India and Australia will sign an interim trade agreement on Saturday where exporters of the former from over 6,000 wide sectors, including textiles, leather, furniture, jewelery and machinery, will have duty-free access to the Australian market immediately. Trade Minister Piyush Goyal and Australian Trade Minister Dan Tehan will speak at a press conference on the day at 9:45 a.m., after both countries signed the India-Australia Economic Cooperation and Trade Agreement in the presence of Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison.
“IndAus ECTA, which covers trade in goods and services, is a balanced and fair trade agreement, which will further cement the already deep, close and strategic relations between the two countries and will significantly improve bilateral trade in goods and services, create “new employment opportunities, raising the standard of living and improving the general welfare of the peoples of the two countries,” the Ministry of Trade said in a press release on Friday.
Following the approval of the Pact by the Union Cabinet in India and the Australian Parliament, it will enter into force from a mutually agreed date and on the very first day “over 6,000 customs lines would be available to Indian exporters at zero duty”, PTI reported citing sources .
According to the report, the Scott Morrison-led country New Delhi offers zero tariff access of about 96.4 percent value exports from the very first day of the agreement. Previously, these objects, which are several in number, were charged 4-5 percent duty. Australia trades around 6,500 customs lines while India has over 11,500 customs lines.
This agreement is extremely beneficial for India as it mainly imports raw materials and intermediates from Australia, the sources added. On the other hand, India will offer duty-free access to over 70% of its customs lines for Australia, which will include products such as coal. Coal accounts for about 74 percent of imports from Australia and currently has a tariff of 2.5 percent.
It is known that these concessions would be granted on Australian wines under two categories based on price range. Once the pact enters into force, the duty on the wines will be reduced from 150 percent to up to 25 percent over a ten-year period. There will be eight chapters in the agreement – goods, services, rules of origin, sanitary and phytosanitary measures (SPS), technical barriers to trade (TBT), customs procedures and trade facilitation, legal and institutional issues and the mobility of natural persons, and trade remedies.
The Interim Agreement will pave the way for a comprehensive Economic Cooperation Agreement (CEPA) with Australia. It will be the second such pact after the one with the United Arab Emirates (UAE), which was signed in February. Australia is India’s 17th largest trading partner and India is Australia’s ninth largest partner. Bilateral trade in goods and services amounted to $ 27.5 billion in 2021.
(With PTI inputs)
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