New Delhi, Aug 1 (IANS) India and Japan Monday implemented a comprehensive economic partnership agreement (CEPA), aiming to provide greater access to each other’s markets and almost double the bilateral trade by 2014.
The two countries had signed the CEPA Feb 16 in Tokyo and diplomatic notes were exchanged June 30.
‘We have no doubt in our minds that this will usher in a new era of economic engagement, which will bring development, innovation and prosperity in both societies,’ Commerce and Industry Minister Anand Sharma said in a statement.
The deal would allow India to use Japanese investments, technology and management practices.
‘Japan can take advantage of India’s huge and growing market and resources, especially its human resource,’ the statement said.
Japan has scrapped import duties on 87 percent of goods that it imports from India with immediate effect while India has dropped tariffs on 17.4 percent of goods that it imports from Japan.
‘Tariffs will be brought to zero percent in 10 years on 66.32 percent of tariff lines to give sufficient time to industry to adjust to the trade liberalisation,’ the statement said.
Current bilateral trade between India and Japan is around $12.6 billion. It is expected to touch $25 billion by 2014.
‘We expect that CEPA will be instrumental in significantly raising India’s current modest share of one percent in Japan’s total trade. This will help expand our bilateral trade to $25 billion by 2014,’ said Rajiv Kumar, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI).
With the implementation of the agreement, India is likely to gain greater market access in Japan for various sectors including textiles and garments, pharmaceuticals, marine products, tea, jewellery and organic and inorganic chemicals.
Currently India accounts for just over one percent of Japan’s textiles and garments imports worth $33 billion, while pharmaceuticals from India constitute a miniscule 0.09 percent of Japan’s $16 billion-plus import market, the FICCI secretary general said adding that ‘with Japan’s tariff set to become zero or substantially reduced for our exports, we can do far better’.
Describing the comprehensive economic partnership agreement (CEPA) as a major step in deepening trade ties, Commerce Secretary Rahul Khullar said the agreement was in line with India’s larger vision of an East Asia partnership.
This is India’s third CEPA after Singapore and South Korea. It covers more than 90 percent of trade, a vast gamut of services, investment, intellectual property rights (IPR), customs and other trade-related issues.
Reacting to the agreement, Assocham secretary general D.S. Rawat said the lowering of trade barriers would reduce prices of imported products in both the countries that will ultimately benefit consumers.
The major benefits of the agreement would go to the sectors like telecom, finance, automobiles and pharmaceuticals, he said.
