India-Australia FTA likely in 'very near future', says Australian Trade Min

Australia expects to expand its trade pact with India soon; initial FTA was signed in April 2022, removing tariffs on most goods but excluding key farm products like wheat and dairy

Australia and India are likely to expand their free trade agreement (FTA) very soon, Bloomberg quoted Australian Trade Minister Don Farrell as saying.

 

Speaking at the Lowy Institute in Sydney on Friday, Farrell said that the two countries were close to finalising the updated trade deal earlier this year. However, Australia’s general election in May caused a delay in the negotiations.

 

“If the election had been a week or so later, we might have finalised the agreement,” Farrell said. He also hinted that India’s trade minister is currently busy negotiating tariff exemptions with the Trump administration in the US. “I think we will get another agreement with India in the very near future,” he added, as quoted by Bloomberg.

 

The initial FTA between Australia and India was signed in April 2022. It removed tariffs on many goods and services traded between the two nations. In 2023, total trade between the two countries was valued at nearly A$50 billion (around $32.9 billion), according to the Australian government.   

 

Agriculture products still pending

 

Despite the earlier agreement, several key Australian agricultural products such as chickpeas, dairy, and wheat were excluded. Farrell explained that political challenges required the trade pact with India to be finalised in phases. “Bits and pieces” of the full agreement would be signed gradually, he said.

 

Farrell also addressed recent comments linking Australia’s decision to lift restrictions on US beef imports with US President Donald Trump. The Australian government announced this move a day before Farrell’s speech, and Trump had welcomed the decision on his social media platform TruthSocial.

 

However, Farrell clarified that the decision was based on science, not politics. “We haven’t done this in order to entice the Americans into a trade agreement, we think they should do that anyway,” he said, as quoted by Bloomberg. When asked whether this move would make it easier to strike a trade deal with the US under Trump, Farrell responded that it was still uncertain.

 

India, UK seal landmark free trade agreement

 

On Thursday, India and the United Kingdom officially signed a major free trade agreement. The deal was signed during Prime Minister Narendra Modi’s visit to the UK and is expected to boost trade between the two nations by $34 billion annually.

 

UK Prime Minister Keir Starmer announced new investment and export deals worth £6 billion. These are expected to generate over 2,200 jobs in the UK.   

 

  Under the agreement, India will reduce tariffs on several British goods. For example, whisky tariffs will drop from 150 per cent to 40 per cent over ten years. Import duties on British cars will fall to 10 per cent from more than 100 per cent, under a quota system. India will also lower duties on gin, cosmetics, and medical devices.

 

In return, the UK will allow zero-duty access for 99 per cent of Indian goods such as textiles, leather, marine products, gems, jewellery, toys, and sports equipment. Additionally, Indian companies will be able to bid for public contracts in UK sectors like healthcare, energy, and transport.