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TradeIndia

Australia and India sign 'historic' trade deal

April 2, 2022

The prime ministers of both countries witnessed the signing of the deal in a virtual ceremony. Australia wants to curb dependence on China as its largest trading partner.

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India's Commerce Minister Piyush Goyal pictured at the virtual signing ceremony
Australia and India are moving closer amid China's rise in the Asia-PacificImage: Sajjad Hussain/AFP

Australia and India signed an interim free trade deal on Saturday that will see an easing of tariffs on various Australian goods and duty-free access for India on a vast majority of products.

Trade Minister Dan Tehan and his Indian counterpart, Piyush Goyal, signed the Australia-India Economic Cooperation and Trade Agreement during a virtual ceremony witnessed by Australian Prime Minister Scott Morrison and India's Narendra Modi. 

Australian, Indian leaders hail agreement 

Morrison told reporters that the agreement with India represented "one of the biggest economic doors there is to open."

Morrison also described the countries as "two dynamic regional economies, like-minded democracies, working together for mutual benefit."

Modi called it a "watershed moment."

"On the basis of this pact, together we will be able to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region," Modi said.

In 2020 India was Australia's seventh-largest trading partner, according to the Australian government, with trade between the countries valued at over $17.9 billion (€16.2 billion). Australia wants to get into India's top three export markets by 2035.

The deal will see tariffs removed on more than 85% of Australian goods exported to India, which include sheep meat, wool, coal and copper, among others.

In return 96% of Indian goods arriving in Australia will be duty-free.

Australia stuck in middle of US-China trade dispute

Trade partners share strained relations with Beijing

Both India and Australia have in recent years experienced strained diplomatic relations with China.

Over the past two years, Australia has seen a rapid deterioration of relations with Beijing, with tariffs imposed on Australian goods in response to several moves by Canberra, including banning Huawei technology from infrastructure and demanding a probe into the origins of the coronavirus. 

Relations between India and China have also been on a rapid downward trajectory after 2020's violent confrontation in the Himalayas, which saw 20 Indian soldiers and at least four Chinese soldiers killed in brutal hand-to-hand fighting.

kb/wd (Reuters, AFP, dpa)