The Minister for Trade Don Farrell issued a media release jointly with the Prime Minister yesterday (30 November) confirming that the Indian Government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA). This trade agreement will deliver new market access opportunities for Australian businesses and consumers from 29 December 2022.
As we anticipated in our report last week, Australia has finalised its domestic requirements for the trade agreement with the unanimous passage of the Government’s Bills through both houses of Parliament.
Senator Farrell’s statement highlights that entry into force of the agreement before the New Year delivers a double bonus of two tariff cuts in quick succession: one as the agreement comes into effect – and a second on 01 January 2023.
From 29 December, tariffs on 85% of Australia’s exports to India will be eliminated and high tariffs on a further 5% of goods will be phased down.
ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and business will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector.
The tariff commitments provided by India in the agreement will open up access for Australia’s exporters of products including critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheepmeat, horticulture and wine. It will substantially reduce its 150% tariff on wine valued at over $US5 per bottle.
Australian service suppliers will benefit from full or partial access across more than 85 Indian services sectors and subsectors. Australian suppliers across 31 sectors and subsectors will be guaranteed the highest standard of treatment that India grants to any future free trade agreement partner.
Australia and India are now progressing a Comprehensive Economic Cooperation Agreement to build on ECTA. The Australian Government is pursuing further opportunities in goods and services, in addition to new commitments in areas such as digital trade, government procurement, and new areas of cooperation.
Quote attributable to the Hon Anthony Albanese MP, Prime Minister of Australia:
“The Australia-India Economic Cooperation and Trade Agreement is the next step in elevating our relationship with India, the world’s fastest growing large economy.”
Quotes attributable to the Minister for Trade and Tourism, Senator the Hon Don Farrell:
“The ECTA’s two tariff cuts in quick succession intensify the up-front benefits of this agreement for our exporters.
“Businesses are encouraged to get on the front foot and prepare themselves now to take advantage of the substantial improvements in market access to India under the new agreement.”
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