Anthony Albanese government has welcomed confirmation that the Indian Government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA).
This trade agreement will deliver new market access opportunities for Australian businesses and consumers from 29 December 2022.
ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and businesses will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector.
Australia finalised its domestic requirements for the trade agreement last week with the unanimous passage of the Government’s Bills through Parliament.
Anthony Albanese MP, Prime Minister of Australia, observed:
“Australia and India are increasingly working together as strategic and economic partners. We elevated our relationship with India to a Strategic Partnership in 2009 and to a Comprehensive Strategic Partnership in 2020. 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.”
ECTA is a ground-breaking agreement that brings Australia and India’s economies closer together.
From 29 December, tariffs on 85 per cent of Australia’s exports to India will be eliminated and high tariffs on a further 5 per cent of goods will be phased down.
Entry into force of the agreement before the New Year delivers a double bonus of two tariff cuts in quick succession: one as the agreement comes into effect and a second on 1 January 2023.
Senator Don Farrell, Australia’s Minister for Trade and Tourism, noted:
“The ECTA’s two tariff cuts in quick succession intensify the up-front benefits of this agreement for our exporters. Businesses are encouraged to get on the front foot and prepare themselves now to take advantage of the substantial improvements in market access to India under the new agreement. Austrade can assist existing and potential exporters benefit from the lowering of trade barriers into the Indian market.”
The tariff commitments provided by India in the agreement will open up access for Australia’s exporters of products including critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheepmeat, horticulture and wine.
Australian service suppliers will benefit from full or partial access across more than 85 Indian service sectors and subsectors. Australian suppliers across 31 sectors and subsectors will be guaranteed the highest standard of treatment that India grants to any future free trade agreement partner.
Australian services sectors to benefit include higher education and adult education, as well as business services such as tax, architecture and urban planning.
ECTA will support tourism and workforce needs in regional Australia by making 1000 Work and Holiday Program places available to young adventurous Indians. It maintains opportunities for Indian students graduating in Australia to undertake post-study work, with a bonus year of stay for high-performing STEM graduates.
Australia and India are now progressing toward a Comprehensive Economic Cooperation Agreement to build on ECTA. The Australian Government is pursuing further opportunities in goods and services, in addition to new commitments in areas such as digital trade, government procurement, and new areas of cooperation.