India Exim Bank’s study titled “Prospects for Enhancing India Japan Trade Relations” was released at the hands of Shri. Dammu Ravi, Secretary [Economic Relations], Ministry of External Affairs, Government of India; in the virtual presence of – H.E. Mr. Sanjay Kumar Verma, Ambassador of India to Japan, Mr. Shingo Miyamoto, Minister (Economic & Development), Embassy of Japan in India, Ms. Harsha Bangari, Managing Director, India Exim Bank and Mr. N. Ramesh, Deputy Managing Director, India Exim Bank during a webinar titled “India-Japan Economic Partnership: Trade and Beyond” on October 08, 2021, hosted by India Exim Bank.
The study notes that over the past decade, India’s total trade with Japan has increased from US$ 10 billion to almost $ 18 billion, with exports valued at US$ 5 billion and imports US$ 13 billion in 2019. However, despite having a Comprehensive Economic Partnership Agreement (CEPA) with Japan, India has been running a persistent trade deficit with Japan, which has more than doubled during the decade, to almost US$ 8 billion in 2019. The Study, through the trade complementarity analysis, recommends suitable product categories in which India has a latent advantage in exports. The study suggests that there is significant potential for India’s exports in categories such as mineral fuels and oils, electrical machinery and equipment, machinery and mechanical appliances, optical, photographic equipment, pharmaceutical products, articles of apparel and clothing, etc.
The study also highlights that India’s exports face both tariff and non-tariff barriers in Japan and suggests that in the subsequent CEPA review negotiations India could deliberate upon these issues.
Further, the study observes that the potential for India-Japan relations extend beyond the sphere of bilateral trade. India and Japan have aimed at coordinating India’s “Act East” policy and Japan’s vision of a free and open Indo-Pacific. This policy coordination had given birth to the idea of Asia-Africa Growth Corridor (AAGC), which is a megaregional program aimed at improving ties between Asia and Africa.
Mr. Harsha Bangari, Managing Director, India Exim Bank in her address highlighted that India and Japan have been enjoying a strong and cordial relationship. Japan has been one of the most important economic partners for India in its development story. The panelists deliberated upon the issues and, current and future prospects for enhancing India’s engagements in and bilateral trade with Japan, in diversified areas such as- collaboration and financing joint projects, India-Japan CEPA, Asia- Africa Growth Corridor, among others.