India and Japan Comprehensive Economic Partnership Agreement (CEPA)

On August 1, 2011, the Comprehensive Economic Partnership Agreement (CEPA) between Japan and India became operational, nearly seven years after the negotiations began in 2004.

The CEPA was signed on 16th Feb, 2011 in Tokyo. Subsequently on 30th June, 2011 Diplomatic Notes were exchanged informing each side that legal procedures necessary for entry into force of the Agreement have been completed.

This is India’s 3rd Comprehensive Economic Partnership Agreement (after Singapore and South Korea) and India’s first with a developed country. The Agreement is most comprehensive of all the agreements concluded by India so far as it covers more than 90% of trade, a vast gamut of services, investment, IPR, customs and other trade-related issues. Under the India- Japan CEPA only 17.4% of the tariff-lines have been offered for immediate reduction of tariff to zero % by India. Tariffs will be brought to zero in 10 years on 66.32% of tariff lines to give sufficient time to industry to adjust to the trade liberalization.

Under India-Japan CEPA, Indian professionals will be able to provide their services and contribute towards further development of Japan’s IT Sector. Japanese side has also agreed to conclude Social Security Agreement within a specified period (3 years). Contractual Service Suppliers (CSS), Independent Professionals (IPs) such as Accounting, R& D Services, Tourist Guide, Market Research; and Management Consulting firms now can provide services in Japan.

Under the India-Japan CEPA, India will be benefited by Japanese investments, technology and world-class management practices that come with it. Japan can take advantage of India‘s huge and growing market and resources, especially its human resources.

The current bilateral trade between India and Japan is a little over US$ 12.6 billion and it is expected that it will touch US$ 25 billion by 2014.

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