Indian exporters have hailed the the signing of the landmark India-Japan Comprehensive Economic Partnership Agreement (CEPA) as the bilateral trade pact is likely to boost exports, particularly from the textile, pharma and service sectors.

Industry body FICCI said that the CEPA  between India and Japan would open up new market opportunities for Indian business in both goods and services.

"As the majority of Japan’s non-agricultural tariff lines would see immediate duty elimination for exports from India, with a strategic approach India could significantly improve its share in Japan’s total imports from the existing low level of 0.7 percent", FICCI Secretary General Amit Mitra said. As a result of the CEPA, India is expected to gain greater market access in Japan in textiles & garments, pharmaceuticals, marine products, organic and inorganic chemicals, he added.

"For example, India accounts for just over 1 percent of Japan’s textiles & garments imports worth $31 billion, while pharmaceuticals from India constitute a miniscule 0.06 percent of Japan’s import market. With Japan’s tariff set to become zero or substantially reduced for our exports, we are confident of doing far better," he said.

FIEO , the apex body for Indian exporters, also welcomed expeditious clearance proposal for registration of pharmaceuticals which was impeding the exports of pharmaceuticals despite cost competitive advantage availed by this sector.

"Elimination of tariff for textile sectors, shrimps, prawns, black tea, etc. will see quantum jump in their exports particularly of textiles as 15 percent  tariff , which will be eliminated in 5 years, was a major stumbling block and will add to competitiveness of this sector," said FIE) President, Ramu S. Deora.

Deora said that Japan is already investing in Indian infrastructure and this will be further accentuated with the signing of CEPA and help India which is looking for over a trillion dollar investment in infra over next 10 years. Abolition of tariffs on 94 percent of trade over 10 years will further facilitate economic engagement between the two countries while granting national treatment to both pre and post investment from Japan would accelerate investment in India, the FIEO chief added.

Industry body ASSOCHAM also welcomed the India-Japan economic agreement saying that it will hasten the process of economic activities between India & Japan and especially attract investment in Delhi Mumbai Industrial Corridor (DMIC).  The Chamber President Dilip Modi said, "The economic activities between the two countries is far below the potential, though their companies are investing in other countries."

India and Japan signed a bilateral economic partnership agreement Wednesday that will remove tariffs on 94 percent of the bilateral total trade in terms of value. In total, the tariffs on 90 percent of Japan's exports to India and 97 percent of India's exports to Japan will be abolished within 10 years.

Once the CEPA takes effect, it will immediately eliminate tariffs on India's exports of nearly all steel-related products to Japan, while those on Japan's exports of similar products to India will be abolished within five years. The two countries have also agreed to ease conditions in approving the import of generic drugs, which will benefit the Indian pharmaceutical companies hoping to enter the Japanese market.

According to FICCI, the India-Japan trade pact will also help service exports from India as Japan is a net importer of services accounting for 4.7 percent of worldwide imports.

"With Japan agreeing to provide liberalized access for Indian professionals and service providers in areas such as teaching of English language, yoga, Indian cuisine, classical music and dance, architecture, urban planning, engineering, R&D and technical testing, accounting, advertising, market research, IT, management consultancy, tour operating and tourist guide services,  India stands to benefit in services," FICCI said.