The Economic Cooperation and Trade Agreement (ECTA) between Australia and India has now been in force for a year. Negotiations have resumed for the more ambitious Comprehensive Economic Cooperation Agreement (CECA), which will build upon ECTA outcomes to capitalise on the potential for closer economic ties between Australia and India.
From 01 January 2024, Australian exports to India will be even more competitive, with more tariff cuts on high quality Australian products such as seafood, cherries, sandalwood and wine. A media statement has been released by Trade Minister Don Farrell within the last few days, under the heading: India trade deal a win for Australian exporters, cost of living relief and jobs.
He points out that in the first year since the government brought the Australia-India free trade agreement into force, “trade with one of the world’s fastest growing economies has surged.” Agricultural exports to India are 50% higher. This includes massive boosts in products like sheep meat, seafood, broad beans, citrus and almonds.
Most of our industrial exports to India are up by around 30%, with pharmaceuticals, wood and paper and cochlear implants leading the charge.
From January to September 2023, Australian Businesses claimed lower tariffs on $15.2 billion worth of exports to India.
At the same time, Australian businesses and households have saved over $145 million in duties on goods imported from India, on things like clothing, household linen, automotive and electrical parts.
The agreement has also helped ease supply-chain stresses for Australia’s manufacturing, resource and construction industries, by improving access to inputs such as tubes, pipes and off-road dump trucks.
Australia and India are now working to conclude our next trade agreement, an ambitious Comprehensive Economic Cooperation Agreement (CECA). This comprehensive trade agreement would allow us to go further in areas such as digital trade, and deliver commercially meaningful new market access for our exporters, Mr Farrell says.
The synopsis of an article carried by The Economic Times in India on 30 December is that India “may sign a comprehensive trade deal with Australia after the general elections next year, as Canberra seeks access to India’s agriculture market.”
Their report includes the opinion that, “The government is reluctant to commit anything involving the agriculture sector. General elections are also around the corner,” said an official, adding that several countries are seeking commitments in the agri sector such as the UK and the EU.
India’s exports to Australia rose 14% in April-November FY23, while imports fell 19%. This is the result of ECTA being in force for a year. India’s trade deficit with Australia shrank 39% in the first eight months of the fiscal year at $5.27 billion- from $8 billion in the previous year.
Under the ECTA India eliminated duties on avocados, certain peas and beans, onions, leeks, asparagus and cherries, among others. However, Australia is seeking more access to the Indian agricultural market and is pushing for a deeper access in the wine segment.
The Australian Border Force (ABF) has information on free trade with India (here).
Also see our related article: Customs Tariff Changes 01 January 2024
For more information about global trade and shipping – whether with India or elsewhere around the globe – contact us here at Colless Young. As licensed Customs Brokers and Freight Forwarders we offer correct, professional advice on all your import and export transactions. We are based in Brisbane and provide a complete range of logistics services, both airfreight and sea cargo, through all Australian ports and airports.
