New Delhi: India and Australia signed an agreement on Saturday economic cooperation and trade agreement Under which Canberra will provide duty free access to its market for over 6,000 broad sectors of India including textiles, leather, furniture, jewelery and machinery.
The agreement is likely to come into force in about four months.
The India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) was signed by Commerce and Industry Minister Piyush Goyal and Australian Trade, Tourism and Investment Minister Dan Tehan in the presence of Prime Minister Narendra Modi and his Australian counterpart in a virtual ceremony. Scott Morrison.
Goyal said the agreement will help increase bilateral trade from $27.5 billion to $45-50 billion in the next five years.
He further said that this agreement will contribute to huge employment generation which is estimated to be around 10 lakhs in the next 5-7 years as labor intensive sectors are likely to benefit the most.
Under the agreement, Australia is offering zero duty access to India for about 96.4 per cent of exports (by value) from day one. This includes a number of products that currently attract 4-5 per cent customs duty in Australia.
Labor-intensive sectors include textiles and apparel, some agricultural and fish products, leather, footwear, furniture, sporting goods, jewellery, machinery, electrical goods and railway wagons.
On the very first day of the entry into force of the agreement, more than 6,000 tariff lines will be available at zero duty for Indian exporters.
Australia trades in about 6,500 tariff lines, while India has over 11,500 tariff lines.
As Australian exports are more concentrated in raw materials and intermediates, many industries in India will find cheaper raw materials which will make them competitive, particularly in sectors such as steel, aluminum and fabrics/textiles.
To protect sensitive areas, India has a number of goods in the exclusion category in which no duty concessions will be granted on Australian imports.
Such goods include milk and other dairy products, toys, sunflower, seed oil, walnuts, pistachios, platinum, wheat, rice, millet, apples, sugar, oil cakes, gold, silver, chickpeas, jewellery, iron ore and most Medicine will be included. Device.
The agreement will also have a security mechanism that will include strict rules of origin to prevent any routing of products from any third country; safeguard mechanism to deal with any unusual surge in imports; and similar norms for the steel sector.
For the pharma segment, the agreement will provide fast-track approvals and fast-track quality assessment/inspection of manufacturing facilities.
In the service sector, benefits for India include work visas for Indian students after 2-4 years of study on a reciprocal basis; and work and holiday visa arrangements for young professionals, Goyal said.
“The post-study work visa will provide expanded options to eligible Indian graduates, postgraduates and STEM (Science, Technology, Engineering and Mathematics) specialists to work in Australia,” he said, adding that currently, more than 1 lakh Indian students are enrolled. in various courses in Australia.
He said Australia has agreed to address the issue of double taxation being faced by domestic IT companies in that market.
Canberra has also agreed to amend its domestic tax law to prevent taxation on offshore income of Indian firms providing technical services in Australia.
India, on the other hand, will offer zero duty access to Australia for over 85 per cent of its tariff lines which will include products such as coal, sheep meat, wool, LNG, coal, alumina, metal ore, manganese, copper and nickel. , Titanium and Zirconium.
Coal accounts for about 74 per cent of Australia’s imports and currently attracts a 2.5 per cent duty. About 73 per cent of coking coal, which is used by most steel companies, is imported from Australia. India also imports thermal coal from that country.
India will also provide duty concessions to Australian wines in a phased manner over a period of 10 years. Concessions will be provided on Australian wines based on prices.
The duty on liquor with a minimum import price of USD 5 per bottle will be reduced from 150 per cent to 100 per cent upon the implementation of the deal and subsequently to 50 per cent over 10 years.
Similarly, duty on bottles with a minimum import price of USD 15 will be reduced from 150 per cent to 75 per cent and subsequently to 25 per cent over 10 years.
According to a statement by the Australian Trade Ministry, up to 30 per cent duty on avocados, onions, peeled pistachios, cashews, blueberries, raspberries and blackberries will end in seven years.
“The duty on pharmaceutical products and certain medical devices will be phased out in five and seven years,” it said. “The 30 per cent duty on lamb meat will end when implemented, giving a boost to Australian exports, which already account for about 20 per cent of India’s market.”
Tehan said the agreement would create new opportunities for jobs and businesses in the two countries, laying the foundation for a full-fledged free trade agreement.
Both countries will facilitate the recognition of professional qualifications, licensing and registration processes between professional service bodies.
The agreement will have eight chapters – goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures and trade facilitation, legal and institutional issues and movement of natural persons, and trade remedies.
The interim deal will pave the way for a Comprehensive Economic Cooperation Agreement (CEPA) with Australia. This will be the second such agreement with the United Arab Emirates (UAE), which was signed in February.
Australia is India’s 17th largest trading partner, while New Delhi is Canberra’s 9th largest. India’s merchandise exports stood at USD 6.9 billion and imports rose to USD 15.1 billion in 2021.
The agreement is likely to come into force in about four months.
The India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) was signed by Commerce and Industry Minister Piyush Goyal and Australian Trade, Tourism and Investment Minister Dan Tehan in the presence of Prime Minister Narendra Modi and his Australian counterpart in a virtual ceremony. Scott Morrison.
Goyal said the agreement will help increase bilateral trade from $27.5 billion to $45-50 billion in the next five years.
He further said that this agreement will contribute to huge employment generation which is estimated to be around 10 lakhs in the next 5-7 years as labor intensive sectors are likely to benefit the most.
Under the agreement, Australia is offering zero duty access to India for about 96.4 per cent of exports (by value) from day one. This includes a number of products that currently attract 4-5 per cent customs duty in Australia.
Labor-intensive sectors include textiles and apparel, some agricultural and fish products, leather, footwear, furniture, sporting goods, jewellery, machinery, electrical goods and railway wagons.
On the very first day of the entry into force of the agreement, more than 6,000 tariff lines will be available at zero duty for Indian exporters.
Australia trades in about 6,500 tariff lines, while India has over 11,500 tariff lines.
As Australian exports are more concentrated in raw materials and intermediates, many industries in India will find cheaper raw materials which will make them competitive, particularly in sectors such as steel, aluminum and fabrics/textiles.
To protect sensitive areas, India has a number of goods in the exclusion category in which no duty concessions will be granted on Australian imports.
Such goods include milk and other dairy products, toys, sunflower, seed oil, walnuts, pistachios, platinum, wheat, rice, millet, apples, sugar, oil cakes, gold, silver, chickpeas, jewellery, iron ore and most Medicine will be included. Device.
The agreement will also have a security mechanism that will include strict rules of origin to prevent any routing of products from any third country; safeguard mechanism to deal with any unusual surge in imports; and similar norms for the steel sector.
For the pharma segment, the agreement will provide fast-track approvals and fast-track quality assessment/inspection of manufacturing facilities.
In the service sector, benefits for India include work visas for Indian students after 2-4 years of study on a reciprocal basis; and work and holiday visa arrangements for young professionals, Goyal said.
“The post-study work visa will provide expanded options to eligible Indian graduates, postgraduates and STEM (Science, Technology, Engineering and Mathematics) specialists to work in Australia,” he said, adding that currently, more than 1 lakh Indian students are enrolled. in various courses in Australia.
He said Australia has agreed to address the issue of double taxation being faced by domestic IT companies in that market.
Canberra has also agreed to amend its domestic tax law to prevent taxation on offshore income of Indian firms providing technical services in Australia.
India, on the other hand, will offer zero duty access to Australia for over 85 per cent of its tariff lines which will include products such as coal, sheep meat, wool, LNG, coal, alumina, metal ore, manganese, copper and nickel. , Titanium and Zirconium.
Coal accounts for about 74 per cent of Australia’s imports and currently attracts a 2.5 per cent duty. About 73 per cent of coking coal, which is used by most steel companies, is imported from Australia. India also imports thermal coal from that country.
India will also provide duty concessions to Australian wines in a phased manner over a period of 10 years. Concessions will be provided on Australian wines based on prices.
The duty on liquor with a minimum import price of USD 5 per bottle will be reduced from 150 per cent to 100 per cent upon the implementation of the deal and subsequently to 50 per cent over 10 years.
Similarly, duty on bottles with a minimum import price of USD 15 will be reduced from 150 per cent to 75 per cent and subsequently to 25 per cent over 10 years.
According to a statement by the Australian Trade Ministry, up to 30 per cent duty on avocados, onions, peeled pistachios, cashews, blueberries, raspberries and blackberries will end in seven years.
“The duty on pharmaceutical products and certain medical devices will be phased out in five and seven years,” it said. “The 30 per cent duty on lamb meat will end when implemented, giving a boost to Australian exports, which already account for about 20 per cent of India’s market.”
Tehan said the agreement would create new opportunities for jobs and businesses in the two countries, laying the foundation for a full-fledged free trade agreement.
Both countries will facilitate the recognition of professional qualifications, licensing and registration processes between professional service bodies.
The agreement will have eight chapters – goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures and trade facilitation, legal and institutional issues and movement of natural persons, and trade remedies.
The interim deal will pave the way for a Comprehensive Economic Cooperation Agreement (CEPA) with Australia. This will be the second such agreement with the United Arab Emirates (UAE), which was signed in February.
Australia is India’s 17th largest trading partner, while New Delhi is Canberra’s 9th largest. India’s merchandise exports stood at USD 6.9 billion and imports rose to USD 15.1 billion in 2021.