Ag Key To FTA With India.

TALKS on a free-trade agreement between Australia and India will kick off in New Delhi on July 28 amid warnings that India's reluctance to expose its farm sector could thwart efforts to forge a comprehensive deal.

Australian officials are putting faith in a series of bilateral agreement negotiations given there is little hope of resuscitating an international trade liberalisation agreement as part of the Doha round of world trade talks, though talks with China and Japan are also facing sensitivities over agriculture, according to The Australian Financial Review .

There is tension between Australia and India over the Gillard government's refusal to supply uranium for nuclear power generation, though both sides have insisted publicly this will not overshadow the negotiations.

A feasibility study has found both sides would gain from a comprehensive free-trade agreement, with a net increase in Australia's gross domestic product of around $32 billion and a net increase in India's GDP of $34 billion.

Australia is keen for services firms to get better access to the Indian market, along with improved access to meat markets for Australian agricultural producers.

India wants to improve its foreign direct investment position in Australia and gain better access for its information technology firms.

The chairman of the RMIT-based Australian APEC Study Centre, Alan Oxley, said last night the challenge for Australia would be to get a comprehensive deal with India which included agriculture as well as broadening the overall trade base.

"The basis of the trade relationship between Australia and India is very narrow, relying heavily on coal and gold,'' Mr Oxley said.

He added that intransigence on agriculture from India and China was part of the reason the Doha world trade talks had stalled.

Source : sl.farmonline.com.au