Background

Till 1990, the Cold War had created a strategic-political void between the two countries After the Cold War the two countries have been forging greater cooperation Also, with an outward looking approach of Indian cono!" and #ook ast $olic", cooperation with an econo!ic power like %apan is bound to be fruitful for India &00' was declared as the Indo-%apan (riendship )ear *0th anniversar" of establish!ent of diplo!atic relations between the two countries in &01& %apan is the third largest econo!" in the world

Civil nuclear cooperation o o %apan initiated the talks %apan is tr"ing to push forward to include India under the CT+T fold before signing the agree!ent,

$- .ingh visited %apan in /ctober &010 o India-%apan to e0tend cooperation to areas such as 1oint ventures in rare earth !inerals, defence, Two !ega infrastructure pro1ects in north-western India, to accelerate discussions on 23.C refor!s, C $A signed, C $A can help catal"se the advantages of %apanese technolog" and India4s labour cost advantage to e!erge as !a1or partners in a slew of sectors such as auto, healthcare, far! products and allied !achiner",

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The real stu!bling block is India4s lack of 5ualit" infrastructure across the countr",

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(or this %apan has been channelling its Overseas Development Assistance 6/7A8 to develop!ent of infrastructure in a !a1or wa", India and %apan have alread" been cooperating on the Delhi Mumbai Industrial Corridor (DMIC) pro1ect

+ilateral trade target of 9&: bn b" &01;, a doubling of the pre-C $A level

Meeting in Dec 20
%apan pledged 9;,: bn over ne0t five "ears for the develop!ent of the 7elhi-u!bai industrial corridor

Co!!it!ent for two !ore infrastructure pro1ects o o

$hase < of the 7elhi -etro +iodiversit" conservation pro1ect in West +engal

Cepa=
The agree!ent is !ost comprehensive o! all the agreements concluded b" India so !ar as it covers !ore than 90 per cent of trade, a vast ga!ut of services, invest!ent, I$>, custo!s and other trade-related issues, +ilateral Trade e0pected to touch 9&:b b" &01; ffective fro! Aug 1 , &011 This is India#s third C$%A a!ter &ingapore and &outh 'orea( Bene!its !or India) 5ual treat!ent to Indian phar!aceutical co!panies in drug registration in %apan India is likel" to gain greater market access in *apan !or various sectors including te0tiles and gar!ents, phar!aceuticals, !arine products, tea, 1eweller" and organic and inorganic che!icals, Currentl" India accounts for 1ust over one percent of %apan?s te0tiles and gar!ents i!ports worth 9<< bn, while phar!aceuticals fro! India constitute a !iniscule 0,09 percent of %apan?s 91* bnplus i!port !arket, India +ill be bene!ited b" *apanese investments, technolog" and +orldclass management practices that come +ith it( The !a1or benefits of the agree!ent would go to the sectors like teleco!, finance, auto!obiles and

phar!aceuticals, .oreign investments !rom *apan could be the most attractive aspect o! the trade deal, especiall" at the backdrop of dipping (7I inflows into the countr" %apan has scrapped i!port duties on @' percent of goods that it i!ports fro! India with i!!ediate effect 0=pepper and tea #commercial presence# o! +orking pro!essionals to set shop in *apan( This would give a big boost to Indian professionals like !usicians, accountants, architects and business consultants, #owering of prices of i!ported products in both the countries that will ulti!atel" benefit consu!ers, India is set to lose revenues on goods since %apan?s tariffs on industrial goods are alread" as low as &A, BIt is unlikel" that India will have a big advantage even in services because of the language barrierC -(3 clause in invest!ent treat" obligations undul" affects its sovereign abilit" to adopt regulator" !easures, Bene!its !or *apan) *apan can take advantage o! India/s huge and gro+ing market and resources, especiall" its human resources 0nder the India- *apan C$%A onl" 1(2 per cent o! the tari!!-lines have been o!!ered !or immediate reduction o! tari!! to 3ero per cent b" India( 4ari!!s +ill be brought to 3ero in 0 "ears on **,<& per cent of tariff lines like auto parts, steel i!ports, electronics and !achiner" products graduall"

Civil 3uclear $act=

Dives %apanese fir!s access to the rapidl"-growing !arket691:0b8 a!id rising global co!petition, Eowever, %apanese co!panies currentl" cannot access the Indian !arket due to the lack of legal fra!ework, BThere are pro1ects that suppliers of other countries are involved in 6in India8 that re5uire %apanese technologiesC, Eence ,2. and (rance have big e0pectations for a pact, ssential for Indias nerg" securit"