India, Australia to sign an interim free trade deal on Saturday

New Delhi, April 1

India and Australia will sign an interim free trade deal on Saturday but some key sectors will be excluded pending a comprehensive economic cooperation agreement (CEPA) after a year.

The interim free trade deal, which will be registered as a full FTA with the WTO, excludes some sensitive sectors for India such as chickpeas and dairy. Australia was also able to ward off the Indian demand to waive labour market testing but allocates an extra 1,000 working holiday visas to Indian backpackers and slightly extended stays for top Indian IT, Engineering, Mathematics and Science graduates.

Canberra said tariffs will be eliminated on more than 85 per cent of Australian goods exports to India, rising to almost 91 per cent over 10 years.

This is the second trade agreement by the Narendra Modi Government which has expressed dissatisfaction with all the CEPAs and FTAs inked by previous governments. The government had hoped to sign three FTAs by the end of this year. Having already inked the CEPA with the UAE, the plan remains on course.