Japan and India Reach a Broad EPA

Osaka – Sunday, September 12, 2010




Nikkei, Japanese newspaper specialized in business and economy, reported on September 10 that the governments of Japan and India reached a broad agreement to conclude EPA (economic partnership agreement). Japan’s EPA has already come into effect with 11 countries and regions, and India is the first country to conclude EPA with the major emerging countries of Brazil, Russia, China and India.



Tariffs of items that equals to 94% of the total trade amount between the two countries will be abolished in 10 years from the point of the agreement coming into effect. This could well drive more Japanese companies entering India market because most items that are exported from Japan such as iron and steel and components of automobiles will be free from tariff. Japan is to accept the request from India and study to speed-up approval of Generic drugs.



The main points of EPA that have been agreed with Japan and India are as below.



1. EPA is targeted to be officially agreed and concluded in October when Prime Minister of India Mr. Singh visits Japan.



Mr. Singh, the Prime Minister of India, is to visit Japan in October. The EPA is to be officially concluded then, and is expected to come into effect in 2011.



2. When the agreement comes into effect, tariffs of items covering 94% of total trade between the two countries will be abolished in 10 years.



According to 2009 statistics of JETRO (Japan External Trade Organization), approximately USD 6.3 billion was exported from Japan to India and approximately USD 3.7 billion was imported from India to Japan. Tariffs of items equivalent to 90% of the USD 6.3 billion from Japan to India and 97% of the USD 3.7 billion from India to Japan will be abolished in 10 years after the agreement comes into effect.



3. Tariffs of most items of iron and steel and automobile components will be abolished.



The two countries agreed to abolish tariffs in most items of the major industries of Japan including components of automobile, iron and steel and electronics. In many cases, 7.5% or 10% tariff is set in exporting these items from Japan to India, which sill be abolished in 10 years. It seems that tariffs of finished products will remain as today.



4. Tariffs of some agricultural items will be abolished but some others remain as today.



As for agricultural items, MAFF (Ministry of Agriculture, Forestry and Fisheries of Japan) announced that curry, tea and logs imported from India to Japan will become free from tariff but other items such as rice, wheat, beef, pork and sugar will remain as today. As for items exported from Japan to India, bonsai, strawberries and peaches will be free from tariff, and rice, milk powder and chicken will remain as today.



5. Items that India has requested will be discussed for crystallization.



Accelerating approval of generic drugs and expansion of working opportunities of India people in Japan will be agreed to further discussed to crystallize collaboration.



Japan also accepted India companies to establish in India call centre(s) targeting Japan market even if the companies do not have a branch in Japan.