Financial Express (India)
Indo-Japan economic pact to see the light of day within year
Saturday, March 10, 2007
NEW DELHI, MAR 9: India and Japan will ink the Comprehensive Economic Partnership Agreement (CEPA) in the next one year, minister of state for industry Ashwani Kumar said on Friday.
Speaking at a symposium on ‘Japan-India Strategic Partnership in the era of Asian Regional Integration’, organized by the Confederation of Indian Industry (CII), the minister said that Japan had committed that a special economic relationship will be clinched within one year.
Katsuhito Asano, senior vice minister in the Japanese ministry of foreign affairs said that the first strategic dialogue on the Economic Partnership Agreement (EPA) at the foreign minister level would be held in Japan next month.
Asano said Japan is a major donor to SAARC countries and considering the regional dynamism in South Asia, India and Japan might be able to establish new, more efficient methods to utilise this assistance for regional projects.
Speaking on the occasion, Rakesh Mohan, deputy governor, Reserve Bank of India, said deeper and more intensive policy work is the oil needed to lubricate economic linkages between India and Japan towards greater regional integration in Asia.
Trade integration in Asia had, thus far, been far ahead of financial integration, he said, calling for greater involvement of Asian banks and institutions in the region’s business arrangements.
Mohan said the RBI had increased the weight of Asian currencies in its exchange rate index to facilitate investment and trade.
Noting that Indo-Japan engagement had not reached its full potential despite the early exchanges between the two countries, notably in the auto sector and the quality movement, he called for more focus on the “nitty -gritty’ issues to pave the way for wider agreements and treaties for mutual benefit. Such facilitative policy spadework would lead to greater engagement at all levels, economic, social, academic and cultural, and ensure that no more opportunities were missed, he said. “ Everything is in place, we have to take advantage of this,” he added.
The past decade of liberalization all over the world, had, paradoxically, been accompanied by an ‘epidemic’ of regional agreements, said Dr Mohan, noting that last year had witnessed 211 regional agreements, almost a ten fold increase over a decade ago.
• The first strategic dialogue on the Economic Partnership Agreement (EPA) at the foreign minister level would be held in Japan next month
• The RBI had increased the weight of Asian currencies in its exchange rate index to facilitate investment and trade
India, too, was now keenly pursuing deeper integration within Asia, as evidenced by its agreements with countries like Singapore, Sri Lanka, among others, and the dramatic increase in its trade with China.
Yasukuni Enoki, Ambassador of Japan to India, said that the first - ever invitation by the SAARC summit to Japan as an observer is an example of acceptance of Japan’s contribution to the region and will consolidate the relationship with SAARC countries.
The main hurdles facing Japanese investment in India were inadequate infrastructure, complicated legal and taxation system and insufficient rules and regulations for interstate transactions, said Mikio Sasaki, Chairman, Mitsubishi Corporation.
These challenges could be met by the India - Japan EPA, for which negotiations had already been initiated, government initiatives through a judicious mix of grant aid, Yen credit loan and technical assistance, and India-Japan Strategic Global Partnership, he suggested. The Japan International Cooperation Agency (JICA) would continue to support India in infrastructure, HRD and environment.