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FTA with India may prevent Japan firms’ moving via export rise

Mainichi Daily News, Japan

FTA with India may prevent Japan firms’ moving via export rise

28 July 2011

MUMBAI, India (Kyodo) — A free trade agreement between Japan and India, due to take effect on Monday, may help prevent some Japan companies from moving overseas through an increase in exports, a senior Japan Bank for International Cooperation official in New Delhi says.

The FTA will improve the competitiveness of Japanese companies in India against South Korean and other rival firms by cutting tariffs on exports from Japan, Joichi Kimura, chief representative of the JBIC’s representative office in the city, said during a recent interview with Kyodo News.

The bilateral accord, signed in late June, will eliminate tariffs on 94 percent of two-way trade flows within 10 years after its entry into force.

While makers in automobile and other core Japanese manufacturing sectors have already been operating India, the FTA will contribute to an increase in exports of microcomputers and other value-added, high-performance control components from Japan, Kimura said.

He also said the Delhi-Mumbai Industrial Corridor Project jointly promoted by the Japanese and Indian government to improve "inferior" industrial infrastructures in India offers good business opportunities to Japanese companies.

If the FTA deepens bilateral relations, Japanese companies will be able to advance into Africa and other regions via India, Kimura added.