India is inching closer to a free trade agreement with Australia. India is very interested in the services sector in Australia and wants wider access for its professionals. There is significant potential to expand trade in services between India and Australia. An FTA could facilitate growth in services trade by reducing barriers faced by Australian service suppliers and by increasing regulatory transparency.

Australia is pushing for a tariff reduction in dairy, fresh fruit, pharma, meat and wines. On the other hand, India wants zero duty on textiles, auto parts and fresh fruits, including mangoes. A comprehensive agreement would assist in broadening the base of merchandise trade by addressing tariff barriers and behind the border restrictions on trade in goods.

India is the world’s largest democracy and is a market of 1.2 billion people. Its youthful population, diversified economy and growth trajectory present significant opportunity for Australian business, especially in the agriculture, energy, manufacturing, mining and services sectors.

The negotiations began in May 2011. There have been issues related to market access in services and goods, with an added complication on tariff reduction. While Australia wanted India to significantly lower or eliminate tariffs on several agricultural and industrial goods, India asked Australia to ease rules on temporary movement of skilled professionals and intra-company transfers.