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India And Japan Close To Agreement On FTA

JohnLocke

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India and Japan are expected to reach agreement soon on a free trade agreement and this may be announced formally on a forthcoming visit to Japan by Indian prime minister Manmohan Singh.


Talks were given a boost when the last prime minister Yukio Hatoyama visited Singh in India in late 2009, and they agreed to work seriously towards an early agreement. Negotiators will be meeting in September to tie up the final details.



It is hoped in particular that Japan can promote its exports of vehicle parts to India with lower tariffs. Japanese manufacturers want to expand production for the huge market of 1.2 billion consumers. Japan also wants to keep up with its competitor, South Korea, which already has an FTA with India.



From India’s part, it wishes to see legal formalities streamlined for allowing exports of its low-cost generic pharmaceuticals into the Japanese market.



It would be the 12th free trade agreement reached so far by Japan and the first since the Democratic Party of Japan coalition took office.