Commerce and Industry Minister Piyush Goyal has hinted at a possible overhaul of the India-Japan Comprehensive Economic Partnership Agreement (CEPA), saying the pact needs to be made more contemporary as the two countries look to expand the scope and scale of their economic engagement.
Addressing a press conference in Nagoya, Japan, Goyal said the issue of reviewing the CEPA was discussed with Japan last month. He noted that it has been 15 years since the trade agreement was signed and indicated that both sides are open to expanding its coverage.
“CEPA has to be made more contemporary, and we will work to expand this,” Goyal said. However, he clarified that work on the terms of reference (ToRs) for the review has not yet started. He added that India is open to expanding the “scope, scale and extent” of its engagement with Japan.
Japan Companies Keen To Expand India Presence
Goyal said several leading Japanese companies have expressed keen interest in rapidly expanding their presence in India. He highlighted the changes made by the Indian government over the past decade to address concerns faced by Japanese companies looking to invest in the country.
According to Goyal, Japanese companies previously faced restrictions on foreign direct investment, complicated systems and processes, as well as legal barriers while entering India. “In the last decade, we're focused strongly on reforms,” he said, adding that difficulties related to doing business have been removed to a large extent.
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The government has also started permitting foreign investment across sectors more liberally and is now providing greater support to Japanese companies looking to invest in India. Goyal said India would support Japan in its ambition to double the number of Japanese companies operating in the country from the current 1,580.
India-Japan Trade Deficit Discussed
Goyal also said the trade deficit between India and Japan was discussed during his engagements in Japan. However, he stressed that the nature of goods being traded needs to be examined while assessing the trade imbalance.
“We must see what kind of goods are being traded,” Goyal said, indicating that the composition of trade is an important factor in evaluating the deficit. A potential review of the CEPA could therefore provide an opportunity for India to address market-access concerns while also encouraging greater two-way trade and investment.
Indian Industry Faces Challenges In Japan
Goyal also acknowledged concerns raised by Indian businesses about difficulties in setting up operations and expanding exports in Japan. He said the government has asked Indian industry to share details of the challenges they face in the Japanese market.
Language barriers and differences in processes can often create difficulties for Indian companies seeking to enter Japan, he said. Goyal has also asked business councils to ensure that exporters are registered so that their concerns can be addressed more systematically.
The government's Export Promotion Mission will support exporters with registration fees and processes, he added. Goyal also urged the pharmaceutical industry to expand its global presence and ensure that Indian companies are appropriately registered in international markets.
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