Japan, India reach basic free trade accord

Agence France Presse | 9 September 2010

Japan, India reach basic free trade accord

TOKYO — Asian economic powers Japan and India broadly agreed Thursday on a free trade deal that aims to reduce most tariffs between the two nations in a decade, Japanese foreign minister Katsuya Okada said.

The two countries will iron out details before officially signing the pact when Indian Prime Minister Manmohan Singh visits Japan, probably in October, Okada told reporters.

"We reached an agreement in principle" after a meeting of senior diplomats from the two nations, he said.

"We hope that this agreement will dramatically enhance the economic relationship of our two nations," Okada said, adding that the two countries’ trade ties had much more room for growth.

The deal comes as Japan continues to seek ways to benefit from robust Asian economies, including rapidly expanding India and China.

Japan already has economic partnership agreements with 10 nations and one region — including Singapore, Mexico and the Association of Southeast Asian Nations (ASEAN).

Under the deal with India, Tokyo will cut 90 percent of its tariffs on Indian products shipped to Japan over the next decade, Okada said.

India will abolish 97 percent of tariffs on Japanese products during the same period, he said, adding that the deal was likely to cover reduced tariffs for Japanese auto parts, as Japan has long demanded.

"This is a very high-quality economic partnership agreement," but the two sides have yet to agree on further details, including an Indian request for Japan to accept Indian nurses, Okada said.

In 2008, Japan exported 7.9 billion dollars worth of goods to India, led by industrial goods such as machinery, electronics, steel products and transport equipment.

In the same year, Japan imported 5.3 billion dollar worth of Indian goods, led by oil products, iron ore, animal feed and steel.

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source: AFP