India and Japan recently signed 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 Commerce Secretary, Rahul Khullar said that India and Japan Comprehensive Economic Partnership Agreement (CEPA) is a major step in the direction of larger vision of an East Asia partnership.
He was speaking at the first meeting of Joint Committee of India Japan CEPA with Akitaka Saiki Ambassador of Japan in India, here today. The CEPA enters into force from August 01.
This is India’s third Comprehensive Economic Partnership Agreement (after Singapore and South Korea) and India’s first with a developed country. The Agreement is most comprehensive of all the agreements concluded by India so far as it covers more than 90 percent of trade, a vast gamut of services, investment, IPR, customs and other trade-related issues. Under the India- Japan CEPA only 17.4 percent of the tariff-lines have been offered for immediate reduction of tariff to zero percent by India. Tariffs will be brought to zero in 10 years on 66.32 percent of tariff lines to give sufficient time to industry to adjust to the trade liberalization.
The Japanese side has put 87 percent of its tariff lines under immediate reduction of tariff to zero. A large number of these items are of India’s export interest e.g. seafood, agricultural products such as mangoes, citrus fruits, spices, instant tea, most spirits such as rum, whiskies, vodka etc, textile products such as woven fabrics, yarns, synthetic yarn, readymade garments, petro chemical &chemicals products, cement, jewellery, etc.
The exclusion list of Japan (where no tariff concessions are proposed) mainly consists of items such as rice, wheat, oil, milk, sugar, leather and leather products. The trade volume of items in the Japanese exclusion list is only 2.93 percent.
India’s exclusion list contains 1538(13.62 percent) lines at the 8 digit level. Auto parts and agricultural and other sensitive items have been kept out of the liberalisation schedule.
The current bilateral trade between India and Japan is a little over US$ 12.6 billion and it is expected that it will touch US$ 25 billion by 2014.