India and Japan today signed a comprehensive economic partnership agreement, following years of negotiations over market-opening to bring in a free-trade regime.
India's commerce and industry minister Anand Sharma and Japanese foreign affairs minister Seiji Maehara signed the agreement in Tokyo, giving a fresh impetus to trade between the two countries, which currently stands at around $10.36 billion a year.
"The agreement, which the two countries had negotiated since 2007, will eliminate tariffs on 94 per cent of two-way trade flows in 10 years after it comes into force," Japanese news agency Kyodo reported.
The agreement will come into force on 1 April 2011.
Japan will eliminate duties on 95 per cent of the goods it imports from India while India will reduce tariffs on 85 per cent of goods it imports from Japan.
The reduction in import duties will be phased out over a ten-year period by which time all these goods will attract zero import duty at either end.