Australia will eliminate customs duties on 100% of its tariff lines for Indian exports starting January 1, 2026. This significant step is part of the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA). The initiative aims to foster deeper bilateral trade ties and enhance market access for Indian exporters, particularly in labor-intensive sectors.
This decision coincides with the three-year anniversary of the Ind-Aus ECTA. From January 2026, all products exported from India will enter the Australian market at zero customs duty. This policy is expected to improve price competitiveness for Indian goods and strengthen supply-chain linkages between both economies.
Union Commerce and Industry Minister Piyush Goyal reported that India's exports to Australia increased by 8% in FY 2024-25, positively impacting India's trade balance. Robust growth was noted in various sectors, including manufacturing, chemicals, textiles, plastics, pharmaceuticals, petroleum products, and gems and jewellery. Agricultural exports also saw expansion across fruits, vegetables, marine products, spices, and coffee. Notably, gems and jewellery exports surged by 16% during April-November 2025.
The removal of tariffs is anticipated to significantly benefit labor-intensive sectors such as textiles, leather, engineering goods, gems and jewellery, and processed food. This reduction in landed costs will enhance profit margins and volumes, particularly for Micro, Small and Medium Enterprises (MSMEs), which often operate with limited profitability. For Australia, this partnership ensures a stable sourcing arrangement from a reliable partner, while Indian exporters gain entry into a developed, high-income market with predictable trade regulations.
Negotiations for a more comprehensive Comprehensive Economic Cooperation Agreement (CECA) are currently underway. The ECTA serves as the groundwork for India's economic engagement with Australia and the broader Indo-Pacific region. The introduction of a tariff-free regime aligns with initiatives such as Make in India and the long-term vision of Viksit Bharat 2047, which aims to boost exports, attract investments, and fortify strategic economic partnerships.
Q1. What is the Ind-Aus ECTA?
Answer: The Ind-Aus ECTA is a trade agreement between India and Australia aimed at enhancing economic cooperation and eliminating customs duties on exports, set to take effect from January 1, 2026.
Q2. How will the removal of customs duties benefit Indian exporters?
Answer: The removal of customs duties will allow Indian exporters to enter the Australian market at zero duty, enhancing price competitiveness and improving access to a developed market.
Q3. Which sectors will benefit the most from this agreement?
Answer: Labor-intensive sectors such as textiles, leather, engineering goods, and processed food are expected to gain significantly from the elimination of tariffs under the Ind-Aus ECTA.
Q4. When did the Ind-Aus ECTA come into effect?
Answer: The Ind-Aus ECTA came into force in December 2022, with the customs duties elimination taking effect on January 1, 2026.
Q5. What are the long-term goals of the Ind-Aus ECTA?
Answer: The long-term goals include expanding exports, attracting investments, and strengthening strategic economic partnerships between India and Australia.
Question 1: What is the primary objective of the Ind-Aus ECTA?
A) To promote tourism between India and Australia
B) To eliminate customs duties on Indian exports
C) To increase foreign student admissions
D) To limit imports from Australia
Correct Answer: B
Question 2: When will zero-duty access for Indian exports to Australia begin?
A) January 1, 2024
B) January 1, 2025
C) January 1, 2026
D) January 1, 2027
Correct Answer: C
Question 3: Which sector is NOT mentioned as a beneficiary of the tariff removal?
A) Textiles
B) Aerospace
C) Engineering goods
D) Processed food
Correct Answer: B
Question 4: What was the growth percentage of India's exports to Australia in FY 2024-25?
A) 5%
B) 8%
C) 10%
D) 12%
Correct Answer: B
Question 5: What arrangement was signed to reduce compliance costs for organic products?
A) Free Trade Agreement
B) Mutual Recognition Arrangement
C) Comprehensive Economic Cooperation Agreement
D) Bilateral Trade Agreement
Correct Answer: B
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