The agreement will come into force on a mutually agreed date after approval from the Union Cabinet in India and Parliament in Australia.
The agreement will come into force on a mutually agreed date after approval from the Union Cabinet in India and Parliament in Australia.
According to government sources, Indian exporters from over 6,000 wide sectors including textiles, leather, furniture, jewelery and machinery will get duty-free access to the Australian market soon after the interim trade agreement between the two countries comes into force.
Commerce and Industry Minister Piyush Goyal and his Australian counterpart Dan Tehan will sign the India-Australia Economic Cooperation and Trade Agreement on Saturday in a virtual ceremony in the presence of Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison.
The agreement, which covers trade in goods and services, is a “balanced and equitable” agreement and will further strengthen the already close and strategic ties between the countries, the commerce ministry said in a statement on Friday.
It will significantly increase bilateral trade in goods and services, create new employment opportunities, raise the standard of living and improve the general welfare of the people of both the countries.
The agreement will come into force on a mutually agreed date after approval from the Union Cabinet in India and Parliament in Australia.
Sources said over 6,000 tariff lines will be available at zero duty for Indian exporters on the very first day of the interim agreement coming into force.
Sources said Australia has been offering zero duty to India on around 96.4% of the value of exports since day one and this includes a number of products, which currently attract 4-5% customs duty in Australia.
Australia trades in about 6,500 tariff lines while India has over 11,500 tariff lines.
Labor intensive sectors include textiles and apparel, some agricultural and fish products, leather, footwear, furniture, sporting goods, jewellery, machinery, electrical goods, railway wagons, selected pharmaceutical products and medical equipment.
In order to protect the sensitive areas, there are many goods in the exclusion category in India in which no duty concession will be given. Sources said the agreement will have a safeguard mechanism to deal with any unusual jump in imports.
Such goods include milk and other dairy products, toys, sunflower seed oil, walnuts, pistachio nuts, platinum, wheat, rice, millet, apples, sugar, oil cakes, gold, silver, chickpeas, jewellery, iron ore and most medical Equipment will be included. ,
Sources also said that India will get liberal norms for over 100 service sub-sectors.
Sources said the agreement is highly beneficial for India as it mainly imports raw materials and intermediates from Australia.
India, on the other hand, would offer zero duty access to Australia in over 70% of its tariff lines which would include products such as coal. Coal accounts for about 74 percent of Australia’s imports and currently attracts a duty of 2.5%.
About 73% of coking coal, which is mostly used by steel players, is imported from Australia. India also imports thermal coal from that country.
India will also provide duty concessions to Australian wines in a phased manner over a period of ten years.
It is learned that these concessions will be provided on Australian wines under two categories based on the price range. Once the agreement is in force, the customs duty on wine will be reduced from 150% to 25% over a period of ten years.
The agreement will have eight chapters – 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 business solution.
The interim deal will pave the way for a Comprehensive Economic Cooperation Agreement (CEPA) with Australia. This will be the second such agreement with the United Arab Emirates (UAE), which was signed in February.
Australia is India’s 17th largest trading partner and India is Australia’s 9th largest trading partner. Bilateral trade in goods and services stood at $27.5 billion in 2021.
India’s merchandise exports in 2021 were $6.9 billion and imports totaled $15.1 billion.
Major exports by India to Australia include petroleum products, textiles and apparel, engineering goods, leather, chemicals and gems and jewellery.
Imports mainly consist of raw materials, minerals and intermediates.
Mr. Goyal will be visiting Australia next week.