Home

Mixed feelings: Sheepmeat industry celebrates free trade agreement with India, grains and dairy left wanting

Headshot of Cally Dupe
Cally DupeCountryman
COUNTRYMAN. Premium lambs bound (after they are boned) for Woolworths at V & V Walsh in Bunbury. PHOTO: DANELLA BEVIS
Camera IconCOUNTRYMAN. Premium lambs bound (after they are boned) for Woolworths at V & V Walsh in Bunbury. PHOTO: DANELLA BEVIS Credit: Danella Bevis/Countryman

Australia’s red meat industry is celebrating but the grains sector has been left disappointed after the inking of a massive free trade agreement eliminating tariffs on 85 per cent of exports to India.

Farmers emerged as the big winners of the interim Australia-India Economic Cooperation and Trade Agreement on Saturday, eliminating $12.6 billion worth of tariffs on 85 per cent of exports to India.

The agreement was signed in a virtual ceremony with both Trade Minister Dan Tehan and his Indian counterpart Piyush Goyal touting it as a way to double the now-$24 billion two-way trade.

By 2032, tariffs on nearly 95 per cent of Australian goods exported to India will have been eliminated – saving $13.4 billion each year and providing a boost for efforts to reduce reliance on China.

Get in front of tomorrow's news for FREE

Journalism for the curious Australian across politics, business, culture and opinion.

READ NOW

Australia’s agriculture industry has called for the agreement to be finalised later this year, with hopes there will be more benefits for other industries including dairy and chickpeas.

There was no mention of reducing a 30 per cent tariff on Australian chickpeas in the free trade agreement, despite the Indian Government ditching a similar tariff on lentils in February.

GrainGrowers Limited chair Brett Hosking said the omission was “frustrating”, given the enormous potential for chickpea exports and ability for Australia to supplement Indian demand.

“While domestic production (of chickpeas) in India is strong there have, and will be again, periods where seasonal conditions can’t meet demands,” he said.

“Australian growers are perfectly positioned to be able to support the Indian population through these shortages. Under this free trade agreement, that won’t be an option.”

There was also no news on barley exports, with India and its healthy beer market previously identified as a major growth opportunity for malt barley producers.

Thomas Elder Markets analyst Andrew Whitelaw said there was unlikely to be “much change” for Australian grains and pulses to India if the agreement was not adjusted by the end of the year.

“The last few years have seen pulses struggle under tariffs, and India has moved to being a net exporter of wheat,” he said.

“A free trade agreement with the removal of the chickpea tariff would have been a game-changer for chickpeas. But farmers (in India)… will be pushing to continue to keep Australian chickpeas out.”

Australia’s $11 billion red meat industry was a major beneficiary, with a 30 per cent tariff on sheep meat and a 10 per cent tariff on raw skins and hides immediately wiped out.

Australia has only exported 111 tonnes of sheepmeat to India during the past five years, with premium cuts making up the majority of the trade.

Australian Meat Industry Council director Roger Fletcher said the focus on those cuts would continue to meet demand for quality product for five star catering and high-end retail segments.

“The removal of the tariff will go a long way to providing more certainty,” he said.

“The majority of other global sheepmeat customers are paying significantly less duty when importing Australian lamb and mutton.”

The agreement also removed a 2.5 per cent tariff on Australian wool, after India bolstered its wool imports by 82 per cent year-on-year to 8.19 million tonnes in the six months to January.

In a big change for small-to-medium winemakers, the tariff for premium wine will change from a 150 per cent to 100 per cent, before being slashed to 50 per cent in the next decade.

India has been among the most highly protected wine markets in the world, but Australia’s exports increased by 81 per cent in 2021 at a value of $12m after China’s trade-ending tariffs.

Tarrifs of up 30 per cent on avocados, onions, broad, kidney and adzuki beans, cherries, shelled pistachios, macadamias, cashews in-shell, blueberries, raspberries, blackberries, currants will be eliminated over seven years.

Tariffs on almonds, lentils, oranges, mandarins, pears, apricots and strawberries will also be reduced.

Dairy has also been a potential stumbling block in trade talks between the two nations, with Indian farmers concerned the domestic dairy industry would struggle to compete against Australian cheese and butter imports.

Australia and India’s trade deal talks started in 2011 but were suspended in 2015, before the two countries elevated ties and upgraded to a Comprehensive Strategic Partnership last year.

India’s population is forecast to overtake China’s to become the world’s biggest within the decade, with the United Nations predicting it will hit 1.6 billion people by 2035 and 1.7 billion by 2060.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails