After UAE, India to sign interim trade agreement with Australia tomorrow

After United Arab Emirates (UAE), India will sign the economic cooperation and trade agreement with Australia tomorrow, a Ministry of Commerce and Industry Press release said on Friday.

"Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Government of India and Dan Tehan, the Minister for Trade, Tourism and Investment, Government of Australia, will sign the India-Australia Economic Cooperation and Trade Agreement ("IndAus ECTA") in a virtual ceremony, in the presence of Prime Minister of India, Narendra Modi and Prime Minister of Australia, H.E. Scott Morrison tomorrow," the Press release said.

Indian exporters from leather, textiles, jewellery and machinery industries, will get duty free access to the Australian market immediately after the interim trade agreement between the two countries comes into force, according to government sources.

The pact will come into force at a mutually agreed date once it gets approval from the Union Cabinet in India and the Parliament in Australia.

The sources said that on the very first day of the implementation of the interim pact, over 6,000 tariff lines would be available for Indian exporters at zero duty.

"Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening relationship between the two countries. The IndAus ECTA, encompassing trade in goods and services, is a balanced and equitable trade agreement, which will further cement the already deep, close and strategic relations between the two countries and will significantly enhance the bilateral trade in goods and services, create new employment opportunities, raise living standards and improve the general welfare of the peoples of the two countries," the press release said.

Australia is offering zero duty access to India on about 96.4 per cent value of exports from day one and this covers products, which currently attract 4-5 per cent customs duty in Australia, the sources said.

Australia trades in about 6,500 tariff lines while India has over 11,500 tariff lines.

Labour-intensive sectors which would gain immensely, include textiles and apparel, footwear, furniture, sports goods, jewellery, machinery, electrical goods, railway wagons, selected pharmaceutical products and medical devices.

To safeguard sensitive sectors, India has several goods in the exclusion category in which no duty concessions will be accorded. The agreement will have a safeguard mechanism to deal with any unusual surge in imports, the sources said.

Such goods will include milk and other dairy products.

India will get liberalised norms for over 100 services sub-sectors. This agreement is beneficial for India as it mainly imports raw materials and intermediate goods from Australia, the sources added.

On the other hand, India will be offering zero duty access in over 70 per cent of its tariff lines for Australia which will include products like coal. Coal accounts for about 74 per cent of imports from Australia and currently, it attracts a 2.5 per cent duty.

India will also provide duty concessions to Australian wines in a phased manner over a period of ten years.

It is learnt that these concessions would be provided on Australian wines under two categories based on price range. Once the pact is in force, the customs duty on the wines will reduce from 150 per cent to up to 25 per cent over a period of ten years.

The interim deal will pave the way for a Comprehensive Economic Cooperation Agreement (CEPA) with Australia. It will be the second such pact after the one with United Arab Emirates (UAE), which was signed in February.

( With inputs from ANI )

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