No duty concession on 29.8% of India’s product categories under FTA with Australia
CNBC TV - 06 May 2022
No duty concession on 29.8% of India’s product categories under FTA with Australia
India will not provide import duty concession under the Free Trade Agreement (FTA) with Australia on 29.8 percent of its tariff lines or product categories, including dairy products, food grains, precious metals, jewellery and most of the medical devices.
Given the sensitivities of the specified products for the domestic industry, India has included various tariff lines under the exclusion list, said FAQs prepared by the Commerce Ministry on the India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA). The pact, signed on April 2, has not yet come into force.
"India has kept 29.8 of its tariff lines under exclusion list," as per the FAQ. It said India has kept many sensitive products in the exclusion category without offering any concession. Some of these are milk and other dairy products, chickpeas, walnut, pistachio nut, wheat, rice, bajra, apple, sunflower seed oil, sugar, oil cake, gold, silver, platinum, jewellery, iron ore and most medical devices. "This is a major gain for India in this agreement," it said.
’Exclusion list’ refers to a list of products or services that are excluded from the extension of tariff preferences under a trade pact. As per the FAQ, with the trade pact coming into force, the bilateral trade in goods and services for both countries is expected to rise from the existing USD 27.5 billion to USD 45-50 billion.
The IndAus ECTA is likely to create about 10 lakh jobs over the next 5 to 7 years, as the labour-intensive sectors are likely to gain the most. Indian exports to Australia primarily consist of consumer and manufactured goods. Major gains for goods will be in terms of tariff liberalisation by the Australian side, aided by gains from fast track approval for Pharma products in Australia. Australia is offering zero duty access to its 100 percent tariff lines for exports from India.
"Zero duty on 96.4 percent value of our exports immediately (98 percent of Tariff Lines) i.e., for these tariff lines, Indian exports will have immediate market access @Zero duty from day one of the entry into force of the Agreement," the FAQ said.
In the area of services, the Government of Australia has agreed to amend Australian domestic taxation law to stop the taxation of offshore income of Indian firms providing technical services to Australia. "Once the amendment is made, the Indian Tech Companies would no longer be required to pay taxes on offshore revenues in Australia thereby enhancing their competitiveness in the international market," the FAQ added.
For Indians granted temporary entry and temporary stay under certain categories for one year or longer and who have a spouse or dependant, Australia shall grant the accompanying spouse or dependant the right of entry and temporary stay, movement and work for an equal period to that of the natural person, the FAQ said.
On the salient features of Australia’s commitments to services, the FAQ said, among other things, the pact provides for post-study work visas for up to 4 years for Indian students and an annual quota for chefs and yoga instructors.
