While speaking to ABC Radio National on Monday, Australian Minister for Trade, Tourism, and Investment Dan Tehan said Australia could finalise a free trade deal with India by the end of this week, after multiple rounds of negotiations over the past ten years.
“These are tough discussions and obviously in the end we’ve got to make sure it is in our national interest and… in India’s national interest. My hope would be we would have something by the end of this week or early next week,” Tehan said.
Tehan also mentioned that he has been speaking with his Indian counterpart Piyush Goyal at least twice a day, noting that they are making valuable progress.
Speaking anonymously, an Indian source said, “The negotiations are at an advanced stage and the sides are hopeful of finalising them by March 21. It will also make way for a comprehensive free trade pact, the negotiations for which will begin after inking the early-harvest agreement.”
The trade deal, known as the ‘Australia-India Comprehensive Economic Cooperation Agreement,’ aims to boost cooperation and opportunities in tourism, energy, agriculture, education, and infrastructure. It would also grant Indian pharmaceutical companies more access to the Australian market and also include duty concessions on gems, jewellery, and textiles. In fact, India is also negotiating a ‘Mutual Recognition Agreement’ (MRA) for easier clearance of pharmaceutical products approved by developed countries.
Australian winemakers could also benefit from the deal by securing a tariff cut. “New Delhi may be willing to lower tariffs on Australian wines over a certain monetary threshold, as it will not affect low-cost Indian wines,” an Indian executive said. Currently, India imposes a 150% tariff on alcoholic beverages.
In 2020, the two-way trade of goods and services between India and Australia amounted to $24 billion, compared to $13.6 billion in 2007.
The first round of negotiations began in 2011 but talks were suspended in September 2015 while waiting for the outcomes of other multilateral negotiations. However, Tehan and Goyal formally re-launched negotiations in September 2021 and committed to concluding the deal, including finalising the interim agreement, by December 2021.
Union Commerce & Industry Minister @PiyushGoyal speaks of India's intention of signing an #FTA deal with #Australia soon; says negotiations are in very advanced stages with Australia
— ET NOW (@ETNOWlive) February 21, 2022
Listen in to his exclusive interaction with @This_khushboo @CimGOI @PiyushGoyalOffc #Trade pic.twitter.com/2oRanUZuGl
The deal is crucial for Australia amid its enduring trade, diplomatic, and strategic standoff with China. Relations between Australia and China reached an all-time low when Canberra called for an investigation into the origins of the COVID-19 pandemic. In addition, Canberra has abandoned Beijing’s ambitious Belt and Road Initiative (BRI), banned Chinese tech companies from its 5G network, condemned China over its human rights abuses in Xinjiang, questioned the legitimacy of its territorial claims in the South China Sea, and expanded its engagement in multilateral groupings such as the Quad. Furthermore, Australia entered into a trilateral military partnership, AUKUS, with the United Kingdom (UK) and the United States (US) to counter China’s growing influence in the Indo-Pacific region.
Opinion: Free trade talks between Australia and India are reportedly getting close to reaching an interim deal, but India-Australia FTA talks shouldn't be led by anti-China paranoia. https://t.co/pXoM83sHnE pic.twitter.com/cHODeeUrsO
— Global Times (@globaltimesnews) March 9, 2022
To retaliate, China also imposed tariffs on Australian exports and imposed anti-dumping duties on several Australian products, including wine, timber, cotton, barley, sugar, lobster, coal, and copper ore.
Apart from India, Australia is also negotiating an FTA with the European Union and the Gulf Cooperation Council. It has implemented FTAs with Peru, Hong Kong, and Indonesia in the last two years, while the FTA with the United Kingdom has not yet entered into force.
The announcement of the interim trade deal could be made during a meeting later this month between Australian Prime Minister Scott Morrison and his Indian counterpart Narendra Modi.