Zero-Duty Access Signals New Phase in India–Australia Trade Relations

From January 1, 2026, all Australian tariffs on Indian exports will be eliminated under the India–Australia ECTA, boosting trade ties. The pact has driven export growth, aided labour‑intensive sectors, and strengthened supply chains. Key industries like gems and jewellery have surged, with India’s exports to Australia rising 8% in FY25.

Indian exporters are poised to strengthen their position in the Australian market as Australia prepares to eliminate duties across all tariff lines under the India–Australia Economic Cooperation and Trade Agreement (ECTA) from January 1, 2026. The development represents a key turning point in the trade partnership and comes as India intensifies efforts to broaden its export base beyond traditional markets.

The removal of tariffs is expected to provide a meaningful lift to labour-intensive industries, including textiles, leather goods, engineering products, gems and jewellery, and processed foods. In these sectors, even small reductions in costs can significantly improve price competitiveness and expand market share. For micro, small and medium enterprises (MSMEs), which often operate with limited margins, lower import costs in Australia could translate into better returns and a stronger footing against international competitors.

Australia, meanwhile, stands to benefit from reliable access to a diversified and dependable supplier, while Indian businesses gain wider exposure to a mature, high-income market known for transparent regulations and steady consumer demand.

As the ECTA completed three years, Commerce and Industry Minister Piyush Goyal said the agreement had moved from vision to measurable outcomes. In a post on X, he highlighted that the pact has delivered consistent export growth, expanded market access and reinforced supply chains, creating gains for exporters, MSMEs, farmers and workers alike.

Several industries have reported strong performance since the agreement came into force. Manufacturing, chemicals, textiles, plastics and pharmaceuticals have seen increased traction, while petroleum products and gems and jewellery have also recorded notable growth. Official data show that exports of gems and jewellery rose 16 percent between April and November 2025 alone.

Agriculture has emerged as another area of opportunity. Indian produce such as fruits, vegetables, seafood and spices is gaining popularity in Australia, with coffee exports showing particularly robust growth. To simplify trade procedures and reduce compliance burdens, both countries have agreed on a Mutual Recognition Arrangement for organic products, helping exporters avoid duplicate certification and lower transaction costs.

Overall, India’s exports to Australia increased by 8 percent in the 2024–25 financial year, contributing to an improvement in the bilateral trade balance. Analysts believe the shift to zero-duty access from 2026 could further accelerate exports, especially as companies seek alternatives to markets facing rising protectionism.

The timing is notable as India navigates strained trade relations with the United States, its largest export destination. Since August 27, 2025, Indian goods entering the US have faced a 50 percent tariff, prompting policymakers and businesses to actively explore markets such as Australia, Europe and the wider Indo-Pacific region.

Goyal said the ECTA remains central to India’s economic strategy in the Indo-Pacific, even as discussions continue on a more comprehensive Comprehensive Economic Cooperation Agreement (CECA). He added that the pact supports initiatives such as Make in India and aligns with the broader vision of Viksit Bharat 2047.

Signed in December 2022, the ECTA was designed to deepen trade and investment ties by gradually cutting tariffs, easing market access and strengthening supply-chain links. With full tariff elimination now imminent, exporters view the coming phase as a potential inflection point in India–Australia economic engagement.