Japan, India strike broad agreement on free trade

Tokyo: Asian economic powerhouses, Japan and India, struck a broad agreement Thursday on an economic partnership agreement (EPA) that will see drastic reduction in tariffs between the two nations over a decade.

The details, Japanese foreign minister, Katsuya Okada said, will be ironed out before Indian prime minister Manmohan Singh visits Japan in October.

"We reached an agreement in principle" after a meeting of senior diplomats from the two nations, Okada told reporters.

"We hope that this agreement will dramatically enhance the economic relationship of our two nations," he added. He also observed that there was much scope for growth in the trade ties of both nations.

The deal comes as recession-hit Japan continues to seek expand economic ties with Asian giants, India and China. The agreement also addresses long standing demands of Japanese companies who have been envious of South Koreas' ability to strike such agreements earlier and benefit from them.

Through the agreement, Okada said, Tokyo will cut 90 per cent of its tariffs on Indian products shipped to Japan over the next decade, even as India will abolish 97 per cent of tariffs on Japanese products in the same period.