New Delhi, March 10 (FN Bureau) India and Australia are set to announce an interim trade agreement, called early harvest deal, this week, under which both countries will give major concessions to each other in trade. Under the mini deal, India is likely to open up 50-60 percent of its products for imports from Australia, which in turn will give India over 90 percent of its products in preferential tariff, sources told UNI.
The deal assumes significance since Australia and China which have traditionally enjoyed good commercial ties, are at loggerheads for the past several months. “India and Australia are going to announce an early harvest deal. The initial agreement will be signed this week, and both sides will continue negotiations to make it more comprehensive,” the source privy to the negotiations told UNI. According to the source, “India is likely to open up 50-60 percent of its products for exports from Australia to India, and give preferential tariff for Australian exports. Australia in turn will give us over 90 percent of their products in preferential tariff. “So we will have far more access to the Australian market,” the source added. On February 11, Union Commerce Minister Piyush Goyal had held talks in Delhi with Australian Trade Minister Dan Tehan, and said that both sides would sign a limited trade deal, called “early harvest agreement’, in 30 days.
The India-Australia Comprehensive Economic Cooperation Agreement (CECA) is expected to be concluded in 12 months after the mini agreement. The agreement is expected to cover sectors including textiles, pharma, health, education, renewables, and gems and jewellery, said Goyal. In a related key development, India has dropped its import tariff on lentils paving the way for Australian farmers to cash in after a bumper harvest. India has also said it would reduce the tariff to zero, according to abc.net. However, a prohibitive 66 per cent tariff on chickpeas remains. India applied tariffs of 33 per cent to both lentils and chickpeas in 2017, and cut the lentil tax to 11 per cent in 2020. India’s decision to drop the tariff came days after Australia’s Trade Minister Dan Tehan’s visit to India as part of negotiations for the free trade agreement.