CEPA with Japan to get finalized in December

25 Sep '08

2 min read

India finally struck a deal with Japan which is likely to give a further boost to its economy especially since there lies immense potential between the two nations that still needs to be tapped.

For instance, bilateral trade between the two economies presently stands at about US $4 billion but is expected to touch a mark five times higher i.e., $20 billion by 2010 after the Comprehensive Economic Partnership Agreement (CEPA) gets finalized in December this year.

CEPA will be instrumental when it comes to deeper market penetration in items like textiles, especially since Japan spends US $23 billion in textile imports. The CEPA is expected to align bilateral trade more in accordance with India's established comparative advantage and assisting it in better market penetration by offering innumerable trading opportunities.

However, full potential can be realized only if bilateral trade is catalyzed by dual combination of Japanese FDI in India and continued trade liberalization. This would immensely increase the volume of bilateral trade in capital goods and components like in the processing sector.

It was revealed during a JIBCC-FICCI Business Summit held in Tokyo that Japan's share in India's global trade was mere 2.3 percent in 2006-07 and is now standing at around 5 percent.

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