India and Australia are set to sign an interim trade deal on Saturday whereby exporters of the former from over 6,000 broad sectors, including textiles, leather, furniture, jewellery and machinery, will get duty free access in the Australian market immediately. Commerce minister Piyush Goyal and Australia’s trade minister Dan Tehan will address a press conference on the day at 9:45 am, after both the countries sign the the India-Australia Economic Cooperation and Trade Agreement in presence of Prime Minister Narendra Modi and the Prime Minister of Australia Scott Morrison.
“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,” the commerce ministry said on Friday in a press release.
After the pact gets approval from the Union Cabinet in India and the Australian Parliament, it will come into effect from a mutually agreed date and on the very first day, “over 6,000 tariff lines would be available for Indian exporters at zero duty,” PTI reported quoting sources.
As per the report, the Scott Morrison-led country is offering new Delhi zero duty access on around 96.4 per cent value exports from the very first day of the agreement. Previously, these items, which are several in number, attracted 4-5 per cent duty. Australia trades in about 6,500 tariff lines while India has over 11,500 tariff lines.
This agreement is immensely beneficial for India as it mainly imports raw materials and intermediate goods from Australia, the sources added. On the other hand, India will be offering zero duty access in over 70 per cent of its tariff lines for Australia which will include products like coal. Coal accounts for about 74 per cent of imports from Australia and currently, it attracts 2.5 per cent duty.
It is learnt that these concessions would be provided on Australian wines under two categories based on price range. Once the pact is in force, the customs duty on the wines will reduce from 150 per cent to up to 25 per cent over a period of ten years. There will be eight chapters in the agreement — goods, services, rules of origin, Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), customs procedure and trade facilitation, legal and institutional issues and movement of natural persons, and trade remedies.
The interim deal will pave the way for a Comprehensive Economic Cooperation Agreement (CEPA) with Australia. It will be the second such pact after the one with United Arab Emirates (UAE), which was signed in February. Australia is the 17th largest trading partner of India and India is Australia’s 9th largest partner. Bilateral trade in goods and services stood at USD 27.5 billion in 2021.
(With PTI inputs)