The comprehensive free trade pact between India and Japan has come into force from Monday, a move which will boost bilateral trade between the countries to USD 25 billion by 2014.
The Comprehensive Economic Partnership Agreement (CEPA) will bring immediate gains to exporters of textiles, seafood and spices to Japan, as duties on these products would be eliminated.
It would ultimately result in the removal of duties on almost 90 per cent of the products traded between the countries.
Other sectors that would gain from the pact include agricultural products like mangoes, citrus fruit, spices and instant tea, spirits, chemicals, cement and jewellery.
Indian professionals are set to make strong gains under the CEPA, which is the country's third such pact with any country, after Singapore and South Korea, and the first with a developed nation.
"The CEPA comes into force with effect from today. It will be good for commerce, trade and investment both for India and Japan. It is a part of the building bloc for much large agenda for building a comprehensive economic partnership for East Asia, which covers Asean, China, Korea, Japan, India, Australia and New Zealand," Commerce Secretary Rahul Khullar told reporters here.
Japanese Ambassador Akitaka Saiki said the business communities of the two countries should make the best use of this arrangement.
"This arrangement will definitely facilitate both ways flows of trade and investment," Saiki said.
Under the CEPA, duties will be brought to zero in 10 years on 66.32 per cent of the products traded between the nations.
The exclusion list of Japan (where no duty concessions are proposed) mainly consists of items such as rice, wheat, oil, milk, sugar, leather and leather products.
On the other hand, India will not reduce duties on sectors like auto and agriculture.
Further, the Japanese government shall accord no less favourable treatment to the applications of Indian companies than it accords to the like applications of its own persons for drug registration. This will greatly help Indian pharmaceutical companies.
An official statement said that Indian professionals will be able to provide their services and contribute toward further development of Japan's IT sector.
Furthermore, as part of the agreement, contractual service suppliers and independent professionals engaged in accounting, R&D services, tourist guide and market research and management consulting, now can provide services in Japan.