India and Australia strike interim free trade deal to deal with China

Coal mine near Muswellbrook in the Hunter Valley, Australia, Tuesday, November 2, 2021. Australia exports coal to India in particular (Illustrative image).

AP - Mark Baker

Text by: RFI Follow

1 min

India and Australia on Saturday signed an interim free trade agreement that cuts tariffs on billions of dollars worth of goods.

The agreement is especially important for Canberra whose commercial and diplomatic relations with its main trading partner China are at an all-time low.

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For Australia, a huge market is opening up, India being the second most populous country in the world.

The deal reduces tariffs on more than 85% of Australian exports to India.

The objective is to boost trade between the two countries which represented approximately 17 billion dollars last year.

Australia exported mutton, coal and other commodities, with India mainly providing services.

Canberra seeks through this agreement to diversify its export markets after Chinese reprisals against certain Australian products.

Relations between India and China have also deteriorated since the last clash between Chinese and Indian military at the Line of Control, bordering Tibet and India's Ladakh region, in June 2020.

Counter Chinese Power

This agreement shows that Canberra and New Delhi want to intensify their relations to strengthen themselves against Chinese power.

The two signatories are also members of a quadrilateral alliance with the United States and Japan, which is considered a counterweight to China in the Indo-Pacific zone.

►Also read: Indo-Pacific: the revival of the Quad, a tool against China?

Negotiations on a comprehensive India-Australia deal were launched over a decade ago but stalled in 2015. A comprehensive trade pact is now being negotiated and Scott Morrison is set to sign a deal. here at the end of the year.

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