The Australia-India Economic Cooperation and Trade Agreement (A-IECTA) came into force on 29 December 2022. The agreement was signed in April 2022, just prior to the Federal Election. It is anticipated the agreement will provide tariff savings for Australian exporters of around $2 billion per annum and save around $500 million in tariffs on imports of finished goods and inputs to manufacturing and further processing. Source: IndustryEdge
As was commented in the November 2022 edition of Pulp & Paper Edge:
“A-IECTA will provide around 85% of Australia’s exports to India to be tariff free from the outset and 91% after a decade.
“For those in the paper and packaging sectors, imports from India will see tariffs reduced to zero on nearly all grades of paper, paperboard and plastics.”
The summary text of the agreement states:
“Australia exported $2.8 billion of wood and paper products globally in 2021. Key ECTA market access outcomes include:
- phased elimination of tariffs of up to 20% on wood and wood products, including sandalwood chips, over 6 years.”
IndustryEdge has reviewed the text of the full agreement. Essentially, imports of wood products from India to Australia are now tariff free, but check specific import codes for certainty.
Exports from Australia to India will, as set out above, be removed more gradually and less consistently. Additionally, there are Tariff Rate Quotas (TRQs) that can be imposed on specific products, such that only volumes or values of goods up to the quota limit will enjoy a preferential tariff.
The full list of exports and tariffs to India can be downloaded here. This is a very large document, so for wood products, navigate to page 263 for the beginning of the wood and wood products codes. For paper and paperboard products, navigate to page 278.
In the column ‘Number of years in which duty will be eliminated…’ the reference EIF means the tariffs are eliminated when the agreement comes into force. This applies to almost all exports from Australia to India, but not to the following:
- Medium Density Fibreboard (elimination will occur over 3 to 7 years)
- Bamboo based products (mainly no reduction in the tariff over any time period)
- Wooden pickets, spikes, handles etc (no reduction in the tariff over any time period)
- Fuelwood (elimination will occur after five years)
- Tissue in reels (elimination will occur in 7 years)
- Self-copying paper – ‘other’ (no reduction in the tariff over any time period)
- Art papers (no reduction in the tariff over any time period)
- Self adhesive paper (no reduction in the tariff over any time period)
- Converted writing paper – some products (no reduction in the tariff over any time period)
- Paper labels (no reduction in the tariff over any time period)
- Paper food trays, plates etc (no reduction in the tariff over any time period)
It does not appear from the text that wood and wood products or paper and paper products will be subject to TRQs.
Now the agreement is in operation, it will be prudent, as some subscribers are already doing, for those trading with India to undertake further reviews of their products and the applicable tariffs.
The Department of Foreign Affairs and Trade has a Free Trade Agreement Portal, which can be examined in detail for imports from India. More information is available to download here.
Subscribers seeking assistance or confirmation are invited to contact IndustryEdge for support or for more information visit www.industryedge.com.au
