In lieu of opening up India's dairy and agriculture industries through low or zero tariffs, Australia has offered tariff cuts on 99 percent of its traded items with India under the proposed bilateral free trade settlement. India is keen on dairy products, cereals, oilseeds, and processed foods, which Canberra is eager to sell. By the end of this month, the two sides hope to have reached an interim deal, termed "early harvest" in trade parlance.
"Australia has stated that their import tariffs will be zero on 99 percent of products at the time the deal enters into force," an official said.
India's exports to Australia in FY21 reached $4.04 billion, including refined petroleum, pharmaceuticals, railway automobiles including hovertrains, gems, and jewels, textile goods, while imports amounted to $8.24 billion. Imports included coals, ores and extracts, gold, greens, wool, fruits and nuts, and lentils.
Indian exports of agriculture products, materials, clothing, footwear, and machine tools, among other things, may be eligible for zero-duty advantages. "Dairy and agriculture are contentious issues." "An interim package might include things on which there is mutual agreement, while controversial areas can be addressed later," the official explained.
On Monday, Commerce and Trade Minister Piyush Goyal indicated that the interim deal with Australia will cover "huge areas of interest, notably our labor-oriented industries like as textiles, footwear, pharma, leather products, and agricultural products."
The two sides agreed to finalise a long-stalled FTA known as a comprehensive financial cooperation settlement by the end of 2022.
However, trade experts warned against expanding sensitive industries such as dairy and agriculture, which employ a large number of people. "Once sensitive industries like dairy and agricultural are opened up for Australia, others like the EU and the UK will want market access as well, making our exports uncompetitive," a trade consultant remarked.
