Today, Australia’s trade agreement with India, the Economic Cooperation and Trade Agreement (ECTA) enters into force.
It is no surprise to me that India chose Australia as the first major economy in over a decade with which to complete a trade agreement. Indian consumers appreciate the high quality and assured safety of Australian products, and Indian students value the transformative opportunities our education system offers.
More broadly, our economic relationship is underpinned by a Comprehensive Strategic Partnership and Australia’s vibrant Indian diaspora, who are the living bridge between our two countries.
Trade diversification is a central plank of the Government’s trade policy strategy. And as I’ve said before, Australia is economically stronger when global trade flows freely. More trade is a key part of how we build the economic future Australia needs.
Deepening our trade and investment ties with India, one of the world’s fastest growing major economies, strengthens our economic resilience.
India’s youthful population, diversified economy and growth trajectory present significant opportunities for Australian businesses, including in education, agriculture, energy, resources, tourism, healthcare, financial services, infrastructure, science and innovation and sport.
As a result of the trade deal, over 85 per cent of Australian trade exports to India now enter duty free. This will rise to 90 per cent in the coming years. In addition, India’s high tariffs will be substantially reduced for sensitive products such as wine and almonds.
Entry into force this year means Australian exporters will benefit from two tariff cuts in quick succession. The first tariff cut takes place today upon entry into force, and the second on the annual set date of 1 January – and annually thereafter.
Australian businesses are very much alive to the enormous trade diversification opportunities in an export market valued at over $24 billion in 2021.
WA’s largest lobster exporter, Geraldton Fishermen’s Cooperative, has now secured a distributor in India in anticipation of ECTA’s entry into force. ECTA secured elimination of India’s 30 per cent tariff on fresh rock lobster from day one, and phased elimination of the 30 per cent tariff on frozen rock lobster by 1 January 2028.
The immediate elimination of India’s 30 per cent tariff on lamb and mutton will allow the Australian sheepmeat industry to benefit from the anticipated growth in demand in India for high quality lamb and mutton. Roger Fletcher from Fletcher International Exports said ECTA will enable the Australian supply chain to match specific sheepmeat cuts with market segments and cuisines in India, and thereby help diversify export markets.
From today tariffs on premium wine to India are slashed by half from 150 per cent to 75 per cent, dropping to 70 per cent in a few days’ time on 1 January 2023, and will phase down to 25 per cent over nine years. South Australian wine producer Torbreck Vintners welcomed the instant competitive advantage these tariff cuts offer Australian premium wine producers. Australian wine will also receive further tariff cuts should India provide improved access to our competitors.
Australian services suppliers have also gained greater access and certainty in the Indian market. They will receive the best treatment India provides to other trade partners in future agreements, meaning the access we have will only improve.
There will be an estimated 1.8 million Indian students studying overseas by 2024. ECTA has expanded opportunities for Indian students graduating in Australia to undertake post-study work, with a bonus year of stay for high-performing STEM graduates. Australia’s largest student recruitment marketplace, Global Study Partners, is set to double its on-the-ground staff in India, in hopes of capturing the new interest in Australia generated by these outcomes.
This agreement will also support tourism and workforce needs in regional Australia by making 1,000 Work and Holiday Program places available to India.
I see significant potential for greater exchange of ideas and talent as our people-to-people links continue to grow. This will be supported by a framework under the agreement which will facilitate discussions on the mutual recognition of qualifications, licensing and registration procedures across professional services and regulated or licensed occupations.
There is no single country with more growth opportunities for Australian business to 2035 than India.
The Albanese Government is now powering ahead on negotiating an ambitious Comprehensive Economic Cooperation Agreement with India, which will build on the outcomes already achieved, and further deepen our economic relationship with this key regional partner.
This article was originally published in The Australian on 29 December, 2022.