The conclusion of negotiations on the bilateral Comprehensive Economic Partnership Agreement (Cepa) was declared in a joint statement after a meeting between Prime Minister Manmohan Singh and Japanese Prime Minister Naoto Kan here.
“We noted with satisfaction that India and Japan have succeeded in rendering the India-Japan Cepa truly comprehensive... By including fields that range from trade in goods, investment, trade in services and movement of natural persons to intellectual property, competition, improvement of the business environment, bilateral cooperation and so forth," the joint statement of the two leaders said.
From India's point of view, the Cepa would give a big boost to the country's services sectors, such as information technology, since it would become easier for professionals to move into Japan. It would also help Indian pharmaceuticals gain access to the highly regulated Japanese health market.
For Japan, grappling with a long slowdown, India offers a huge market, whose economy is growing in the region of 8.5-9 per cent annually. In the first six months of the current financial year, India's global imports were $63 billion (Rs 2.8 lakh crore) more than its exports, indicating huge consumption in the country, which Japan would like to take advantage of.
PM’s reforms promise
The Indian PM said his country’s high rate of growth would be maintained, and various economic reforms would be pushed through to ensure this. “It is my expectation that we will return to a 9 per cent growth path in 2011-12. I am confident that the strong fundamentals of the Indian economy would enable us to achieve our objective of double-digit (growth) in the coming years,” he said, at a function organised by the Japanese business forum, Nippon Keidanren.
Adding: “We are determined to continue the process of economic reforms that will create a favourable investment environment and facilitate higher investment flows.”
He detailed some of these, while inviting Japanese companies to invest in India.
In their communique, the two countries expressed their "determination" to put the Cepa into effect soon after the completion of procedures. "The... Cepa will elevate the strategic and global partnership between India and Japan to a new level... Will develop areas of potential mutual complementarity and promote economic development by increasing the cross-border flows of goods, persons, investment and services," the statement said.
Singh and Kan expressed confidence that the trade and investment-opening agreement, when signed, would "contribute to the peace and prosperity of the Asian region and the international community".
They said the Cepa was also expected to foster new business opportunities, enhance competitiveness of the private sectors of both countries and encourage a closer partnership between private enterprises, ranging from SMEs to infrastructure-related behemoths.
Earlier in the day, Prime Minister Singh said bilateral trade with Japan could exceed $20 bn (Rs 88,500 crore) by 2012, though he noted it was unbalanced. Merchandise trade between the two countries amounted to $10.36 bn (Rs 45,850 crore) in 2009-10.
The Cepa will not only increase trade in merchandise, but will also boost investment. India needs huge investments in its infrastructure sector, while Japan can make use of Indian expertise in sectors such as information technology.
The two countries also decided to speed up negotiations on nuclear deal.