India and Australia have agreed to conclude a long-pending free trade agreement, officially dubbed as comprehensive economic cooperation agreement (CECA), by the end of 2022, and an early harvest trade deal by end of this year.
In an early harvest agreement, two trading partners significantly reduce or eliminate customs duties in a certain specified number of goods, these duties were removed in the maximum number of goods traded between them in a free trade agreement or CECA. They also liberalise norms for enhancing trade in services and boost investments in a CECA.
''The main purpose of this visit is to try to ensure that we get the best possible trade deal between India and Australia as quickly as possible...
''Based on the discussions last night with (Commerce and Industry) Minister Piyush Goyal and senior members of his team, I am confident that we can do a very good early harvest deal, which is larger rather than smaller, by the end of the year or very early in the new year...,'' Abbott told reporters.
''I am certainly confident, based on the discussions we had last night, that the time table will be met,'' he said.
Both the countries launched negotiations for a CECA in May 2011, but the negotiations were suspended in 2015, due to certain disagreements over issues such as market access in agriculture and dairy products, which Canberra had sought and over New Delhi's demand of visa liberalisation for professionals.
When asked about India's sensitivities in the agriculture sector, Abbott said that ''Australia accepts that because of the particular nature of Indian agriculture, there are very much small family farms, as opposed to the much larger commercial operations in Australia, we absolutely accept that there are some important sensitivities in Indian agriculture''.
There has to be some carve outs for elements of Indian agriculture in a good and fair trade deal, he added.
''I am confident that we can make strong progress and one of the areas where we can make a strong progress even in the early harvest agreement is wine... I am hoping that more and more people in India will have an affordable opportunity to experience this great Australian product in the months and years ahead,'' he said.
On the issue of smooth movement of professionals also, he expressed confidence that ''as part of this deal we will have enhanced mobility'' between the two countries.
He added that dairy is also one of the sensitive areas.
''The point I want to stress is that Australia is not a predatory trader, we are free and fair traders and our objective here is not to disrupt, our objective here is to partner,'' he said.
The principal exports of Australia to India include coal and these goods are key for Make in India.
Further, he said that many countries have trade tensions with China and this is an interesting moment for India as several nations are looking for a substitute for China in supply chains and India is the obvious alternative ''because almost no country has India's capability to manufacture economically and at scale''.
In 2020-21, India's exports to Australia were USD 4.04 billion, while imports were USD 8.24 billion.
India mainly exported refined petroleum, medicaments, railway vehicles including hovertrains, pearls and gems, jewellery, and made-up textile articles. While imports include coal, copper ores and concentrates, gold, vegetables, wool, fruits and nuts, lentils, and education-related services.
''Met with @HonTonyAbbott, Special Trade Envoy of the Prime Minister of Australia. Had an extensive discussion on the huge potential India & Australia have to further energise & expand our bilateral ties through Free Trade Agreement (FTA) for mutual economic prosperity,'' Goyal has said in a tweet.