India FTA yet to materialise but $280m package an 'early harvest'

Labor blasted the government's failure to sign a trade deal, laying the blame firmly at the Coalition's feet for ignoring the 89 recommendations made in a 2018 report to improve Australia's economic relationship with India.

But Trade Minister Dan Tehan was not fazed by Labor's criticism, labelling the $280m investment an "early harvest" of the FTA that was due to be "finalised in the coming days".

Last week, Trade Minister Dan Tehan indicated an FTA could be signed at the upcoming Quad meeting between the foreign leaders of Australia, India, the United States and Japan.

However, instead of an FTA or an interim trade deal, Mr Tehan instead announced an investment of $280 million to "boost cooperation", and support jobs and businesses in both countries.

The funding is part of the Update to the India Economic Strategy to 2035 - the same report Labor accused the government of ignoring for the past four years.

Mr Tehan said the government was committed to the India Economic Strategy and its ambitious goals, which include lifting India into one of the nation's top three export markets by 2035 and making India the third-largest Asian destination for Australian investment.

Labor trade spokesperson Madeleine King said the Coalition only had itself to blame for failing to ink the FTA, after ignoring all but one of the 90 recommendations made in the India Economic Strategy to 2035 report, which was handed to the government in 2018.

"Three successive Liberal trade ministers have failed to lay the groundwork required to secure a trade deal with India," Ms King said.

"While negotiations for a Comprehensive Economic Cooperation Agreement with India have been ongoing for many years, in September 2021 Trade Minister Dan Tehan gave himself a deadline of Christmas last year for an 'early harvest' interim trade deal, to lock in some benefits for both countries sooner rather than later.

"The leaders' meeting was an opportunity to finally ink that deal before the election, albeit three months late. Yet the interim deal was not signed."

Mr Tehan said he was in "very detailed discussions" to conclude an interim FTA and was on the phone to Indian Trade Minister Piyush Goyal earlier that morning.

"[Mr Goyal] wanted to discuss where we go and how we can make sure that we nail the deal by the end of this week or early next week," Mr Tehan said.

"The strength of the relationship that we've been able to build over the last six to seven months has meant that we are in a position that I hadn't imagined we would be in - of landing a free trade agreement hopefully, in the next week.

"We've been talking quite often - twice daily. Obviously, I've been to India twice in the last seven months. He sent his negotiating team out here to Australia three weeks ago and offered again this morning to send them over again if it was needed later this week."

Ms King said the Coalition had not even attempted to improve language and cultural training for Australian businesses to better build healthy relations with their Indian counterparts, as recommended by the report, nor provided any support for Australian universities to partner with Indian institutions to teach skills and professions to Indian students.

"[Prime Minister] Scott Morrison and Dan Tehan like to attend signing ceremonies, but they have failed to do the hard work required to develop Australia's economic relationships," she said.

"They're all about the photo op and never about the follow up."

In 2020, India was Australia's seventh largest trading partner, with two-way trade valued at $24.3 billion, and sixth largest goods and services export market, valued at $16.9 billion. In 2020, India was Australia's third largest market for services exports.

As part of the funding package, $28m will go towards a Centre for Australia-India Relations to deepen community ties, promote public discussions and policy dialogue, and engage the Indian diaspora, while $17m will be used to to extend the Australia-India Strategic Research Fund.

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