India trade deal a step closer for Aussie exporters

Parliament looks set to ratify an interim free trade agreement with India this week. Here’s who’s set to benefit.

Australia looks set to legislate a preliminary free-trade agreement with India this week.

On Friday, a joint parliamentary committee recommended the federal government ratify the Australia-India Economic Cooperation and Trade Agreement, which is considered a precursor to a fully fledged free-trade agreement.

The deal will pave the way for 85 per cent of Australian goods to enter India tariff free, including seafood products, some processed wheat, cereal and grain products, milk powder for infant use, cherries, shelled macadamia and pistachio nuts and avocados.

Apricots and strawberries would see a tariff reduction from 30 per cent to 15 per cent over seven years.

But India has deemed milk and dairy products, chick peas, walnuts, pistachio nuts, wheat, rice, apples, sugar and sunflower seed oil as “sensitive products” and are excluded from any gains.

Work on a free-trade agreement with India has been underway since 2011. PICTURE: ALAMY

Australia exported $13.2 billion in goods to India in 2021-21, making the nation of 1.4 billion people our sixth largest export market.

Treaties committee chair and federal Labor MP Josh Wilson described the deal as an “early harvest agreement” that underachieved in areas of potential and immediate interest to Australia, such as wine.

The Department of Agriculture has also acknowledged its shortcomings.

“India made commitments that it wanted to make and it certainly carved out some of the more-sensitive agriculture products,” it said in a submission on the AI-ECTA, adding Australia would pursue further liberalisation for goods including dairy, grains and horticulture in an eventual comprehensive free trade agreement.

But Australian Grape and Wine chief executive Lee McLean said any deal with India was an opportunity for the industry.

“While India is a really challenging place to do business — it has high tariffs of 150 per cent upon entry, significant regulatory divergence between states, and state taxes and charges — it’s clear, in my opinion at least, that the opportunities presented by India, if we can get the right sort of economic and regulatory settings in place, are really significant,” he said in a submission.

The India and UK free trade deals will enter into force 30 days after ratification in each country.