By Manish Chand, IANS,
New Delhi : Capping four years of protracted negotiations, India and Japan are set to ink in January a Comprehensive Economic Partnership Agreement (CEPA), a potential game-changer that can transform sluggish business ties between two of Asia’s largest economies.
The modalities of signing the CEPA in January are being worked out, an official who did not wish to be named told IANS.
Commerce and Industry Minister Anand Sharma may fly to Tokyo for the signing ceremony, said informed sources. The CEPA, called the EPA in Japan, is expected to come into force from April.
India’s cabinet has already given the approval for the pact that was expected to be signed during Prime Minister Manmohan Singh’s visit to Tokyo last month but could not be done as the Japanese had not completed the complicated system of approval from their side. The pact needs to be ratified by the Japanese parliament, Diet, to be become operational.
The Cabinet Legislation Bureau of Japan has carefully dissected the text of the CEPA and has cleared it, sources said.
The pact, which is broader than a free trade agreement as it also includes steps to promote greater investment and addresses intellectual property rights, will slash or eliminate tariffs on over 90 percent of the $10.4 billion bilateral trade covering around 9,000 products, ranging from steel, apparel and pharmaceuticals to capital goods.
The pact will go a long way in addressing the balance of trade which is heavily in favour of Tokyo. In 2009-10, India’s exports to Japan stood at a mere $3.63 billion while its imports were almost double at $6.73 billion.
The pact, which has been negotiated for over four years, will also spur services involving movement of persons such as nurses, care givers and information technology professionals, and promote tourism.
The agreement, say Japan watchers, could prove to be a game-changer in lukewarm business ties between two of the biggest economies of Asia and can fast-forward major infrastructure development projects here like dedicated freight corridor and the Delhi-Mumbai industrial corridor.
“The CEPA will enable greater participation of Japanese industry in Indian industry by creating capacities in manufacturing and infrastructure sectors and also facilitate freer flow of high-end technologies,” said Rajaram Panda, an expert on India-Japan relations.
During his recent visit to Tokyo, where India and Japan announced the completion of negotiations on the agreement, the prime minister had said CEPA was a “historical achievement that signals the economic alignment of two of the largest economies in Asia”
India and Japan – a leader in nuclear power technologies – are also negotiating a pact for civil nuclear cooperation that has the potential to transform broader strategic relations between the two key Asian players.
(Manish Chand can be contacted at [email protected])