India, Japan economic pact left for another day

October 22nd, 2008 - 1:27 pm ICT by IANS  

Manmohan SinghTokyo, Oct 22 (IANS) India and Japan may have left the signing of the much-touted economic partnership pact for another day, but Prime Minister Manmohan Singh says once entered it will drive their bilateral trade much beyond $10 billion.”The record of our economic and trade interaction in the last few years bodes well for the future,” the prime minister, here on a three-day visit, told a business luncheon organised by Nippon Keidanren, a leading business association, in the Japanese capital.

He said the proposed Comprehensive Economic Partnership Agreement (CEPA), which the two sides propose to sign soon, will broaden the merchandise trade basket and enhance reciprocal investments.

“It will provide economies of scale and allow India to serve as a global manufacturing hub for Japanese industry. The agreement should promote further export of our goods and services into Japan through the removal of tariff and non-tariff barriers.”

The decision to forge the CEPA was taken in December 2006 during Manmohan Singh’s visit here and his talks with then counterpart Junichiro Koizumi, following which a joint task force was set up to examine the various issues.

The modalities now are being finalised for tariff reductions, a senior official said.

Indian industry lobbies have sought immediate tariff elimination by Japan for products of export interest to India like leather, footwear, textiles, marine, chemicals and animal products on which Japan is having very high level of tariffs.

“These tariffs need to be eliminated immediately under the India-Japan Comprehensive Economic Partnership Agreement,” says the Federation of Indian Chambers of Commerce and Industry (Ficci).

“The immediate duty elimination by Japan on these products under the CEPA will give an edge to Indian exporters in Japanese market and could double its share in the next five years,” said Amit Mitra, the chamber’s secretary general.

According to the prime minister, the record of India-Japan economic and trade engagement in the past few years bode well for the future. He said bilateral merchandise trade, in the process, should double to $20 billion by 2010.

“Although the share of India in Japanese foreign direct investment overseas is insignificant, there has been a surge in Japanese investment into India last year,” he said.

“The number of Japanese business establishments now operating in India has increased to over 550,” the prime minister said.

“I urge you to keep faith in India. The India of 2020 or 2040 will be more educated, more skilled and will have far greater purchasing power. It will be the engine of growth for the global economy.”

Earlier a 20-member Indian business delegation led by Reliance Industries chairman Mukesh Ambani met with the corporate honchos of the Japan Chamber of Commerce and Industry.

Infosys co-chairman Nandan Nilekani and Malvinder Mohan Singh, who a day earlier sold his family’s entire stake in Ranbaxy Laboratories, India’s largest drug maker, to Japan’s Daiichi Sankyo, were also part of the team.

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