The Australia-India deal will lift the percentage of Australian exports covered by free trade deals. It was 27 per cent when the Coalition took power in 2013 and is now at 75 per cent, but could hit 88 per cent once the Indian and European Union deals are concluded.
Under the deal, sheep meat tariffs of 30 per cent will be eliminated, boosting Australian exports that already command nearly 20 per cent of the Indian market. Wool will also have its current 2.5 per cent tariffs eliminated, making exports cheaper in Australia’s second-largest market for wool products.
Tariffs on wine will be cut immediately and then further reduced over 10 years, while tariffs on a series of fruits, vegetables and nuts will be gradually eliminated or reduced.
Australian coal, gas, copper and critical minerals will be tariff-free.
In 2020, India was Australia’s seventh-largest trading partner, with two-way trade valued at $24.3 billion, and the sixth-largest goods and services export market, valued at $16.9 billion. The government wants to lift India into the top three export markets by 2035.
Mr Tehan said Australian services suppliers in higher education, business services, research and development, and many others would benefit from the deal as they will be guaranteed to get the best treatment from India that it gives any future free trade agreement partner. India was Australia’s third-largest market for services exports in 2020.
“This agreement will turbocharge our close, long-standing and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism,” Mr Tehan said.
Australia will also provide new access for young Indians to participate in working holidays in Australia. Places in Australia’s Work and Holiday program will be set at 1000 per year, which the government expects to contribute to the pool of available workers and boost tourism.
Labor’s trade spokeswoman Madeleine King recently accused the government of “laziness” over the length of time it has taken to sign the deal. Labor has not always supported free trade deals, often due to concerns about access to the labour market for foreign workers, but has been keen to tie down an agreement with India.