The deal was signed by the Australian Trade Minister Dan Tehan and his Indian counterpart, Piyush Goyal, in a virtual ceremony witnessed by prime ministers Scott Morrison and Narendra Modi.
Under the deal, Australia will offer backpacker visas to 1,000 young Indians annually with the two sides agreeing on mutual recognition of qualifications, licensing, and registration procedures for professional bodies for the first time.
issued a statement saying "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."
Highlights:
- India, Australia inked major interim free trade deal in a virtual ceremony on 2 April
- Indian commerce minister Piyush Goyal will visit Australia this week with a business delegation
- Besides making special visa arrangements for Indian chefs and yoga instructors, the agreement will also offer access to working holidays for young Indians in Australia.
“This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more,” Mr Morrison said.
Highlighting the huge market of around 1.4 billion consumers in India, Mr Morrison said, "We are strengthening the economy and growing jobs right here at home."
said the signing of the deal, in such a short span of time, reflected the "depth of mutual confidence between the two countries.”
“On the basis of this agreement we will be able to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region,” Mr Modi said.
Indian Prime Minister Narendra Modi. Source: AAP Photos/Sonu Mehta/Hindustan Times/Sipa USA
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.
Under the interim trade deal, 96 per cent of Indian goods entering Australia will be made duty-free.
It would also see the elimination of tariffs on over 85 per cent of Australian goods exports to India (valued at more than $12.6 billion a year).
said the deal will also further strengthen people-to-people links between our countries.
“This agreement will turbocharge our close, long-standing and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism,” Mr Tehan said.
Minister for Trade, Tourism and Investment Dan Tehan during a press conference in Melbourne on 2 April. Source: AAP Image/Diego Fedele NO ARCHIVING
The minister announced that Australia will provide new access for young Indians to participate in working holidays in Australia.
"Australia's Work and Holiday program will be set at 1,000 per year and Australia will have two years to implement the outcome. This is expected to contribute to both workforce requirements and boost tourism to support our post-COVID recovery," Mr Tehan added.
"The length of stay for an Indian student with a bachelor’s degree with first-class honours will be extended from two to three years post-study in Science, Technology, Engineering or Mathematics (STEM) and information and communications technology (ICT) sectors," he said.
Both countries will facilitate the recognition of professional qualifications, licensing and registration procedures between professional services bodies in both countries.
Speaking to the media on Monday, Mr Tehan said that the backpacker visas will allow Indians to work in several sectors including hospitality and farming, while special visa arrangements will be made for Indian chefs and yoga instructors.
While the deadline to ink the final trade deal has not yet been set, the minister said the federal government is keen to further improve the mobility of Indians in the IT sector.
"We haven't set a time frame on the final agreement... we have talked about trying to get it done by the end of the year," he said in response to a query from SBS Hindi.
"Obviously there are other parts of the mobility side of the agreement that we could explore in the future and especially from the Indian side, there will be further requests on the mobility side," he said.
Mr Tehan added that Indian Commerce and Industry Minister Piyush Goyal is set to fly into Australia on 5 April with a business delegation.
"I will be travelling with him [Mr Goyal] to Melbourne, Sydney and Perth," he said.
The deal has been hailed by Indian High Commissioner to Australia Manpreet Vohra.
Dubbing it a game-changing deal, Mr Vohra said in a, "It will enable greater integration of economies, foster source diversification and enhance supply chains resilience and bring greater prosperity by opening new gateways for our businesses and people."
Professor Amitabh Mattoo, the former director of Melbourne-based think tank Australia India Institute (AII), has also praised the move.
"The two countries are finally acting like natural partners, and the deal represents a watershed moment in bilateral relations," Prof Mattoo said.
Prof Amitabh Mattoo, former director of Melbourne based Australia India Institute (AII), Melbourne. Source: Supplied by Prof Amitabh Mattoo
"Indian students in Australia will find an easier pathway to employment, and there will be greater ease of visa for a range of skilled human capital from India in demand in Australia, including chefs and yoga instructors," he continued.
The two nations began talks on the trade deal back in 2011, but these were suspended in 2015. In 2020, the two sides agreed to restart negotiations.
"The criticism is that maybe it should have gone further, but on the flip side, the fact it has taken 10 years to get to this level should not be taken lightly," Australia India Chamber of Commerce (AICC) executive director Harish Rao said.
"The deal allows for only $12 billion in goods exports becoming 85 per cent tariff-free immediately, whilst services exports will be treated in line with the best deal that India does with another country.
"This is not ground-breaking. However, it does signal intent on the part of India which is very important," he said.
