India and Australia are aiming to hammer out an “early-harvest” trade deal in the next 30 days and a broader free trade agreement (FTA) will be clinched 12 months after the interim pact is operationalised, commerce and industry minister Piyush Goyal said on Friday.
Addressing media jointly with Australian minister for trade, tourism and investment Dan Tehan after two days of bilateral talks, Goyal made it clear that the interim deal will “accommodate each other’s concerns and sensitivities”.
Asked if the offers also involve further opening up of India’s dairy sector, the Australian trade minister said: “We understand the sensitivities that India has when it comes to dairy….” This suggests India is unlikely to offer any credible concession in the critical dairy sector in the interim deal.
Tehan asserted that it will be a “modern” agreement and cover not just traditional pillars but also new ones. Sources have said the India-Australia Comprehensive Economic Cooperation Agreement, as the FTA will be formally called, would cover not just goods, services and investments but also a broad range of other critical areas, such as government procurement, logistics, standards, rules of origin, phytosanitary measures, legal and institutional issues.
Goyal has been striving to get duty concession for Indian products in critical sectors, including agriculture and textiles, and greater market access in pharmaceuticals.
India had a merchandise trade deficit of $4.2 billion with Australia in FY21, as it shipped out goods worth over only $4 billion, while bilateral trade stood at $12.3 billion. Major traded items include mineral fuels, pharmaceutical products, organic chemicals and gem and jewellery.
The negotiations with Australia are a part of India’s broader strategy to forge “fair and balanced” trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after India pulled out of the China-dominated RCEP talks in November 2019.
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