The India-Australia Economic Cooperation and Trade Agreement (ECTA) has applied since 29 December 2022. Australia now charges no tariff on any goods of Indian origin, and India has cut or removed tariffs on most Australian exports, some at once and some in stages. For an Australian company with an Indian subsidiary, ECTA mainly matters in three places: buying Australian inputs into India at lower duty, exporting Indian-made goods to Australia duty-free, and a 2023 Australian tax change for Indian service providers. It does not change India's foreign investment rules: incorporating, funding and reporting the subsidiary work exactly as before.
← Back to the complete guide: How to Set Up a Subsidiary in India from Australia
Key facts
| Full name | India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) |
|---|---|
| Signed | 2 April 2022 |
| In force | 29 December 2022 |
| Australian tariffs on Indian goods | Removed on 98.3% of tariff lines at entry into force and on all lines from 1 January 2026 |
| Indian tariffs on Australian goods | Removed or reduced on most lines, immediately or in stages; some sensitive products are excluded |
| Proof of origin | An ECTA certificate of origin, plus the Indian importer's own origin information under CAROTAR 2020 |
| Next step between the countries | Negotiations towards a broader Comprehensive Economic Cooperation Agreement (CECA) |
| Investment rules | Not changed: India's FDI policy and FEMA continue to apply |
ECTA in brief
ECTA is an early-harvest trade agreement: it was concluded quickly to lock in goods tariff cuts and some services commitments, while the two governments keep negotiating a fuller Comprehensive Economic Cooperation Agreement. That shape explains what it does and does not cover. It is strongest on tariffs and origin rules, has useful services and mobility commitments, and has no investment-protection chapter of the kind found in older bilateral investment treaties.
For an Australian group, the practical question is not what ECTA says in general but which of its benefits your Indian company can actually use, and what paperwork that takes. The sections below follow the goods in each direction, then services, people and tax.
Bringing Australian goods into India
Many Australian groups set up in India to sell, assemble or service products made in Australia. When the Indian subsidiary imports those products, it can claim ECTA's preferential duty instead of India's standard rate, provided the goods are of Australian origin and the claim is properly documented.
| Where the Indian subsidiary imports | What ECTA typically offers | What to check |
|---|---|---|
| Raw materials and minerals (for example coal, alumina, critical minerals) | Duty removed or sharply reduced on many lines | The exact tariff line in India's ECTA schedule |
| Wool, cotton and other inputs for manufacturing | Concessional or nil duty on many lines | Whether a tariff-rate quota or phase-in applies |
| Wine and some processed foods | Reduced duty for products above a minimum import price, phased over several years | The minimum price and the year-by-year rate |
| Machinery, instruments and medical devices | Reductions on a range of lines | Whether the product is on India's exclusion list |
| Dairy, wheat, sugar and some other sensitive products | Generally excluded from Indian concessions | Standard duty applies |
India's schedule is product-specific. Before the first shipment we confirm the eight-digit tariff classification, the ECTA rate for the current year, and whether the concession depends on a quota or minimum price. A wrong classification is the most common reason a preference claim is denied at the port.
Exporting from India to Australia
Since 1 January 2026, Australia charges no customs duty on any goods that qualify as Indian-origin under ECTA. For an Australian company, this makes India a realistic place to manufacture or finish goods for the home market: textiles and apparel, leather goods, furniture, engineering products, pharmaceuticals and processed foods all now enter Australia duty-free if they meet the origin rules.
- The Indian subsidiary must actually produce or sufficiently transform the goods in India; simply relabelling third-country goods does not qualify.
- Australian importers claim the preference with the certificate of origin issued in India, so the subsidiary's export process must include applying for it with each shipment.
- Australian GST still applies on importation, and biosecurity and product standards are unchanged: ECTA removes duty, not other border requirements.
- If the Indian subsidiary exports to its Australian parent, transfer pricing still applies: the price must be arm's length in both countries. See transfer pricing for Australian groups.
Rules of origin and certificates
Every preference under ECTA depends on proving origin. The agreement uses product-specific rules: depending on the product, goods qualify if they are wholly obtained in the country, if they change tariff classification during production there, or if enough of their value is added there (a qualifying value content test).
| Step | Australian side | Indian side |
|---|---|---|
| Who issues certificates of origin | Authorised bodies appointed by the Australian Government, such as the Australian Chamber of Commerce and Industry and the Australian Industry Group | Designated agencies, applied for online through India's common digital platform for certificates of origin |
| What the importer needs | The Indian certificate when importing Indian goods into Australia | The Australian certificate, plus origin information under CAROTAR 2020, when importing into India |
| Record keeping | Keep cost and production records that support origin | Keep the same; Indian customs can ask the importer to prove origin after clearance |
| If origin is questioned | Verification through the issuing authority | Customs can deny the preference and demand duty, interest and penalty |
India's CAROTAR 2020 rules place the burden on the Indian importer, not only the exporter. Before claiming a lower duty, the Indian subsidiary should obtain origin information from its Australian supplier, including the origin criterion met and, where relevant, the value added in Australia. We build this into the supplier onboarding pack, so the information exists before customs asks for it.
Services, professionals and visas
ECTA includes commitments by both countries to allow services suppliers from the other into a wide range of sectors, with most-favoured-nation treatment in some, and a set of mobility commitments for people. For an Australian group running an Indian team, the useful points are on movement of people.
- Australia committed to visa arrangements for Indian professionals in specified occupations, including annual places for Indian chefs and yoga instructors, and a working holiday programme for young Indians.
- Indian graduates of Australian universities received longer post-study work rights, which affects the talent pool returning to Indian centres.
- Intra-corporate transferees and contractual service suppliers have commitments on both sides, which helps short assignments in each direction, though ordinary visa rules and quotas still apply.
- For Australians posted to India, the separate India-Australia social security agreement (in force since 2016) decides superannuation and provident fund; see foreign employees and social security.
The 2023 change to Australian tax on Indian services
Before ECTA, Indian IT and service companies complained that Australia taxed their offshore technical services income as royalty under the India-Australia tax treaty, even when the work was done entirely in India. As part of the ECTA package, Australia amended its domestic law so that, from 1 April 2023, income from offshore technical services provided by Indian residents is no longer taxed in Australia on that basis.
For an Australian group with an Indian captive centre, this means an Indian subsidiary billing the Australian parent for services performed in India is not exposed to Australian withholding on those fees as royalty. The Indian subsidiary is still taxed in India on its profits, and the fee must still be arm's length. On the Indian side, payments the subsidiary makes to the Australian parent for technical services remain subject to Indian withholding under the treaty; see the India-Australia DTAA.
What ECTA does not change
| Area | Still governed by |
|---|---|
| Whether and how an Australian company can own an Indian company | India's FDI policy and FEMA (Non-debt Instruments) Rules |
| Incorporation, directors and annual filings | The Companies Act, 2013 |
| Reporting the investment | FC-GPR and the annual FLA return to the RBI |
| Corporate tax, dividends and withholding | India's Income-tax Act, 2025 and the India-Australia tax treaty |
| GST on goods and services sold in India | Indian GST law |
| Employment of staff in India | India's labour codes and state laws |
ECTA does not include an investor-state dispute settlement mechanism. Disputes with Indian counterparties are handled through contracts, arbitration and the courts, as before; see contracts and arbitration.
A checklist for your Indian subsidiary
- List every product the subsidiary will import from Australia or export to it, with the eight-digit tariff classification in each country.
- Check the current ECTA rate in India's schedule for each import, including any quota, minimum price or phase-in year.
- Collect origin information from Australian suppliers before the first shipment, to meet CAROTAR.
- Register the subsidiary for import and export: an Importer Exporter Code (IEC) from the DGFT, and GST registration.
- Set up the certificate-of-origin process for exports to Australia, so each shipment carries one.
- Align intercompany prices with transfer pricing, since customs and tax authorities in both countries look at the same invoices.
How AU Corporate handles this
AU Corporate sets up the Indian subsidiary and the trade compliance around it: IEC and GST registration, classification and ECTA duty checks with your customs broker, CAROTAR origin files, certificates of origin for exports, and the transfer pricing that keeps customs values and tax values consistent.
Related services: India subsidiary registration and corporate tax, GST and transfer pricing.
Frequently asked questions
When did the India-Australia ECTA come into force?
On 29 December 2022, after being signed on 2 April 2022.
Does Australia charge duty on goods made in India?
No. Since 1 January 2026 Australia has removed tariffs on all goods that qualify as Indian-origin under ECTA. Australian GST and other import rules still apply.
Does India charge duty on Australian goods?
India has removed or reduced duty on most Australian goods, some immediately and some in stages, and excludes some sensitive products such as many dairy items. The rate depends on the tariff line and the year.
What document does an Indian importer need to claim the ECTA rate?
An ECTA certificate of origin for the goods, and its own origin information under India's CAROTAR 2020 rules, so it can answer customs questions about origin.
Does ECTA change India's FDI rules for Australian companies?
No. Owning, funding and reporting an Indian subsidiary still follow India's FDI policy, FEMA and the Companies Act.
What was the 2023 Australian tax change?
From 1 April 2023, Australia stopped taxing Indian residents' income from offshore technical services as royalty, a change made alongside ECTA.
Does ECTA help Australian staff work in India?
It contains mobility commitments, but Australians working in India still need the right Indian visa, and pension contributions follow the India-Australia social security agreement.
Is a broader agreement coming?
India and Australia have been negotiating a Comprehensive Economic Cooperation Agreement to build on ECTA, covering more services, investment and other areas.
Related guides
India-Australia DTAA
Withholding on dividends, royalties and fees.
Read the guide →Transfer Pricing
Arm's length prices for intercompany trade.
Read the guide →Subsidiary, Branch or LLP
Choosing the Indian vehicle.
Read the guide →GCC for Australian Companies
Running a captive centre in India.
Read the guide →Sources
Last updated 3 November 2026. General information only, not legal or tax advice. Indian rules change often; confirm current requirements before acting.