Japan, India broadly agree on FTA

India and Japan have reached a broad consensus on forming a bilateral free trade deal, Japanese Foreign Minister Katsuya Okada said on Thursday.

The agreement, which was reached during sub-Cabinet-level talks in Tokyo, precedes a visit of Indian Prime Minister Manmohan Singh to Japan scheduled in late October, according to Kyodo News.

The minister said the proposed free trade agreement would provide greater access for Japanese goods and services to the world's second-most populous market. New Delhi and Tokyo have been locked in talks over the Comprehensive Economic Partnership Agreement (CEPA) negotiations to liberalize mutual trade since 2007.

Bilateral trade between the two countries, which was worth $10.3 billion in 2009-10, is expected to get a major shot in the arm with the conclusion of the deal. With signing of the free trade agreement, as many as 9,000 products ranging from steel and apparel to drugs and machinery could be traded either without duty or at substantially reduced tariffs.

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Japanese exports to India mainly comprise vehicles and electronic goods while Indian exports to Japan include oil, steel and jewelry.

The Japanese minister revealed that Tokyo has lobbied for cutting duties on Japanese exports of vehicles and auto parts. Likewise the Indian side has demanded the simplification of approval procedures for the sale of generic drugs, besides a bigger exposure for Indians in Japanese job markets.