The India Japan bilateral trade can reach US$ 15 billion by 2010 from US$ 7.5 billion in 2006-07, according to the Confederation of Indian Industry (CII). New areas of trade in services, higher investment flows into India from Japan, promoting more people-to-people contact, speedy resolution of Trade Facilitation and Non-tariff Barriers (NTB's) issues can raise the level of bilateral trade between India and Japan, according to a recent study by CII.
Although import duties on most goods in Japan are already low at present, the India-Japan CEPA can raise the level of India's exports to Japan according to the study titled- 'India-Japan CEPA Negotiations: A CII Perspective'. The study calls for greater focus on agricultural exports to Japan, since Japan's self-sufficiency rate in food production is about 40%. The share of agricultural items in India's exports to Japan has seen a decline by about 22% in the last 10 years, although the processed food exports increased by 4% during this period. Currently major Indian exports to Japan like agricultural goods, pharmaceuticals, chemicals face various NTB's. The study notes that Indian exporters in Japan face language barriers in terms of understanding guidelines/regulations, which are mostly in Japanese language.
On services trade the study called for relaxation of visa norms especially for Indian medical/Para-medical workers and engineers. Japan has liberalised entry of nurses to Philippines and Indonesia as part of its free trade deals. CII wants liberalisation of trade in services within Mode-IV (cross-border movement of professionals) in the India-Japan CEPA.
On the Investment front CII expect greater investment flows from Japan once the CEPA is operational. On high technology goods trade, the study said while these goods are sensitive from the security perspective, it should not become the basis for denial of these goods to genuine Indian buyers. It calls for Validated End User (VEU) certificate from Japanese Government on the lines of the US Government policy for the Indian buyers.
India-Japan CEPA negotiations started in January 2007 and Five Rounds of negotiations has taken place up till now. The next Round will take place in Tokyo later this month. The bilateral trade has more than doubled since 2002-03 and currently stands at close to US$ 7.5 billion (2006-07) with the trade balance in favour of Japan.