CEPA India Japan

7/29/2019 CEPA India Japan

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INDIA JAPAN COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT(CEPA)

Background

The negotiations for India-Japan CEPA began in Yr. 2004 and came into effect on 1 stAugust 2011. India-Japan CEPA is the third such agreement having concluded, theearlier ones being Singapore in 2005 and Korea in 2009. It is infact for the first time thatIndia has signed a CEPA with any developd industrialized country. The agreementcovers goods and services trade and also areas like investment, competition policy,intellectual property rights and government procurement.

Main features of CEPA are:

The Agreement is most comprehensive of all the agreements concluded by India. so far as it covers more than 90% of trade, a vast gamut of services, investment,IPR, customs and other trade-related issues.

Overall, about 94% of the tariffs between Japan and India will be eliminatedwithin 10 years

about 97% of tariffs will be eliminated by Japan on a trade value basis within 10years.

Japan agreed to eliminate almost all the tariffs on industrial products at theentering into force of this agreement. Under India Japan CEPA, Japan has put87% of its tariff lines under immediate reduction of tariff to zero. A large numberof these items are of India's export interest.

Under the India- Japan CEPA only 17.4% of the tariff-lines have been offered forimmediate reduction of tariff to zero % by India. Tariffs will be brought to zero in10 years on 66.32% of tariff lines to give sufficient time to industry to adjust to thetrade liberalization.

Indias schedule of tariff reductions

In terms of granting market access opportunities, CEPA requires India to eliminatetariffs on 17.4% of its total tariff lines immediately after the agreement comes into effect.Within a period of 10 years, India would eliminate tariffs on nearly 86% of its tariff lines.Prominent product groups that have been excluded from the tariff elimination processare agricultural commodities and a sizeable proportion of the processed products,plastic products, several categories of non-electrical machinery, and auto and autocomponents.

Among some of the steps that India is going to undertake is to reduce trade barriers andbring it to zero on auto parts, steel imports, electronics and machinery productsgradually. India would also relax restrictions to single brand companies from Japan to


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have controlling stakes of 51% in local companies or set up franchisees. However, Indiahas decided not to give any leeway to Japan on government procurement. India hasalso refused to part with its sensitive sectors like agricultural goods, fruits and spices.

Japans schedule of tariff reductions

Japan has agreed to eliminate tariffs on 87% of its tariff lines immediately. Over the nextdecade, Japan would have removed import tariffs on nearly 97% of the tariff lines.Benefiting from the tariff elimination commitment made by Japan would be marineproducts, fruits, alcoholic beverages, and textile and clothing products. Many of theseproducts have had higher tariffs in the past, thus impeding access to the Japanesemarket.

Japan has agreed to remove import tariffs on food products like pepper and tea withinthe next decade while at the same time allowing 'commercial presence' of workingprofessionals to set shop in Japan. This would give a big boost to Indian professionals

like musicians, accountants, architects and business consultants. The two countrieswould negotiate on the possibility of allowing Indian nurses from working in Japan whichhas its bulk population in their 60's.

India-Japan bilateral trade has raised quite insignificantly in the last few years. The totaltrade between the two countries has been around 10 billion USD for the last few yearsand has increased marginally to 13.82 billion in Yr. 2010-11. Japan which ranked 7 th asa supplier of goods to Inida in Year 2001 has declined to 13th position in the currentyear. Similarly, India is not among the top supplier countries to Japan whereas manycountries from the Asian region like China, Korea, Indonesia, Malaysia amd Thailandfeature among the top 10 suppliers to Japan.

Successful implementation of the India-Japan CEPA should, therefore, be seen as themuch-needed fillip for setting CEPA in motion.

Implications

Comprehensive Economic Partnership Agreement (CEPA) with Japan will remove tariffson 94% of goods over ten years. The deal is expected to boost bilateral trade betweenthe two countries to $25 billion from $13.8 billion at present. India could be a net gainerbecause of increased FDI inflow from Japan post the deal.

You may refer to link http://commerce.nic.in/trade/IJCEPA_Basic_Agreement.pdf fordetailed agreement and for schedule of Tariffs by both the countries.

Customs duties on originating goods classified under the tariff lines indicated with A inJapan Schedule for India has been eliminated, as from the date of entry into force of theIndia Japan CEPA Agreement.
http://commerce.nic.in/trade/IJCEPA_Basic_Agreement.pdfhttp://commerce.nic.in/trade/IJCEPA_Basic_Agreement.pdf


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Please find below the list of major engineering items on which the tariffs has beenbrought to ZERO from the date of enforcement of this agreement i.e. w.e.f. 1st August2011.

Engineering Items of Category A in Japans Tariff Schedule for India

Engineering Product Tariff Ratew.e.f 1st

August 2011Mica, including splittings; mica waste. ZEROUmbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-crops and parts thereof

ZERO

Articles of stone, plaster, cement, asbestos, mica or similar materials ZEROPig iron and spiegeleisen in pigs, blocks or other primary forms. ZEROFerrous products obtained by direct reduction of iron ore and other

spongy ferrous products, in lumps, pellets or similar forms; iron havinga minimum purity by weight of 99.94%, in lumps, pellets or similarforms.

ZERO

Ferrous waste and scrap ZEROGranules and powders, of pig iron, spiegeleisen, iron or Steel, Iron andnon-alloy steel in ingots or other primary forms

ZERO

Semi-finished products of iron or non-alloy steel. ZEROFlat-rolled products of iron or non-alloy steel, ZEROBars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloysteel

ZERO

Angles, shapes and sections of iron or non-alloy steel. ZERO

Wire of iron or non-alloy steel. ZEROStainless steel in ingots or other primary forms; semi finished productsof stainless steel.

ZERO

Flat-rolled products of stainless steel, ZEROBars and rods, angles, shapes, Sections, wires of stainless steel. ZEROOther alloy steel in ingots or other primary forms; semi finishedproducts of other alloy steel. Flat-rolled products of other alloy steel,Bars and rods, hot-rolled, in irregularly wound coils, wire of other alloysteel.

ZERO

Articles of iron or steel ZEROCopper-zinc base alloys (brass), (bronze) Copper waste and scrap,

alloys of copper, Copper powders and flakes, Copper bars, rods andprofiles, Copper wire, Copper plates, sheets and strip, of a thicknessexceeding 0.15 mm, Copper foil, Copper tubes and pipes, Copper tubeor pipe, Stranded wire, cables, plaited bands and the like, of copper,not electrically insulated.

ZERO

Nails, tacks, drawing pins, staples (other than those of heading 83.05)and similar articles, of copper or of iron or steel with heads of copper;screws, bolts, nuts, screw hooks, rivets, cotters, cotter-pins, washers

ZERO


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and similar articles, of copperTable, kitchen or other household articles and parts thereof, of copper;pot scourers and scouring or polishing pads, gloves and the like, ofcopper; sanitary ware and parts thereof, of copper and Other articles ofcopper.

ZERO

Nickel and articles thereof ZEROAluminium and articles thereof ZEROLead waste and scrap, Lead plates, sheets, strip and foil; leadpowders and flakes and Other articles of lead.

ZERO

Zinc waste and scrap, Zinc dust, powders and flakes, Zinc bars, rods,profiles and wire, Zinc plates, sheets, strip and foil & Other articles ofzinc. Tin and articles thereof

ZERO

Other base metals; cermets; articles thereof ZEROTools, implements, cutlery, spoons and forks, of base metal; partsthereof of base metal, Miscellaneous articles of base metal

ZERO

Nuclear reactors, boilers, machinery and mechanical appliances; parts

thereof

ZERO

Electrical machinery and equipment and parts thereof; soundrecorders and reproducers, television image and sound recorders andreproducers, and parts and accessories of such articles

ZERO

Railway or tramway locomotives, rolling-stock and parts thereof;railway or tramway track fixtures and fittings and parts thereof;mechanical (including electro-mechanical) traffic signalling equipmentof all kinds

ZERO

Vehicles other than railway or tramway rolling-stock, and parts andaccessories thereof

ZERO

Aircraft, spacecraft, and parts thereof ZERO

Ships, boats and floating structures ZEROOptical, photographic, cinematographic, measuring, checking,precision, medical or surgical instruments and apparatus; parts andaccessories thereof

ZERO

Clocks and watches and parts thereof ZEROMusical instruments; parts and accessories of such articles ZEROArms and ammunition; parts and accessories thereof ZEROFurniture; bedding, mattresses, mattress supports, cushions andsimilar stuffed furnishings; lamps and lighting fittings, not elsewherespecified or included; illuminated signs, illuminated name-plates andthe like; prefabricated buildings 94.01 Seats (other than those of

heading 94.02), whether or notconvertible into beds, and parts thereof.

ZERO

Medical, surgical, dental or veterinary furniture (for example, operatingtables, examination tables, hospital beds with mechanical fittings,dentists chairs); barbers chairs and similar chairs, having rotating aswell as both reclining and elevating movements; parts of the foregoingarticles.

ZERO

Mattress supports; articles of bedding and similar furnishing (for ZERO


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example, mattresses, quilts, eiderdowns, cushions, pouffes andpillows) fitted with springs or stuffed or internally fitted with anymaterial or of cellular rubber orplastics, whether or not covered.

Services

Under India-Japan CEPA, Indian professionals will be able to provide their services andcontribute towards further development of Japan's IT Sector. Japanese side has alsoagreed to conclude Social Security Agreement within a specified period (3 years). Theagreement under the service sector includes the following independent professionals:

- Accounting,- R& D Services,- Tourist Guide,-

Market Research; and- Management Consulting firms now can provide services in Japan.

Under the India-Japan CEPA, India will be benefited by Japanese investments,technology and world-class management practices that come with it. Japan can takeadvantage of Indias huge and growing market and resources, especially its humanresources.

CEPA will facilitate more investment flow from Japan to India as it provides anatmosphere conducive for Japanese companies to establish their manufacturing base inIndia. Contractual Service Suppliers (CSS), Independent Professionals (IPs) such as

Accounting, R& D Services, Tourist Guide, Market Research; and ManagementConsulting firms now can provide services in Japan. The Japanese side has agreed toconsider opening the market for nurses and caregivers for India.

Documents

CEPA India Japan