Australia signs historic trade deal with India to eliminate tariffs on local goods

Australia has signed a historic trade deal with India that will eliminate $12.6bn worth of tariffs each year on local goods like wine, produce and sheep meat.

India has agreed to slash tariffs on Australian sheep meat, wool, and wine under a historic trade agreement to be inked on Saturday by the prime ministers of both countries in a virtual signing ceremony.

Under the deal tariffs of 30 per cent will also be eliminated over the next seven years on avocados, onions, broad, kidney and adzuki beans, cherries, shelled pistachios, macadamias, cashews in-shell, blueberries, raspberries, blackberries and currants.

The deal will see tariffs eliminated on more than 85 per cent of Australia’s exports to India while 96 per cent of Indian goods imports will enter Australia, duty-free.

Australia will also grant visas to 1000 young Indian working holiday-makers each year.

Prime Minister Scott Morrison said the Australia-India Economic Cooperation and Trade Agreement (AI ECTA) would create enormous trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8 billion each year.

“This agreement opens a big door into the world’s fastest growing major economy for Australian farmers, manufacturers, producers and so many more,” he said.

Prime Minister Scott Morrison has agreed to a trade deal with India. Picture: NCA NewsWire/Christian Gilles

“By unlocking the huge market of around 1.4 billion consumers in India, we are strengthening the economy and growing jobs right here at home.

“This is great news for lobster fishers in Tasmania, wine producers in South Australia, macadamia farmers in Queensland, critical minerals miners in Western Australia, lamb farmers from New South Wales, wool producers from Victoria and metallic ore producers from the Northern Territory.”

Under the AI ECTA sheep meat tariffs of 30 per cent will be eliminated while the 2.5 per cent tariff on entry for wool will also disappear.

Tariffs on wine with a minimum import price of US$5 per bottle will be cut immediately on entry from 150 per cent to 100 per cent and then down to 50 per cent over the next 10 years.

Wine with minimum import price of US$15 per bottle will be cut from 150 per cent to 75 per cent on entry immediately and eventually to 25 per cent over the next 10 years.

Tariffs on almonds, lentils, oranges, mandarins, pears, apricots and strawberries will also be reduced, improving opportunities for Australia’s horticulture industry to supply India’s growing food demand.

Australia’s resources sector will also benefit with the elimination of tariffs for coal, alumina, metallic ores, including manganese, copper and nickel; and critical minerals including titanium and zirconium.

Tariffs on pharmaceuticals and certain medical devices will be eliminated over five and seven years.

Trade, Tourism and Investment Minister Dan Tehan said the deal would also further strengthen the people-to-people links between our countries.

“This agreement will turbocharge our close, longstanding and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism,” he said.

“It will create new opportunities for jobs and businesses in both countries, while laying the foundations for a full free trade agreement.”

Originally published as Australia signs historic trade deal with India to eliminate tariffs on local goods