India expects to conclude negotiations for the proposed free-trade agreement with Japan this year, thereby allowing trading in as many 9,000 products - ranging from steel and apparel to drugs and machinery - from both sides either duty-free or at very low tariff levels.
The conclusion of the Comprehensive Economic Partnership Agreement (CEPA) would lift the current $11-billion bilateral trade with Japan many-fold, minister of state for external affairs Praneet Kaur said at an ADB seminar today.
"We are now in the process of finalising a Comprehensive Economic Partnership Agreement (CEPA) with Japan and hope to conclude it by year-end," she said.
The CEPA would, however, keep the more sensitive items from the agriculture and other employment-oriented sectors out of its purview. Both the countries will also have separate lists of negative items for import.
India has included eight per cent of the tradable items in the negative list while Japan has three per cent of all goods in their negative list.
The two countries seems to have bridged their differences over opening up of sectors like pharmaceuticals and services in April this year.
India and Japan had planned to sign an FTA in 2008 during prime minister Manmohan Singh's visit to Japan for the Indo-Japanese strategic talks.
The two countries, however, failed to meet the goal of reaching a trade deal by mid-2008.
The talks between the two countries have also been bogged down on the issue of tariffs and Japan's tight regulations on Indian generic drugs.
Both India and Japan would benefit from a free trade agreement.