The interim FTA with India has been welcomed throughout the agricultural industries, but some industry bodies are asking if it’s enough.
The interim FTA agreement announced on 2 April 2022, creates the opportunity for Australian farmers and ag experts to enter the massive Indian market.
Tariffs will be eliminated on more than 85 per cent of Australian goods exports to India (valued at more than $12.6 billion a year), rising to almost 91 per cent (valued at $13.4 billion) over 10 years.
In 2020, India was Australia’s seventh-largest trading partner, with two-way trade valued at $24.3 billion, and the sixth-largest goods and services export market, valued at $16.9 billion.
Prime Minister Scott Morrison said the agreement would create enormous trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8 billion each year.
“This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more,” he said.
“By unlocking the huge market of around 1.4 billion consumers in India, we are strengthening the economy and growing jobs right here at home.”
Minister for Agriculture and Northern Australia David Littleproud agreed, noting that the interim agreement covers nearly 90 percent of our current agriculture exports to India.
The interim FTA is set while Australia and India look to finalise a comprehensive agreement by the end of 2022.
A Quick Overview of the Interim FTA with India
Sheep meat tariffs of 30 per cent will be eliminated
Wool will have the current 2.5 per cent tariffs eliminated
Tariffs on wine with a minimum import price of US$5 per bottle will be reduced from 150 per cent to 100 per cent on entry into force and subsequently to 50 per cent over 10 years
Tariffs on wine bottles with a minimum import price of US$15 will be reduced from 150 per cent to 75 per cent on entry into force and subsequently to 25 per cent over 10 years
Tariffs up to 30 per cent on avocados, onions, broad, kidney and adzuki beans, cherries, shelled pistachios, macadamias, cashews in-shell, blueberries, raspberries, blackberries, currants will be eliminated over seven years
Tariffs on almonds, lentils, oranges, mandarins, pears, apricots and strawberries will be reduced
Wool & Sheepmeat Industries to Benefit from Interim FTA with India
Representatives from the sheep and wool sector have welcomed the Australia-India Economic Cooperation and Trade Agreement.
Under the interim FTA, India will eliminate tariffs currently imposed on Australian sheepmeat, wool and processed skins and hides.
Australian Meat Industry Council board director and director of Fletcher International Exports, Roger Fletcher, said the focus on premium cuts would certainly continue.
“The agreement fits well with Australia’s diversified portfolio of export markets, whereby our industry carefully matches specific cuts with market segments and cuisines,” Mr Fletcher said.
“This deal is a testament to the quality and desirability of Australian sheepmeat across the world, and we are excited to be able to add to the growing list of satisfied global consumers who demand Australian red meat.”
Roger Fletcher, Australian Meat Industry Council board director and director of Fletcher International Exports
Grains Industry Concerned Over Missed Opportunities
While sheep producers are celebrating, the grains industry is warning of missed opportunities with the interim agreement.
Grain Growers chairman Brett Hosking said overall the agreement was ‘a little frustrating’ for the Australian grains sector.
“The details of the interim deal are a little frustrating given the enormous potential for exports, particularly our chickpeas into this market,” Mr Hosking said.
India is the largest producer, consumer, and importer of pulses in the world. However, Indian production is counter-seasonal to Australian.
“We feel there could be some really solid opportunities for both countries in the years where Indian production is down and they need to bring grain in,” said Mr Hosking.
Grain Producers Australia chairman Barry Large applauded the work from Aussie officials to get the deal done and said he hoped there would be further breakthroughs in talks, especially on the chickpea front.
“Whilst we understand chickpeas present some political sensitivities in these negotiations and may be seen as a stumbling block in seeking enhanced market access for all of Australian agriculture, we remain optimistic that these barriers can be resolved.”
The interim FTA with India comes after the success of the landmark Australia-United Kingdom Free Trade Agreement.
Sources: AWE, Prime Minister of Australia, Farm Online, Farm Online