India and Japan today signed a comprehensive market-opening pact to boost bilateral trade between the two countries, which currently amounts to $10.36 billion per annum.
"The agreement, which the two countries had negotiated since 2007, will eliminate tariffs on 94% of two-way trade flows in 10 years after it comes into force," Japanese news agency Kyodo said.
This is the third Comprehensive Economic Partnership Agreement signed by India, the others being with Singapore and South Korea.
The pact was signed between India's Commerce and Industry Minister Anand Sharma and Japanese Foreign Affairs Minister Seiji Maehara.
Under the agreement, Japan will eliminate duties on 95% of its industrial goods and other products and India will do the same on 85% of its goods.
Citing examples, Kyodo said the 10% tariff imposed by India on Japanese exports of lithium batteries, DVD players and tractors will be lowered to zero in 10 years, while the 3.6% and 2.5% duty levied by Japan on Indian curry and tea will be eliminated in the same period.
As per the CEPA text, the objective of the agreement is to "liberalise and facilitate trade in goods and services between the parties (India and Japan)".
The pact would also help in increasing investment opportunities and strengthen protection for investment and investment activities, besides ensuring protection of intellectual property.
Other objectives of the CEPA include the promotion of cooperation for effective enforcement of competition laws, an improved business environment and a framework to enhance closer cooperation in the fields agreed in the agreement.
Japan will have to get the CEPA rectified by its Parliament, sources said.
Indian officials said the pact is likely to be put into force by April 1.
