NEW DELHI: India and Australia on Saturday inked an interim Economic Cooperation and Trade Agreement, which facilitates duty-free access to Canberra’s market for 95% tariff lines of Indian products, including leather, textiles, furniture, jewellery and select medical devices. Indian exporters from over 6,000 broad sectors will get duty-free access to the Australian market.
Benefits for Indians will include post-study work visa for four years for Indian students on a reciprocal basis and work and holiday visa arrangement for young professionals. For its part of the deal, India will offer preferential access to Australia on over 70% of its tariff lines, including those of export interest to Australia, which are primarily raw materials and intermediaries such as coal, mineral ores and wines.
The interim agreement is expected to fructify into a comprehensive deal by the end of this year. The deal was signed virtually by commerce and industry minister Piyush Goyal and his Australian counterpart Dan Tehan, in the presence of prime ministers of both countries.
“This is a watershed moment for our bilateral relations,” Prime Minister Narendra Modi said. Australian Prime Minister Scott Morrison termed the investment under the trade agreement as the single largest by the Australian government.
This is the first trade agreement India has signed with a developed country in more than a decade. India is also in talks with other developed nations like the UK, Canada and EU for free-trade pacts.
Australia is the 17th largest trading partner of India and India is Australia’s ninth largest trading partner. Bilateral trade in expected to rise from the present $27.5 billion to $45 billion in the next five years. Goyal said Australia has agreed to resolve the double taxation issue being faced by IT companies. Australia has also agreed to amend its domestic to stop the taxation of offshore income of Indian firms providing technical services in Australia.
Single-largest pact by Australia: Morrison
Australian PM Scott Morrison termed the investment under the trade agreement as the single largest by the Australian government. This is the first trade agreement India has signed with a developed country in more than a decade. India is also in talks with other developed nations like the UK, Canada and EU.