The Australia-India agreement will increase the percentage of Australian exports covered by free trade agreements. It was 27% when the Coalition took power in 2013 and is now at 75%, but could reach 88% once the Indian and European agreements are concluded.
As part of the deal, the 30% tariff on mutton will be lifted, boosting Australian exports which already account for almost 20% of the Indian market. Wool will also see its current 2.5% tariffs eliminated, making exports cheaper in Australia’s second largest market for wool products.
Tariffs on wine will be reduced immediately, then further reduced over 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 make India one of 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 would be assured of getting the best treatment. of India that it grants to any future free trade agreement partner. India was Australia’s third largest services export market in 2020.
“This agreement will boost our close, long-standing 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 a working holiday in Australia. The number of places in Australia’s Work and Holiday scheme will be set at 1,000 per year, which the government plans to contribute to the pool of available workers and boost tourism.
Labor union spokeswoman Madeleine King recently accused the government of “laziness” over the time it took to sign the deal. Labor has not always supported free trade agreements, often due to concerns over labor market access for foreign workers, but has been keen to strike a deal with India.