Australia enters into Economic Cooperation and Trade Agreement (ECTA) with India

In December 2022, the Australian Government entered into an Economic Cooperation and Trade Agreement (ECTA) with India’s Federal Government and highlighted the commitment of both countries to deliver opportunities to diverse trade that are commercially meaningful to Australian and Indian businesses. India, with a population of 1.4 billion people, is one of the world’s fastest growing major economies. It should be noted that India is Australia’s sixth-largest trading partner and Australia’s fourth-largest export market.

2023 has seen a roll out of various tariff cuts. Australian exporters have benefited from tariff cuts where tariffs have been eliminated in over 85% of Australian exports to India. This includes key exports such as wool, lamb, barely, oats, fresh rock lobsters, cosmetics and many metallic ores, critical minerals, non-ferrous metals and titanium dioxide. Tariffs on a further 5% of exports including macadamia nuts, avocado, berries, seafood, pharmaceuticals, cochlear implant, vitamins, infant formula, breakfast cereals, pasta, sandalwood chips, pumps and fillers, excavating machinery parts and lifting machinery for mines are also lower and will be phased down to zero in 6 years.

High tariffs have been substantially reduced on some agricultural products. Australia produces premium wine, lentils, almonds, oranges and strawberries and are now receiving significant reductions of high Indian tariffs. In addition, more than 90% of particular exports to India are now tariff free, rising within 2,4 or 6 years for an additional 5% of Australia’s exports. If you are importing goods into Australia and wish to seek an advanced ruling on a classification of a product, it’s possible to talk to the Australian Border Force (ABF) or a customs broker.

Australian manufacturers, processors and consumers will also benefit from the elimination of tariffs on the imports of Indian goods and inputs. Australian service suppliers are gaining full or partial market access across 85 sectors and sub-sectors including distribution, financial and telecommunication services. In 31 sectors and sub-sectors, Australia will also receive most favourable treatment offered by India to its future trade agreement partners. This will also benefit suppliers of higher and adult education, business services, research and development, construction and engineering services, tourism and travel.

ECTA will also support tourism and workforce needs in regional parts of Australia by making 1000 work and holiday program places available to young Indian travellers. ECTA is complimentary to the Australia/India comprehensive strategic partnership, the Federal Government’s implementation of the Update to the India Economic Strategy and joint efforts of Australia and India in the Quad and Indo Pacific Economic Framework, to tackle climate change and security challenges.

To complement the Federal ECTA, the Queensland State Government has also launched a Queensland India Trade and Investment Strategy 2023. This strategy is a landmark initiative by the Queensland government that highlights emerging opportunities for stronger bi-lateral trade between India and Queensland in key industry sectors such as energy, mining, education and health with a clear vision to create jobs, growth and opportunities in both markets.

Broadley Rees Hogan was pleased to sponsor the recent joint initiative of the Australia India Business Council (AIBC) and Trade and Investment Queensland (TIQ) which invited Queensland’s Senior Trade and Investment Commissioner, Abhinav Bhatia, to address business figures about the potential benefits of ECTA.

The Trade Commissioner provided valuable insight into the historic and projected economic growth in India and the increasing importance of India and Australia’s trade partnership. AIBC and TIQ have travelled to regional centres around Queensland, sharing information with businesses on the new opportunities that ECTA presents.

Please contact Jon Broadley for more information at jon.broadley@brhlawyers.com.au

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About Broadley Rees Hogan

AGA’s law firm member in Brisbane, Broadley Rees Hogan (BRH), has a well-resourced and diverse team of lawyers committed to providing technically excellent legal advice that is commercially relevant. They do so in a timely and cost-effective manner.

They are a mid-size legal practice which enables them to provide legal services often perceived as the province of larger firms. They are flexible in the delivery of those services whilst establishing and maintaining client relationships at a personal level.