million worth of hides and skin in 2021.
  • Queensland was Australia’s third largest exporter to the world with $118 million in 2021, 18% of the total.
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