NAGOYA: India on Wednesday reiterated its demand for a review of the 15-year-old Comprehensive Economic Partnership Agreement (CEPA) with Japan, indicating its willingness to expand the scope of the pact, which is seen to have failed in delivering gains to Indian goods and services exporters, according to Business-Today. The statement came from Goyal a day after he met Japan's Minister of Economy, Trade and Industry Akazawa Ryosei in Nagoya.
India presses to modernise pact after PM-level push
India has been seeking a review of the agreement for several years, but the Japanese side was holding out, Business-Today reported. A breakthrough of sorts was achieved last month when the Prime Ministers of both countries said the two sides should discuss the pact and make it more contemporary.
"I have also discussed it with my counterpart minister, and we are hoping to work towards further expanding the scope and providing new opportunities for this relationship to grow," Goyal said.
As the next step, India and Japan have to agree on the scope of the review, amid acknowledgement that there has to be give and take in the negotiations as Tokyo is not going to give up on the concessions available to it. Goyal stated:
We haven't got down to work on terms of reference, but once the teams have discussed, we will be open to expanding the scope, scale and the extent of the engagement because Japan today is one of our key strategic partners.
He added that both sides want to strengthen the partnership and have also discussed the importance of balanced trade.
Trade deficit widens as exports lag
Bilateral trade between the two countries was pegged at $27.5 billion, with India's exports estimated at $6 billion, resulting in a trade deficit of $15.5 billion for India. The deficit has widened from $11 billion in 2022-23, according to Business-Today.
| Indicator | Value |
|---|---|
| Total bilateral trade | $27.5 billion |
| India's exports to Japan | ~$6 billion |
| India's trade deficit with Japan | $15.5 billion |
| India's trade deficit in 2022-23 | $11 billion |
Industry has complained of cumbersome certification and registration requirements as the main reason for Indian exports failing to gain from the trade pact, the report noted.
Pharma registration remains a hurdle
On Tuesday, Ficci president Anant Goenka had said that it was virtually impossible for pharma companies to register their products in Japan. Goyal said the commerce department is supporting industry and exporters in registrations of their products to meet regulatory requirements.
"For the pharma industry, I have also requested to start registrations all across the world...they should all look at registering all across the world, including Japan," Goyal said.
The minister has asked different industries to submit challenges they are facing in exporting goods to Japan. "Many times these challenges are more about process and language and time, and our mission stands ready to support all sectors," he said.
FDI inflows and next steps
Of the $67 billion foreign direct investment target set by the two countries, $10 billion has flown over the last 10 months, with financial services emerging as the hottest investment bet so far, Goyal said.
Key investment figures:
- $67 billion — combined FDI target set by India and Japan
- $10 billion — FDI inflows recorded over the last 10 months
- Financial services — the hottest investment bet so far
The next step for the two governments is to agree on the scope of the review. Goyal said that once the teams have discussed the terms of reference, India will be open to expanding the scope, scale and the extent of the engagement, adding that both sides want to strengthen the partnership and have discussed the importance of balanced trade.
Sources:
