A NEW free trade agreement with India is expected to pave the way for increased exports from Tasmania into one of the world’s largest economies.
The biggest winners are expected to include wool, wine, cherries and rock lobsters.
The Australia-India Economic Cooperation and Trade Agreement will see tariffs eliminated on more than 85 per cent of goods exports to India (valued at more than $12.6 billion a year) rising to almost 91 per cent (valued at $13.4 billion) over 10 years.
Australian households and businesses will also benefit, with 96 per cent of Indian goods imports entering Australia duty-free on entry into force.
In 2020, India was Australia’s seventh largest trading partner, with two-way trade valued at $24.3 billion, and sixth largest goods and services export market, valued at $16.9 billion.
Last year Tasmania exported $6 million worth of wine and Tasmania was Australia’s largest exporter to the world of cherries, highlighting the potential for the India deal.
Tariffs on fresh rock lobsters will be eliminated immediately while those applied to frozen rock lobster and Atlantic salmon will be phased out over seven years.
Karl Krause, president of the Tasmanian Rock Lobster Fisherman’s Association said the industry had been trying to crack new markets following the collapse of the China market.
“This latest announcement of a free trade deal with the Republic of India is simply outstanding news for us,” Mr Krause said.
“Up until a few days ago there existed a huge 30 per cent tariff on our lobsters at the border into India.
“We could offer them product at say $90 per kilogram but that meant they were really paying $117 per kilogram due to the tariff.
“That’s all over now, so we are pleased to thank each and every person involved in bringing down this big trade wall.”
Mr Krause said India presented an exciting new market for premium Tasmanian rock lobster.
“India has 1.4 billion people. It is rapidly evolving into a modern, eclectic and educated South Asian nation, with some six million millionaires,” he said.
“Let’s face it, we are looking for high prices for our rock lobster, acclaimed as the best in the world, in these new markets.”
Locally produced wool will also attract zero tariffs when exported to India. Australia provides 57 per cent of India’s wool imports.
Nutrien Ag Solution’s Tasmanian wool manager Stewart Raine said with borders starting to open it was a great opportunity for Tasmanian wool growers to head to India on a trade mission to cement new markets and partnerships.
“India has long been an important customer for Australia’s wool industry accounting for 7 per cent of the annual clip,” Mr Raine said.
“With fewer sheep on the ground in India, as well as a shift to meat-producing breeds, a shortage of shearers and pasture being replaced by plantations and housing, there is huge scope for Australian wool in India.
“Wool must be positioned as the fibre of choice.”
Other key Tasmanian exports set to benefit from the agreement include wine – with tariffs reduced from 150 per cent to 50 per cent over 10 years for bottles valued at more than US$5 to 25 per cent for bottles valued at more than US$15 – as well as sheep meat, cherries and tin ore.
The Indian market currently represents $48 million in merchandise exports for Tasmania, but it’s believed the growth potential is immense.
Prime Minister Scott Morrison was visiting Northern Tasmania the day the agreement was finalised.
He said the agreement would create enormous trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8 billion each year.
“By unlocking the huge market of around 1.4 billion consumers in India, we are strengthening the economy and growing jobs right here at home,” Mr Morrison said.
“This is great news for lobster fishers in Tasmania, wine producers in South Australia, macadamia farmers in Queensland, critical minerals miners in Western Australia, lamb farmers from New South Wales, wool producers from Victoria and metallic ore producers from the Northern Territory.”