India-Australia trade deal takes effect this month; Work visas for chefs, yoga teachers, backpackers

The historic free trade agreement between India and Australia will come into force by the end of December. The move is expected to boost the bilateral trade between the two nations besides offering a host of new opportunities for skilled professionals including yoga teachers, chefs as well as young holiday makers from India.

India-Australia Economic Cooperation & Trade Agreement has been passed by Australian Parliament. Credit: LeoPatrizi/Getty Images

Key Points

• Indian government says under the free trade deal over 100,000 Indian students to benefit from post-study work visa
• The ECTA agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.
• Indian Yoga teachers and chefs are set to gain with the annual visa quota under the ECTA.
• The Australia-India Economic Cooperation and Trade Agreement (ECTA) was signed on 2 April 2022.

On 30 November, Australian government issued a statement saying it "welcomes confirmation that the Indian government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA)."

The ground-breaking trade agreement will deliver new market access opportunities for Australian businesses and consumers from 29 December 2022.

Australian Trade Minister Don Farrell (left) with Prime Minister Anthony Albanese (right). Source: AAP / JAMES ROSS/AAPIMAGE

Australian Prime Minister Anthony Albanese said “Australia and India are increasingly working together as strategic and economic partners..The Australia-India ECTA is the next step in elevating our relationship with India, the world's fastest growing large economy.” 

The federal government, in a statement, said that 85 per cent of Australia's exports to India will be eliminated and high tariffs on a further 5 per cent of goods will be phased down.

"Entry into force of the agreement before the New Year delivers a double bonus of two tariff cuts in quick succession: one as the agreement comes into effect and a second on 1 January 2023," it said.

"ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and business will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector."

The tariff commitments provided by India in the agreement will open up access for Australia's exporters of products including critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheepmeat, horticulture and wine.  

Former Trade Minister Dan Tehan during a press conference about the signing of the trade agreement with India, in Melbourne, on April 2, 2022. Source: AAP / DIEGO FEDELE/AAPIMAGE

Australian service suppliers will benefit from full or partial access across over 85 Indian services sectors and sub-sectors and will be guaranteed the highest standard of treatment that India grants to any future free trade agreement partner across 31 sectors and sub-sectors.

Australian services sectors to benefit include higher education and adult education, as well as business services such as tax, architecture and urban planning.

ECTA will support tourism and workforce needs in regional Australia by making 1000 Work and Holiday Program places available to young adventurous Indians.

Australian government

It maintains opportunities for Indian students graduating in Australia to undertake post-study work, with a bonus year of stay for high-performing STEM graduates.

Under the new Australia India trade deal, STEM graduate, doctoral will get four year of work visa in Australia and postgraduate will get three years of work visa. Credit: ferrantraite/Getty Images

Minister for Trade and Tourism Don Farrell said “The ECTA's two tariff cuts in quick succession intensify the up-front benefits of this agreement for our exporters.“

"Businesses are encouraged to get on the front foot and prepare themselves now to take advantage of the substantial improvements in market access to India under the new agreement,” he added

Last week, Australia announced finalising its domestic requirements for the deal with the unanimous passage of government bills through both houses of Parliament.

Welcoming the announcement, Natasha Jha Bhaskar, Executive Director of Newland Global Group, said "the ECTA deal is both the dawn of a new trade orientation for Australia and a poster example of New India’s willingness to engage with countries on trade deals that it views as reciprocal, equitable, and non-discriminatory."

Natasha Jha Bhaskar is Executive Director of Newland Global Group, a leading corporate advisory firm specialising in the India–Australia space, based in Sydney. Credit: Natasha Jha Bhaskar

"It should assist in changing perceptions across the developed world which have typecast India as ‘protectionist,’ she said.

According to Ms Bhaskar, "it is essential that small and medium-sized businesses are fully aware of the ECTA rules and benefits."

"The percentage of India’s international trade routed through preferential trading arrangements or FTAs is very low, between 5 per cent and 25 per cent, which is one of the lowest in Asia, hence building awareness and knowledge among users of the benefits of ECTA is the key," she said.

Pointing the speedy signing of the deal as the most interesting aspect, she said that both nations were very extremely committed to advancing their economic ties and and focusing on restructuring regional supply chains.

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