The Australian government has welcomed the Australia-India Economic Cooperation and Trade Agreement (ECTA), which came into force starting today.
An official statement from the Australian side that the trade agreement underscores the commitment to delivering opportunities to diversify trade that are commercially meaningful for Australian businesses.
From today, Australian businesses will have greater access to the Indian market of 1.4 billion people, and one of the world's fastest-growing major economies.
"A serious window of opportunity has opened for our exporters to move into an export market valued at over USD 24 billion in 2021, ahead of many of our key competitors," read the statement.
"Entry into force this year means Australian exporters will benefit from two tariff cuts in quick succession, the first takes place today and the second, on 1 January 2023."
The statement added effective today it has eliminated tariffs on over 85 percent of Australian exports to India and locked them in at zero, which includes wool, lamb, barley, oats, fresh rock lobsters, cosmetics, and many metallic ores, critical minerals, non-ferrous metals, and titanium dioxide.
Tariffs on a further 5 per cent of exports, including macadamia nuts, avocados, berries, seafood, pharmaceuticals, cochlear implants, vitamins, infant formula, breakfast cereals, pasta, sandalwood chips, pumps and fillers, excavating machinery parts and lifting machinery for mines, are lower today and will be phased down to zero within 6 years.
In addition, Australian producers of premium wine, lentils, almonds, oranges, and strawberries are now receiving significant reductions to high Indian tariffs.
"Our manufacturers, processors and consumers will also benefit from the elimination of tariffs on imports of Indian goods and inputs," it said.
Australian services suppliers are gaining full or partial market access across 85 sectors and subsectors including distribution, financial and telecommunications services.
"In 31 sectors and subsectors, we'll also get the best treatment afforded by India to its future trade agreement partners. This will benefit suppliers of higher and adult education, business services, research and development, construction and engineering services, tourism and travel," the statement from Australia said.
Importantly, the trade agreement will also support tourism and workforce needs in regional Australia by making 1,000 Work and Holiday Program places available to young Indian travelers.
"The agreement will complement the Australia-India Comprehensive Strategic Partnership, the Government's implementation of the Update to the India Economic Strategy and our joint efforts in the Quad and Indo-Pacific Economic Framework, to tackle the biggest challenges of our time, including climate change and the security of our region."
The Australian government is pursuing further competitive advantages to expand this trade relationship through an ambitious Comprehensive Economic Cooperation Agreement (CECA). CECA will address deeper market access and outcomes in new areas including digital trade, government procurement and cooperation.
"Australia and India are natural trading partners - this agreement will unlock the enormous potential in our trading relationship," said Minister for Trade and Tourism, Senator the Hon Don Farrell, as per the statement.
"This agreement reflects the Government's commitment to diversifying exports and strengthening our partnerships."
"ECTA's entry into force today opens up the world's largest democracy, with nearly one and a half billion people, to Australian exporters - early entry into force sees Australian exporters receive a tariff cut today, followed by another on 1 January 2023," the minister said in the statement.