India inks economic partnership accord By Kazuaki NAGATA

 Japan and India signed a bilateral economic partnership agreement Wednesday that will strengthen ties with the fast-growing South Asian market of 1.15 billion people.

The EPA will remove tariffs on 94 percent of the bilateral total trade in terms of value, which was about ¥900 billion in 2009, within 10 years.

 Foreign Minister Seiji Maehara and Indian Commerce Minister Anand Sharma signed the agreement in Tokyo, making India the 12th country to sign a free-trade agreement with Japan.

 "The Indian market and economy are rapidly growing, and it is a very big, attractive market for Japanese firms. It's about accessing there," said Hidehiko Fujii, chief economist at Japan Research Institute.

 Rival companies from other countries are aggressively advancing into India, so the EPA will help Japanese firms compete, Fujii said.

 Once the EPA 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 agreement will benefit Japanese automakers in India — most notably Suzuki Motor Co., a dominant player in the Indian auto market — in procuring parts from Japan at lower costs.

 Meanwhile, the two countries failed to reach an agreement on labor issues. The Indian government has demanded Indian nurses and caregivers be allowed to work in Japan, which badly needs a larger labor force to support a rapidly aging society.

 However, Tokyo and New Delhi agreed to continue the labor talks in an effort to reach a conclusion on the issue within two years after the EPA takes effect. The Diet must first ratify the EPA before any implementation.

 The two countries also agreed to ease conditions in approving the import of generic drugs, which will benefit Indian drugmakers hoping to enter the Japanese market.

 The pact will also give India improved access to Japan's food market, especially items such as fruit, seafood, curry and tea.

 In total, the tariffs on 90 percent Japan's exports to India and 97 percent of India's exports to Japan will be abolished within 10 years.

 The EPA will also eliminate tariffs of Japan's export of DVD players, lithium-ion batteries and camcorders, all of which are currently slapped with a 10 percent tariff, within 10 years.

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