Kirsty Needham

SYDNEY (Reuters – Australia will sign a deal with India that will end tariffs on 85% Australian imports to India. It will allow farmers and miners in India to diversify their export markets.

The Australia-India Economic Cooperation and Trade Agreement will be signed on Saturday in a virtual ceremony by Trade Minister Dan Tehan and India’s Minister of Commerce & Industry, Piyush Goyal, Australia said in a statement in Friday night.

The signing of this interim agreement will be witnessed by Morrison and India’s Prime Minister Narendra Modi. Both countries are committed to pursuing a free and fair trade relationship.

Morrison will call an election in a matter of days. He wanted to make sure that India gets a trade agreement with India, 10 years after the first negotiations began between India and the United States.

Following diplomatic disputes that saw China sanction Australian goods including wine, lobster, coal and other products, the Australian government has been pushing to diversify its export markets.

He said that the deal with India would unlock a market for almost 1.4 million consumers, and strengthen Australia’s economic growth.

Morrison released a statement saying that the agreement “opens a large door to Australia’s fastest growing major economic sector for Australian farmers and producers,”

Over 85% of Australian goods exported to India by Australia will have their tariffs removed, amounting to A$12.6 billion. This figure is expected to rise to 91% within 10 years.

According to the agreement, 96% of Indian goods imported into Australia will be exempted from duty.

Fresh Australian rock lobster and sheep meat will no longer be subject to tariffs.

To boost Australia’s wine sector, the tariffs for wines valued above US$5 will drop from 15% to 50% to 10% over 10 years. For bottles worth more than US$5, it will fall to 25% to 25%.

Over seven years, tariffs on Australian agricultural products, including beans, avocados, nuts and berries, will be removed.

Dan Tehan, Trade Minister, stated that the agreement will boost crucial minerals trade, professional service trade and education, as well as lay the basis for full-free trade agreements.

Both countries will recognize each other’s professional licenses and qualifications. Australia will also extend visas to STEM students who have graduated in Australia with first-class honours.

In 2020, India was Australia’s seventh largest trading partner, with two-way trade valued at A$24.3 billion.

Morrison said that the agreement had been built upon our strong security partnership, our joint efforts at the Quad and has provided the chance for our economic relations to move to a higher level. He was referring to the security grouping consisting of India Australia the United States, Japan and Japan.

Australia exported A$19.3 billion worth of goods to India in 2021, representing 4.2% of Australia’s total exports.