AFP, Thu Apr 14, 2005
Japan, India take first step toward free trade pact
TOKYO (AFP) - Japan and India took a first step to a possible free trade deal with an agreement to spend a year looking at the effects of a pact on the two major Asian economies.
Indian Commerce Minister Kamal Nath, on a three-day visit to Tokyo, met with a host of Japanese officials on Thursday, including Prime Minister Junichiro Koizumi, with both sides pledging to boost bilateral trade.
Nath agreed with Shoichi Nakagawa, minister of economy, trade and industry, that the two countries would hold a year of "policy dialogue" on a free-trade agreement, a trade ministry official said.
After a year, Japan, the world’s second biggest economy, and India, one of the fastest growing, would decide whether to begin formal negotiations on a free trade agreement.
Nakagawa said that Japan wanted a steady supply of iron ore. Nath replied that India understood the need and asked for Japan to consider assistance to help India build infrastructure including ports and mines, the official said.
Nath, who on Wednesday made a pitch to the private sector at a Tokyo business seminar, also told Nakagawa that India was ready for more investment, the official said.
A free trade pact would be a new step for each country. India has free trade agreements with its neighbors Nepal and Sri Lanka but not with any developed country.
Japan has recently begun looking more aggressively at free trade pacts. It has agreements only with Singapore and Mexico — seen as a gateway to the key US market. It is in talks with the Philippines, South Korea and Thailand, and with the Southeast Asian ASEAN bloc as a whole.
In his address to investors Wednesday, Nath said that China but not Japan was among the countries which have recognized investment opportunities in India, which in the early 1990s began to end state controls of the economy.
India’s imports from Japan sunk from 2.47 billion dollars in 1998-1999 to 2.15 billion dollars in 2001-2002, with exports following a similar pattern, according to the Indian commerce ministry.