New Delhi, Aug. 1: India’s new trade agreement with Japan that seeks to more than double trade to $25 billion by 2014 through duty cuts, came into force today.
Under the deal, Tokyo has scrapped import duties on 87 per cent of the goods that it buys from India with immediate effect, while New Delhi has dropped tariffs on 17.4 per cent of its imports from Japan.
The comprehensive economic partnership agreement, signed in February, eventually seeks to abolish 94 per cent of bilateral tariffs within 10 years.
At present, trade with Japan stands at a little over $12.6 billion.
Japan has removed almost all tariffs on industrial products, some agricultural items — such as mangoes, citrus fruits and spices — spirits, textiles, petrochemical and chemical products, cement and jewellery.
The import of Japanese consumer goods such as mobile phones — including SIM and memory cards — calculators, chargers, compact discs, DVDs and video cameras, and textiles such as woven and silk fabrics will become duty-free.
Japanese cars will not be subject to concessional duties, but some of the imported car parts will be duty-free.
India will reduce duty on diesel engines to 5 per cent from 12.5 per cent within six years, while it will cut tariffs on gear boxes to 6.25 per cent from 12.5 per cent in eight years. Duties on car mufflers, which stand at 10 per cent, will be eliminated in 10 years.
Tokyo will not offer any concessions on rice, wheat, oil, milk, sugar, leather and leather products.
India has kept agricultural and some other items out of the tariff easing programme.
“We hope to get business opportunities in textiles, spices, most importantly pharmaceuticals and services. We will open our markets to auto parts and other goods from Japan,” commerce secretary Rahul Khullar said.
Japanese ambassador Akitaka Saiki said the business communities of the two countries should make the best use of this arrangement.
“This arrangement will definitely facilitate both ways flows of trade and investment,” he said.
Source : www.telegraphindia.com