Australia Could Ask India for Tariff Cuts on a Number of Agri Produce

Australia intends to ask India for tariff cuts on a number of agricultural commodities that were not included in the free trade agreement (FTA) signed between the two countries earlier this month, including nuts, pulses, grains, oilseeds, and packaged food, and cotton. The tariff concessions will be sought as part of the full-fledged comprehensive pact negotiations, which are expected to begin within the next two months.

According to the Department of Foreign Affairs and Trade, "the government is working to position Australia as India's primary partner in agribusiness, a key supplier of agricultural commodities, and critical partner in technical knowledge....customs duties and import tariffs remain key issues for our industries, and we will continue to seek tariff reduction in negotiations toward the Comprehensive Economic Cooperation Agreement."

According to the report, progress on technical market access issues in both markets helped two-way agricultural trade exceed $714 million in 2020.

The India-Australia Free Trade Agreement (FTA), signed on April 2, is a bold agreement in which Australia agrees to provide zero-tariff market access for 96.4 percent of Indian exports on the first day of implementation, while India agrees to do the same for 85 percent of Australian goods. By 2030, the FTA aims to double bilateral trade to $50 billion.

Agricultural products, on the other hand, have been largely excluded from the FTA due to the sector's sensitivity in India. However, with both countries agreeing to begin negotiations on a full-fledged CECA within 75 days, there is a chance for tariff reductions on a wider range of products and sectors, including government procurement and digital trade.

"Nuts, pulses, grains, oilseeds, cotton, and wool remain high on Australia's priority list. Furthermore, we are working to expand market opportunities for Australian exporters beyond our traditional export strengths, such as horticultural products, packaged food, and beverages," the update stated.

Australia's High Commissioner to India, Barry O Farrell, said at the launch of the Indian Economic Strategy Update on Tuesday that India and Australia have complementary economies and that Australia remains committed to bringing India into its top three export markets by 2035 and making India the third-largest destination in Asia for outward Australian investment.

According to the update, Australia will seek to expand opportunities for Australian agricultural commodities that benefit Indian manufacturing, such as Australian wool and cotton for India's textile producers. "As part of our broader efforts to diversify supply chains for key agricultural inputs," the report said, "the government will also look to India as a source of agricultural chemical and fertiliser imports."