Commerce and Industry Minister Piyush Goyal has said India is open to expanding the scope, scale and extent of its economic engagement with Japan as both countries consider reviewing their Comprehensive Economic Partnership Agreement (CEPA), signed 15 years ago.
Addressing a press conference in Nagoya, Japan, Goyal said the issue of reviewing the CEPA was discussed with Japan last month. He said the trade pact needs to be made more contemporary to reflect the changing nature of bilateral trade and investment.
“CEPA has to be made more contemporary, and we will work to expand this,” Goyal said. He added that work on the terms of reference (ToRs) for the review has not yet begun.
Goyal said leading Japanese companies have expressed keen interest in rapidly expanding their presence in India. He also said India would support Japan in its ambition to double the number of Japanese companies operating in the country from around 1,580.
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Goyal said Japanese companies had earlier faced challenges while entering India, including restrictions on foreign direct investment, complicated systems and processes and legal barriers. Over the past decade, India has focused strongly on reforms aimed at improving the ease of doing business, he said. Foreign investment is now permitted more liberally across sectors, while the government is also helping Japanese companies looking to invest in India.
On the India-Japan trade deficit, Goyal said the issue was discussed but stressed that the nature of goods being traded must be examined while assessing the imbalance.
“We must see what kind of goods are being traded,” he said.
Goyal said Japan is ready to invest in India, but India also needs to be forthcoming in facilitating investments. He said India is discussing co-investment opportunities in third countries with several nations, including Japan.
Out of a $70 billion investment target, $10 billion has already been invested within 10 months, Goyal said. These investments could spur projects worth Rs 25-30 lakh crore, he added. Goyal said Indian industry had not shown enough interest in the Japanese market in the past, particularly in sectors such as textiles.
“Indian industry did not take as much interest in Japan as they should've,” he said, adding that companies are now taking action.
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He said the chairman of Uniqlo had met him and expressed strong interest in sourcing from India. On non-tariff barriers, Goyal said stringent food regulations in Japan were among the challenges, but noted that India respects such regulations.
The government has asked Indian industry to share its challenges in Japan, including issues related to language and processes. The Export Promotion Mission will support exporters with registration fees and processes, while the pharmaceutical industry has also been urged to expand its global presence and register Indian companies in overseas markets.
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