Australia, India set to expand free trade pact soon: Australian trade minister

Australia and India are likely to finalise an expanded free trade agreement (FTA) in the “very near future,” according to Australian Trade Minister Don Farrell. Speaking at the Lowy Institute in Sydney on July 25, Farrell said the two countries were close to sealing the deal earlier this year, but Australia’s federal election in May pushed the timeline back. “If the election had been a week or so later, we might have finalised the agreement,” Farrell said. He noted that negotiations had been progressing well before domestic political constraints disrupted final talks.

Farrell also hinted that India’s current trade focus has shifted toward securing tariff exemptions with the Trump administration in the US, which may have further delayed the Australia-India talks. Australia and India signed their initial trade deal, the Economic Cooperation and Trade Agreement (ECTA), in April 2022. That accord eliminated tariffs on a large proportion of goods and services but left out several major Australian agricultural exports such as chickpeas, dairy, and wheat. Farrell confirmed that political sensitivities on both sides meant the FTA would be finalised incrementally. “We think we will get another agreement with India very shortly,” he added.

$33 billion trade ties and growing strategic closeness

Bilateral trade between Australia and India reached nearly AUD 50 billion ($32.9 billion) in 2023, and both nations see the relationship as strategically significant amid shifting geopolitical alignments. Farrell emphasised that the FTA expansion would further deepen trade and economic integration between the two Indo-Pacific democracies.

The comments came just days after India and the United Kingdom (UK) announced a sweeping trade pact, with India agreeing to cut tariffs on 90 per cent of British goods and the UK granting duty-free access to nearly all Indian exports. The move may add urgency to Australia’s efforts to finalise its own agreement with India.

Farrell also dismissed suggestions that recent Australian decisions on trade policy were politically motivated. Responding to claims that lifting restrictions on US beef imports was meant to appease US President Donald Trump, Farrell said the move had been based on scientific review, not politics. “We haven’t done this in order to entice the Americans into a trade agreement… We think they should do that anyway,” he said.