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India-Australia trade agreement gathering momentum under Morrison: Report

Mint | 7 March 2021

India-Australia trade agreement gathering momentum under Morrison: Report

New Delhi: India is moving in to fill the vacuum left by China for Australian resources and wine, with a free-trade agreement between Canberra and New Delhi gathering momentum under efforts by Prime Minister Scott Morrison to unlock new markets for Australia, a news report said over the weekend.

According to a report in “The Australian," India under Prime Minister Narendra Modi was seeking greater access to Australian resources, including coal and rare earth minerals. There was also a push by New Delhi to access Australian copper, steel aluminium, cobalt and nickel. This came ahead of India’s Adani Group’s Carmichael mine in Queensland producing its first coal load this year, the Australian news paper reported.

Companies including Coal India Limited were actively engaging with the Australian miners, it said.

Australian prime minister Scott Morrison, who was forced twice last year to delay official visits to India, has been in regular touch with Modi, the paper said.

“While India’s protectionist policies and tariffs on Australian resources and wine remain a hurdle, there is growing optimism a (bilateral trade) deal could be reached," it said.

Trade Minister Dan Tehan was quoted by the paper as saying that although patience would be required in working with the ­Indian bureaucracy, there was significant “willingness" to strike a deal, first floated during the ­Tony Abbott government.

“There’s a solid foundation of will and really wanting to cement the advancements that have been made in the economic relationship," Tehan said. Canberra would consider early harvest agreements, addressing concerns on both sides around agriculture, as well as unlocking opportunities for miners after China banned Australian coal, the minister was quoted as saying.

“We want to get a very constructive dialogue happening, one which puts ambition back into the free trade agreement," Tehan was quoted as saying.

The Australian government has commissioned an analysis showing how a deal could work in India’s interests. “Investment flows are ­something that India are very keen on, so how we can … encourage Australian investment into India is going to be a key to unlocking progress on the deal," the Australian minister said.

He said the government was looking at ways for wine exporters, hit by China’s trade restrictions, to get into the Indian market.

“The biggest issue there is that there is a 150 % tariff," he said. “But obviously any discussions we would be looking at seeing what we could do there. Whether we could look at ways where you could potentially seek tariff reductions for wine valued over Australian $25 or $30 — that way you work with India so they can continue develop their own wine industry but at the same time help and support our exporters get into the market."

The uptick in India-Australia economic ties comes amidst a corresponding downturn in China-Australia ties. The fraying of China-Australia ties that began with Canberra banning China’s Huawei from its 5G networks in 2018, worsened after Australia called on China to allow international investigators into Wuhan to probe the origins of the novel coronavirus last year. Beijing placed crippling tariffs on Australia’s barley exports from Australia and halted beef imports from from four large meat plants. Chins also put embargos on Australian cotton, news reports said.

At the India-Australia virtual summit last year in June, Morrison had called for “commercial and trading relationships that are built on trust."

“I think the Comprehensive Strategic Partnership that we are forming today, going to a whole new level of relationship, will continue to build the trust because we want commercial and trading relationships that are built on trust," Morrison had said.

 source: Mint