Hello everyone! A major development in India-Australia trade relations was announced in late December 2025: Australia will eliminate tariffs on 100% of Indian exports starting January 1, 2026. This is the final phase of the India-Australia Economic Cooperation and Trade Agreement (ECTA), which came into effect on December 29, 2022. Commerce Minister Piyush Goyal confirmed this milestone on the agreement’s third anniversary.
Previously, Australia had removed tariffs on about 96-98% of Indian goods. Now, the remaining tariff lines will go to zero duty, giving Indian products full duty-free access to the Australian market.
This is great news for Indian exporters, especially amid challenges like US tariffs. Let’s break down the impact!
The Tariff Removal
- Effective Date: January 1, 2026
- Coverage: 100% of Australian tariff lines (all Indian goods exported to Australia)
- Agreement: India-Australia ECTA (early-harvest trade deal)
- Current Trade: Bilateral goods trade reached ~$24-25 billion in 2024-25; Indian exports grew 8% YoY.
Positive Impact on India
This move will boost Indian exports significantly:
- Cost Savings for Exporters: Lower landed costs in Australia → better price competitiveness.
- Major Beneficiaries:
- Labour-intensive sectors: Textiles, apparel, leather goods, footwear
- Gems & Jewellery: Already up 16% in April-Nov 2025
- Agriculture: Fruits/vegetables, marine products, spices, coffee
- Manufacturing: Chemicals, plastics, pharmaceuticals, engineering goods, auto parts
- MSMEs & Farmers: Easier market access, higher margins, more jobs
- Trade Growth: Expected to accelerate exports further; helps diversify from markets like the US (facing higher tariffs since mid-2025).
- Supply Chain Resilience: Stronger India-Australia ties in Indo-Pacific region.
Broader Economic Effects
- Job Creation: Boost to employment in export-oriented industries.
- Trade Balance: Improves India’s position with Australia.
- Future Outlook: Paves way for a broader Comprehensive Economic Cooperation Agreement (CECA) covering services, investment, etc.
India has reciprocated by reducing tariffs on many Australian goods (over 85-90% already duty-free).
This tariff elimination is a big win for “Make in India” and strengthens strategic economic partnership.
What do you think – which Indian sector will benefit the most? Comment below! Stay updated on trade news!