On 22 November Australia’s Parliament ratified an Economic Cooperation and Trade Agreement (ECTA) with India. This was long in the making; Australia has been working on a trade agreement with India since 2011. Due to divergent positions, negotiations stalled but resumed again in 2021. The ECTA, now likely to launch in January, is not a full Free Trade Agreement (FTA) but an interim arrangement preceding one.
According to Frances Lisson, Chief Negotiator on the Australia-India ECTA and FTA, the Indian business community is excited about the Australian market. Australian exports to India include basic commodities, coal, alumina, gold and liquefied natural gas, as well as wine and grains. Australian education and services are also important sectors for the Indian market. In return, Australia imports fabric, pillows, cushions, jewellery, toys and some pharmaceutical products.
The ECTA will eliminate tariffs on more than 85 per cent of Australian exports to India (valued at $14.8 billion a year), rising to 90 per cent in the next ten years. Australian goods qualifying for duty free entry to India include sheep meat, wool, alumina and copper. Notably, the ECTA also includes a most favoured nation clause for Australian wine exports. Current 150% tariffs on wine will be reduced to between 25%-50% over the next decade. Similarly, tariffs on Australian fruits, vegetables, nuts and seafood will also be reduced or eliminated altogether over time.
India became an increasingly important market for Australia since its relationship with China has deteriorated. Although there are signs of a détente, following a meeting between Prime Minister Anthony Albanese and Chinese President Xi Xinping on the sidelines of the G20 Summit in Bali, it will take some time for the relationship to stabilise.
Meanwhile, India’s economy is forecast to grow by 6.8 – 7.1 per cent in 2022/2023, in spite of current global uncertainties. Two-way trade in goods and services between Australia and India increased from $13.6 billion in 2007 to $24.3 billion in 2020 (making India Australia’s seventh largest trading partner). And trade between the two countries is expected to grow to $45 – 50 billion over the next five years.
To help the South Australian business community benefit from opportunities provided by the ECTA, the South Australian Business Chamber, in partnership with the Australia India Business Council, is hosting ‘Discover Export Opportunities with India’, a lunch event detailing Australia’s trade with India, which will take place on Wednesday, 7 December 2022, 11:45am – 2:30pm in the Gilbert Suite at the Adelaide Convention Centre.
Experts including Frances Lisson, Chief Negotiator for a FTA with India at the Department of Foreign Affairs and Trade and Jodi McKay, Chair of the Australia India Business Council, will provide a comprehensive overview of this agreement. Four South Australian companies will also discuss their experiences on exporting to India and outline what the ECTA could mean for exports going forward.
