The agreement between Australia and India will increase the share of Australian exports covered by free trade agreements. It was 27 percent when the coalition took power in 2013 and is now at 75 percent, but can reach 88 percent when the Indian and European Union agreements have been completed.
According to the agreement, 30% sheepmeat tariffs will be eliminated, which will increase Australian exports, which already have almost 20% of the Indian market. Wool will also have its current tariffs of 2.5 percent eliminated, making exports cheaper in Australia’s second largest market for wool products.
Duties on wine will be reduced immediately and then further for 10 years, while tariffs on a range of fruits, vegetables and nuts will be phased out or reduced.
Australian coal, gas, copper and critical minerals will be duty free.
In 2020, India was Australia’s seventh largest trading partner, with two-way trade valued at $ 24.3 billion and the sixth largest export market for goods and services, valued at $ 16.9 billion. The government wants to lift India to the top three export markets by 2035.
Mr Tehan said Australian service providers in higher education, business services, research and development and many others would benefit from the deal as they will be guaranteed the best treatment from India that it provides to all future FTAs. India was Australia’s third largest market for services exports by 2020.
“This agreement will turbo-charge our close, long-term and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism,” Tehan said.
Australia will also provide new access for young Indians to take part in working weekends in Australia. Places in Australia’s Work and Holiday program will be set at 1,000 per year, which the government expects to contribute to the pool of available workers and increase tourism.
Labor spokeswoman Madeleine King recently accused the government of “laziness” over the length of time it has taken to sign the agreement. Labor has not always supported free trade agreements, often due to concerns about access to the labor market for foreign workers, but has been keen to conclude an agreement with India.