The Australian government has signed a landmark agreement to import cotton from India for the first time in over 50 years.
Under the agreement, Australia will purchase up to 200 tonnes of cotton from the newly formed India Export Processing Organisation (IEO) and the Government of India will buy up to 1.4 million tonnes from the Indian company Bharat Chemicals.
The agreement also establishes a new trade agreement with India that will allow Australian exporters to import up to $1 billion worth of goods.
It is a major step towards creating a significant supply of cheap cotton to the Australian market.
India has been a major player in the global cotton trade since the 1980s, exporting nearly two million tonnes of the crop each year.
But with the global demand for cotton expected to increase significantly, India’s domestic market has been badly hit.
“India has done a lot in terms of cotton.
But they are not very good at it, as far as the price of the commodity is concerned,” said Mr Abbott.”
The prices have been quite high, but we have done our part.
India has done its part.
I think it is time for Australia to do its part.”
Bharat Chemics, which is based in Bengaluru, was established by the government of India in 1997.
It has been in business for over 30 years, and is currently one of the largest exporters of cotton in the world.
The Indian company has been trying to develop a viable alternative to the US cotton industry and has invested $2 billion in new technology to reduce its CO2 emissions.
Mr Abbott said the new agreement was a great example of what Australia could achieve by working together with India.
“There are many things that we have worked on in the past, and I think we have been a big part of that in terms, we have got to get the right deals done in a very efficient way,” he said.
“This is one of those areas where we have had some good working relationships, and this is an example of that.”
He said the agreement also showed Australia could be a strong competitor in India’s market.
“I think India has made great strides in the last 10 years.
India is one the largest and most populous countries in the country, and they are looking to invest in the economy and in the environment,” Mr Abbott said.
The deal comes at a time when India is under intense pressure to boost its export revenue and tackle a growing deficit.
“That is a very, very important, if we want to be competitive in a global market, that we are going to need a competitive supply of our exports, and that’s where the new IEO agreement comes in,” he told reporters.
“So I think that’s a positive sign.”
What we are doing here is we are helping to build a strong Australian export market, and we are making sure that this will continue to be the case.
“India’s new export processor will be responsible for paying off the loan and managing the exporters credit history, Mr Abbott added.