India, Australia ink trade pact, Modi calls it 'historic moment'
Tariffs on goods of both countries to be removed or reduced
New Delhi: India and its Quad partner Australia inked a historic Free Trade Agreement (FTA) on Saturday called the “India-Australia Economic Cooperation and Trade Agreement" (ECTA) that was signed by commerce and industry minister Piyush Goyal and Australian trade minister Dan Tehan at a virtual ceremony in the presence of Prime Minister Narendra Modi and his Australian counterpart Scott Morrison. The ECTA will eliminate or reduce tariffs on goods of either country entering the other, making them cheaper and therefore much more competitively priced.
PM Modi said, "This is a watershed moment for our bilateral relations. 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... This agreement will facilitate the exchange of students, professionals, and tourists between us, which will further strengthen these relations.”
In a statement, New Delhi said, “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.”
In a statement, Australia said that the pact would make “Australian exports to India cheaper”, including sheep-meat and Australian wine and “96 per cent of Indian goods imports entering Australia duty-free”. Australia said “tariffs 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.”
Australia said, “Sheep meat tariffs of 30 per cent will be eliminated... 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 $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. Tariffs on wine bottles with a minimum import price of $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. 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. 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.”