Australia to Scrap Duties on All Indian Exports from 2026 Under Ind-Aus ECTA

Australia will eliminate customs duties on 100 per cent of its tariff lines for Indian exports from January 1, 2026. This elimination marks a significant milestone in the implementation of the India–Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA). The move, announced as both countries mark three years of the trade pact, is expected to substantially deepen bilateral trade ties and enhance market access for Indian exporters, particularly in labour-intensive and MSME-driven sectors.

Tariff-Free Access Under Ind-Aus ECTA

With the full removal of customs duties, every product exported from India will enter the Australian market at zero tariff. This represents one of the most comprehensive market-access commitments secured by India under any free trade agreement. The step is expected to improve the price competitiveness of Indian goods, reduce trade friction, and strengthen long-term supply-chain integration between the two economies.

The Ind-Aus ECTA, which came into force in 2022, was designed as an early-harvest agreement, with phased liberalisation. Australia’s decision to fully eliminate tariffs ahead of schedule signals growing confidence in India as a reliable trade and manufacturing partner.

Export Growth and Sectoral Gains

Union Commerce and Industry Minister Piyush Goyal noted that India’s exports to Australia grew by 8 per cent in FY 2024–25, helping improve India’s overall trade balance. Manufacturing exports such as chemicals, textiles, plastics, pharmaceuticals, petroleum products, engineering goods, and gems and jewellery recorded strong performance.

Agricultural exports also expanded, covering fruits, vegetables, marine products, spices, and coffee, while gems and jewellery exports rose by 16 per cent during April–November 2025. The complete tariff elimination is expected to accelerate these trends.

Boost for MSMEs and Labour-Intensive Sectors

The zero-duty regime will particularly benefit MSMEs. It will also aid labour-intensive industries such as textiles, leather, gems and jewellery, engineering goods, and processed food. Lower landed costs in Australia will improve profit margins, enhance export volumes, and encourage Indian firms to scale up production.

For Australia, the arrangement ensures diversified and stable sourcing from a trusted partner. For India, it opens access to a high-income, rules-based market. It reinforces the Ind-Aus ECTA as a cornerstone of India’s trade strategy in the Indo-Pacific.

Exam-Oriented Facts

Ind-Aus ECTA entered into force in December 2022 as an early-harvest free trade agreement.
From 1 January 2026, Australia will offer zero-duty access on 100% tariff lines for Indian exports.
Australia is among the few developed economies to grant complete tariff elimination to India.
India’s exports to Australia grew 8% in FY 2024–25.
Labour-intensive sectors benefitting most:
- Textiles & apparel
- Leather & footwear
- Gems & jewellery
- Engineering goods
- Processed food
Gems & jewellery exports to Australia rose 16% (Apr–Nov 2025).
The agreement supports India’s MSME export expansion and Indo-Pacific trade strategy.
Ind-Aus ECTA strengthens India’s trade presence in a high-income OECD market with predictable regulations.