New Delhi: India on Saturday signed a massive historic trade deal with Australia aiming to boost economic ties between the two countries.

Prime Minister Narendra Modi said that the India-Australia Economic Cooperation and Trade Agreement is a "watershed moment" for bilateral ties. The interim free trade deal aims to eliminate 85 per cent tariffs on Australian goods exports to India.

"Consensus on such an important agreement in such a short period of time shows the mutual trust between the two countries. This is truly a watershed moment for our bilateral relations," PM Modi said at a virtual signing ceremony of the agreement.

PM Modi said the newly signed trade deal will contribute to the increasing supply chains resilience and stability of the Indo-Pacific region.

"Great potential between our two economies to fulfil each other's needs. With this Agreement, we will be able to benefit from opportunities. On the basis of this Agreement, together we will be able to contribute to increasing supply chains resilience and stability of the Indo-Pacific region," PM Modi said.

The Agreement was signed virtually in Melbourne by Dan Tehan, Australian Minister for Trade, Tourism and Investment, with Union Commerce and Industry Minister Piyush Goyal in New Delhi.

Australian Prime Minister Scott Morrison said that the signing of the Agreement further develops on the promise of economic relationship between the two countries.

In his opening address, Dan Tehan thanked PM Modi and Australian PM Scott Morrison for inking the trade deal. "Thank You for what you have invested into this agreement through your friendship and your determination to bring out two countries together to find ourselves at this historic moment," the Australian trade minister said.

He also thanked his Indian counterpart Piyush Goyal. Tehan said, "To my good friend Piyush Goyal, Thank You for your friendship over the last seven to eight months. We have worked tirelessly with our negotiators to make sure that we have got to this occasion."

"We are very confident that this deal will see two-way trade, the trade between our nations will double in the coming years. We also know that this agreement will underpin the economic stability of the Indo-Pacific. It is an agreement for its time, it is an agreement for this moment and it's wonderful to be able to join with you to sign it. What a wonderful occasion to be doing with on India's New Year. This will create a new dawn for our nations but also it is wonderful to be able to celebrate on such an occasion," added Tehan.

The Australian government said that the deal will eliminate tariffs on more than 85 per cent of Australian goods exports to India, rising to almost 91 per cent over 10 years.

On the very first day of the implementation of the interim pact, over 6,000 tariff lines would be available for Indian exporters at zero duty.