India and Japan signed a free trade agreement February 16th, eliminating tariffs on 94% of goods between the two countries within ten years and making the two countries each other’s biggest free-trade partners. The two are now Asia's second and third largest economies after China. The deal comes as Japan looks to expand its markets and improve its competitiveness in relation to South Korea and China, reported the Wall Street Journal. India anticipates the Free Trade Agreement will not only increase its exports but gain the country access to cheaper imports. The FTA is Japan’s twelfth, reported the Journal of Commerce. Currently two-way trade between the two countries totals less than one percent of Japan’s total foreign trade.
At the same time Indian Trade Minister Anand Sharma also proposed to Japanese Prime Minister Naoto Kan a joint revolving $9 billion fund to help finance an industrial corridor between New Delhi and India’s financial capital, Mumbai. Japan and Japanese companies already have invested in the project, which started in 2007 and is expected to attract more than $100 billion in investments.
And two days later, India signed a FTA with Malaysia, reported Voice of America.
To learn more about FTAs, check out this webinar on Moving Beyond Global Sourcing to Trade Agreement Management.
