Australia to remove tariffs on all Indian exports

Australia will eliminate customs duties on 100 per cent of its tariff lines for Indian exports from January 1, 2026, marking a major milestone under the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA). The decision is expected to significantly deepen bilateral trade ties and improve market access for Indian exporters, especially in labour-intensive sectors.

Tariff-free access under Ind-Aus ECTA

The move comes as India and Australia mark three years of the Ind-Aus ECTA. From January 2026, every product exported from India will enter the Australian market at zero customs duty. This is expected to enhance price competitiveness for Indian goods and strengthen supply-chain linkages between the two economies.

Export growth and sectoral performance

Union Commerce and Industry Minister Piyush Goyal said India’s exports to Australia grew 8 per cent in FY 2024–25, contributing to an improvement in India’s trade balance. Strong growth was recorded in manufacturing, chemicals, textiles, plastics, pharmaceuticals, petroleum products, and gems and jewellery. Agricultural exports also expanded across fruits and vegetables, marine products, spices, and coffee, while gems and jewellery exports rose 16 per cent during April–November 2025.

Benefits for MSMEs and labour-intensive sectors

The removal of tariffs is expected to particularly benefit labour-intensive sectors such as textiles, leather, engineering goods, gems and jewellery, and processed food. Lower landed costs will improve margins and volumes, especially for MSMEs that often operate with thin profitability. For Australia, the arrangement ensures stable sourcing from a trusted partner, while Indian exporters gain access to a developed, high-income market with predictable trade rules.

Imporatnt Facts for Exams

• Ind-Aus ECTA came into force in December 2022.
• From January 1, 2026, Australia will offer zero-duty access on all tariff lines for Indian exports.
• Labour-intensive sectors are the biggest beneficiaries of tariff elimination.
• A Mutual Recognition Arrangement on organic products was signed to reduce compliance costs.

Path towards deeper economic integration

Negotiations for a broader Comprehensive Economic Cooperation Agreement (CECA) are ongoing, with the ECTA acting as the foundation of India’s economic engagement with Australia and the wider Indo-Pacific region. The tariff-free regime aligns with initiatives such as Make in India and the long-term vision of Viksit Bharat 2047, aimed at expanding exports, attracting investment, and strengthening strategic economic partnerships.