India trade barriers hurting Australian farmers, Simon Birmingham says

Trade Minister Simon Birmingham has urged India to open up its agricultural markets.

Minister for Trade Senator Simon Birmingham at Parliament House in Canberra. Picture: Kym Smith

Trade Minister Simon Birmingham has urged India to open up its agricultural markets, saying its trade barriers to protect small farmers are stifling progress and hurting Australian producers.

Ahead of Scott Morrison’s visit to India in January, Senator Birmingham said Australia was “concerned about the impact of India’s agricultural trade settings on Australia’s agricultural sector and on global markets”.

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He said Indian tariffs had decreased Australian exports of pulses to the country from $1.4bn in 2017 to just $31 million last year – a 98 per cent fall in just two years.

“India’s trade restrictive agriculture policies have hit Australian industry hard, including on producers of grains and pulses, who face, for example, a 60 per cent tariff on chickpeas, and a 30 per cent tariff on lentils,” Senator Birmingham told the Australia India Business Council.

“The Government is also deeply concerned with India’s sugar subsidies, that are vastly in excess of its limits under WTO rules.

“They have contributed to a decrease in the global price of sugar which is hurting our Australian producers and those elsewhere.”

In a speech on Monday night, Senator Birmingham said Australia would continue to press India to remove sugar subsidies ahead of a WTO ruling on the matter.

He said Australia understood India had a vast number of small farmers who lacked the scale to increase productivity.

“Nevertheless, reform in these areas is important – for continued progress and modernisation in India, as well as for our Australian industry,” Senator Birmingham said.

“As a result, we continue to urge the Indian Government to reform its agricultural policies across all sectors to be more sustainable and consistent with its WTO obligations.”

Senator Birmingham said Australia respected India’s recent decision to stay out of the Regional Comprehensive Economic Partnership trade deal, which its Prime Minister Narendra Modi made to protect farmers and small businesses from cheap imports.

But he urged India to reconsider, saying the now 15-nation RCEP deal would be much better with India in it.

“It would give India a chance to help shape Indo-Pacific trade architecture, rules and standards in ways that will support India’s growth in the years ahead,” he said.

Mr Morrison hopes to seal a range of agreements with Mr Modi during his January visit, including deals for co-operation in the Chinese-dominated sectors of critical technologies and minerals.

The Prime Minister told the Lowy Institute last month that India was “a natural partner for Australia”, and referred to its “shared values” — a point of differentiation with China.

Former prime minister Tony Abbott said in India last week that it could be “the next China” in terms of its economic importance to Australia.

Former Department of Foreign Affairs and Trade secretary Peter Varghese says there is “no market over the next 20 years which offers more growth opportunities for Australian business than India”.

But he says India, the world’s largest democracy, lacks the ability to direct its economy and allocate resources they way China can, so is unlikely to be the “next China”.