India and Australia are likely to sign an interim free trade agreement (FTA) on 21 March, which may allow easier market access for Indian pharmaceutical products, besides duty concessions on gems and jewellery and textiles, said three people aware of the development.
The mini trade pact may also offer some concessions in the fields of education, tourism, health and renewable energy. Australia is likely to get tariff cuts on premium wines that do not compete with domestic winemakers. “The negotiations are at an advanced stage and the sides are hopeful of finalizing them by 21 March. It will also make way for a comprehensive free trade pact, the negotiations for which will begin after inking the early-harvest agreement,” one of the two people, a government official, said seeking anonymity.
Indian pharma and medical products, which have received approval from authorities of other developed nations such as the US, UK, the EU, Canada and Japan, are likely to get regulatory approval within 90 days. The terms of agreement are similar to the just- concluded deal with the UAE.
Mint reported on India pressing for preferential market access for drugs and pharma products during the FTA talks with Australia and the possibility of an interim deal being finalized in a few weeks.
India is negotiating a mutual recognition agreement (MRA) for pharmaceutical products as a part of the pact. New Delhi had sought faster and easier clearance for generic pharma products, that are approved by developed countries. “We are hoping the pharma sector will get easier access under the early-harvest agreement with Australia. It is one of the biggest hurdles for the pharma sector,” said an industry executive, who also did not want to be named. Australia accounts for 1.63% of New Delhi’s total outbound pharmaceutical shipments.
Queries emailed to spokespersons of the Australian High Commission and the commerce and industry ministry did not elicit a response till press time.
“New Delhi may be willing to lower tariffs on Australian wines over a certain monetary threshold, as it will not affect low-cost Indian wines,” said a second executive seeking anonymity. India currently imposes 150% tariff on alcoholic beverages. Australia is the sixth-largest wine producer and the fourth largest wine exporter in the world. The Indian market is nascent, but growing.
The India-Australia interim trade deal follows the Supply Chain Resilience Initiative by India, Japan and Australia to reduce dependence on China. The deal is also aimed at bridging the trade gap between New Delhi and Canberra, which has more than doubled to $6.46 billion in favour of Australia, from $2.46 billion in 2020-21. While India’s exports surged 101% in the April to December period, its imports were 130% higher compared to the year-ago period. “We are expecting duty for apparel to be lowered because Australia is looking to shift away from China for its needs owing to deteriorating relations,” Narendra Goenka, chairman, Apparel Export Promotion Council, said.
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