Draft on trade pact with Japan by June

Groundwork for the preparation of a Comprehensive Economic Partnership Agreement (CEPA) between India and Japan has been initiated by both the governments.

According to representatives of the Japan External Trade Organisation (JETRO), a draft agreement is expected to be ready by June 2006.

A delegation from JETRO had an half hour meeting with Prime Minister Manmohan Singh to discuss the prospects of Indo-Japanese trade and economic relations.

Addressing the media in the capital, Osamu Watanabe, chairman, JETRO, said Indo-Japanese trade relations can reach new heights under the CEPA , but expressed some concerns regarding labour related issues faced by companies in India. Senior PMO officials were present.

Watanabe however said the issue of labour relations was not discussed with the Prime Minister. 'There are some labour issues that have caught the attention of Japanese businessmen...and the Japanese businessmen are watching with keen interest how smoothly (the settlement) goes.'

He added that integration of East Asia was moving at a rapid pace and that it is an 'optimal purchasing site'.

Earlier during the day, asserting that India had removed many barriers in trade and investment, the government today invited Japanese companies to invest in the small and medium enterprise sector and special economic zones.

'We have seen Japanese technological innovations yielding results and converted into globally competitive products...We are promoting SEZs where infrastructure is better," Commerce and Industry Minister Kamal Nath said at a PHDCCI meeting here today.

He said India's economic indicators- growth rate, forex reserves all displayed the new strength of the economy which investors could look at for gainful returns.

Nath said bilateral cooperation between the private sector of the two countries could be beneficial for both. The Japanese delegation is looking to expand its presence particularly in infrastructure sector having a potential to absorb up to $150 billion in five years.

Japan has already financed the first phase of the Delhi's prestigious Metro project and would be funding the second phase as well.

It has also agreed to conduct a feasibility for the ambitious Rs 22,000 crore rail freight corridor connecting Mumbai-Delhi-Kolkata.