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Is a broad India-Australia Free Trade Agreement (FTA) successful the offing? With the Australian Foreign Minister Penny Wong successful India for the Quad Foreign Ministers’ meeting, determination is anticipation that a Comprehensive Economic Cooperation Agreement (CECA) whitethorn beryllium inked. This would grow the 2022 Economic Cooperation and Trade Agreement (ECTA) that had opened 100% of the Australian marketplace to India portion India reciprocated with astir 70% marketplace entree covering astir 91% of commercialized value. Canberra has since been pushing for parity, some privately and publicly. Meanwhile the West Asia situation has forced upon India — successful the words of the Chief Economic Adviser — a “balance of payments situation accent test”, making commercialized enlargement and courting investments an urgent necessity for the country.
India has been successful a hurry implicit the past twelvemonth to reason commercialized agreements; geopolitical fragility and the unpredictability of tariff authorities person pushed India to motion agreements with the EU, the U.S., New Zealand and the U.K. CECA fits neatly into this larger recalibration.
The problems with Australia
But with Australia, the commercialized concern is complicated. Since ECTA, bilateral merchandise commercialized doubled from $12.2 cardinal successful FY 2020-21 to $24.1 cardinal successful FY 2024-25. These gains, however, person not been evenly shared. Australian exports to India relationship for astir two-thirds of the bilateral trade.
Even successful services, wherever bilateral commercialized has crossed $10 billion, Australia’s higher acquisition assemblage unsocial accounts for adjacent to 60%. In contrast, concern tells the other story: arsenic of 2024, Indian concern successful Australia had touched astir $32 cardinal against Australia’s cumulative FDI into India of astir $18 billion.
The bilateral narration is frankincense beset by interconnected problems. Australia wants parity successful marketplace access. But the question for India is not whether India should simply concede much marketplace access; it is whether India tin commercialized immoderate marketplace entree for a much balanced wide relationship. Australia’s 2025 Economic Engagement Roadmap for India identified 4 bilateral ‘superhighways’: cleanable energy, education, tourism, and agribusiness. On the archetypal three, determination appears to beryllium wide alignment but not connected the fourth. Agriculture is wherever this bargain becomes astir difficult. India has restricted entree to its cultivation marketplace successful astir each its large commercialized agreements. Despite being compelled to support India’s astir susceptible sectors (dairy, wheat, rice, sweetener and chickpeas) extracurricular ECTA, Australian workplace exports to India person risen by astir 90%, portion Indian cultivation exports to Australia person grown much modestly by 35%.
This asymmetry reflects 2 precise antithetic cultivation realities. The mean Indian workplace is astir 0.73 hectares; the mean Australian workplace exceeds 1,400 hectares. Agriculture contributes astir 16% to India’s GDP and 2.5% to Australia’s. For Australia, agriculture is an export industry. For India, it is simply a livelihood that supports much than fractional of its colonisation and remains the bedrock of its nutrient security.
The conception of a “level playing field” betwixt these 2 systems is hence a misframing of the problem. Indian farmers, adjacent with subsidised inputs, stay structurally exposed to monsoon variability, fragmented landholdings and bladed margins. Protecting the Indian marketplace from inexpensive Australian imports, peculiarly wheat, is not a negotiating position; it is simply a governmental necessity. Yet, fixed the concern standard of Australia’s farming, Canberra volition understandably propulsion India to unfastened up its marketplace fully.
Using agriculture arsenic an opportunity
Nonetheless, cultivation commercialized talks betwixt the 2 countries request not go a zero-sum game. Agriculture tin go the assemblage done which India converts Australia’s request for marketplace entree into a broader accidental for organization practice and investment. Two low-hanging fruits basal out.
First, the aboriginal of India-Australia cultivation commercialized indispensable beryllium little connected tariff concessions and much connected communal designation of biosecurity and phytosanitary standards. Building connected the 2025 integrated products arrangement, some countries tin grow practice successful integer certification, quarantine protocols and regulatory alignment. This would springiness Indian farmers a fairer changeable astatine the Australian marketplace adjacent arsenic India considers reciprocal entree for Australian farmers.
Second, Australia’s strategical accidental successful India whitethorn prevarication beyond cultivation commodities and successful exporting the systems that marque modern agriculture possible: precision farming technologies, cold-chain infrastructure, h2o absorption expertise and clime adaptation practices. India loses anyplace from 15% to 35% of its cultivation output to pests, illness and post-harvest inefficiencies each year. Australia’s extended acquisition successful dealing with drought cycles, vigor extremes and h2o scarcity is cognition that would involvement India.
However, this acquisition sharing indispensable spell hand-in-hand with existent investments. Australian capital, exertion and know-how indispensable registry a deeper beingness wrong India’s cultivation assemblage — successful retention facilities, logistics networks, farm-level tools and agri-technology partnerships betwixt firms, universities and section governments. The precocious launched India-Australia Smart Farm Network Initiative points successful the close direction.
Need for complementarity
Agriculture is excessively politically important successful India to beryllium treated arsenic conscionable different enactment point successful a commercialized schedule; equally, it is excessively economically important to beryllium near extracurricular the bilateral concern altogether. Rather than making the caller FTA 1 of implicit symmetry successful marketplace entree alone, India and Australia should marque it an statement based connected complementarity crossed commercialized and investment.
Should the diplomats succeed, the time erstwhile Chyawanprash and Vegemite beryllium connected the aforesaid meal array successful the 2 countries is not far.
Vaibhav Jain is an incoming delegate of the Australia-India Youth Dialogue. Raja Karthikeya is simply a erstwhile delegate of the Australia-India Youth Dialogue. The views expressed are personal
