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FICCI seeks tariff elimination by Japan on textiles & apparels

20
Oct '08

Ahead of the crucial visit of the Prime Minister to Japan, FICCI has sought immediate tariff elimination by Japan for products of export interest to India like leather, footwear, textiles, marine, chemicals and animal products on which Japan is having very high level of tariffs.

FICCI noted that Indian exports are not getting adequate market access in Japan due to its high tariffs as a result of which India's share in Japan's imports has stagnated at around 0.6% for the last five years. FICCI said that although the average applied tariff in Japan is 5.1% but there are products on which Japan has tariffs over and above 400% which restricts the exports from India to Japan.

“These tariffs need to be eliminated immediately under the India-Japan Comprehensive Economic Partnership Agreement (CEPA). The immediate duty elimination by Japan on these products under the CEPA will give an edge to Indian exporters in Japanese market and could double its share in the next five years”, said Dr Amit Mitra, Secretary General, FICCI.

FICCI stated that India's exports to Japan are way behind China's exports that has a share of 20.6% in Japan's import. Chinese imports into Japan have more than doubled since 2002 and have shown a remarkable increase from $ 61.8 billion in 2002 to $ 128 billion in 2007.

FICCI further noted that most of the other Asian countries have higher share in Japanese market. Korea (4.4%), Indonesia (4.3%), Thailand (3%) and Malaysia (2.8%) are the main importing countries for Japan apart from USA (11.6%), Germany (3.1%) etc. India's share in Japan's imports has been hovering around a meager 0.6% from 2002 to 2007 (see graph at the end), although in value terms Japanese imports from India have doubled from $ 2.1 billion in 2002 to $ 4.2 billion in 2007, according to a FICCI analysis.

FICCI observed that India's share continues to be small in most of the top importing items of Japan from the world. The main commodities imported by Japan from the world in 2007 included petroleum products, electronics and electrical machinery and parts, mineral ores, measuring instruments, automobile parts and accessories, gems & jewellery, chemicals and plastics, pharmaceuticals, apparel and clothing etc.

FICCI stated that with the implementation of India-Japan CEPA, there exist enormous opportunities for Indian exporters in many of these sectors where India's share in Japanese imports is miniscule, ranging from 0.02 – 2.6%. And FICCI further added that India is a major exporter to the world of some of these products like gems & jewellery, apparel & clothing, drugs & pharmaceuticals, chemicals, automobile parts & accessories etc.

FICCI pointed out that Japan has zero duty on around 30% of its chemical and pharmaceutical products but still the share of India in Japan's drugs & pharmaceutical market is an insignificant 0.1% due to number of stringent approval and product registration requirements that act as non-tariff barriers.

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