Australia to Eliminate Tariffs on 100% of Indian Exports

Why in news: Under the India–Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA), Australia will eliminate tariffs on 100% of Indian exports from 1 January 2026, marking a significant step in strengthening bilateral trade relations.

India–Australia ECTA

1Operational since: December 2022

2Nature: Early-harvest trade agreement

3Objective:

oImprove market access

oPromote trade diversification

oStrengthen supply-chain resilience

4Future roadmap:

oNegotiations underway for a comprehensive India–Australia CECA (Comprehensive Economic Cooperation Agreement)

Key Provisions

Duty-free access: Australia to provide zero-tariff access on 100% of Indian exports

Coverage:

oManufacturing and agriculture sectors

oServices and professional mobility (select areas)

Impact of ECTA (So far)

1Export growth: India’s exports to Australia increased by 8% in 2024–25

2Improved trade balance with Australia

3Key beneficiary sectors: Manufacturing, Chemicals, Textiles, Plastics, Pharmaceuticals, Petroleum products, Gems and jewellery

Boost to Agriculture

1Strong growth in: Fruits and vegetables, Marine products, Spices, Coffee exports (exceptional rise)

2Enhances income opportunities for farmers and agri-exporters

Support to Labour-Intensive Sectors: Full tariff elimination expected to:

1Benefit MSMEs

2Promote employment generation

3Increase incomes in labour-intensive industries such as textiles and gems & jewellery

Strategic Significance

1Strengthens India–Australia economic partnership

2Enhances supply-chain resilience

3Supports market diversification for Indian exports

4Reinforces India’s Indo-Pacific economic integration