India and Japan agreed Friday to launch talks on an economic partnership agreement centered on lowering tariffs on bilateral trade, with Tokyo trying to make up for lost time as it tries to deepen business ties with India, whose economy is growing rapidly.
The talks will begin early next year, with the goal of wrapping up the pact by 2009, visiting visiting Indian Prime Minister Manmohan Singh and his Japanese counterpart, Shinzo Abe, agreed in Tokyo.
The two leaders sealed the agreement in a joint statement signed Friday at the prime minister’s office in Tokyo.
India, which has the third-largest economy in Asia, has enjoyed rapid growth in recent years. This year its GDP is forecast to grow by 8.1 percent.
Japan’s total trade with India totaled $6.5 billion in 2005, up 22 percent from the previous year. But trade rivals China and South Korea boosted their trade with India by about 40 percent each over the same period.
By value in 2005, Japan ranked a lowly 10th among India’s trade partners. Japan’s imports from India to date have mostly been traditional products, with precious stones and jewelry accounting for 25.1 percent of the total and seafood another 12.7 percent, according to the Foreign Ministry. Machinery is Japan’s largest export to India, at 24.5 percent of the total.
“Looking to the future, I believe the most important area in which we can build partnership is (in) the knowledge economy,” Singh told lawmakers in the Diet Thursday, stressing the importance of information technology, nanotechnology and biotechnology as promising areas for expanding bilateral economic ties.
On Friday, the two leaders agreed to hold annual summits, with Abe planning to visit India next year.
Abe has stressed importance of India as a strategic partner in Asia in light of Japan’s troubled relations with China and South Korea, which have been snagged in part over historical issues in recent years.
Meanwhile Abe dodged the question of whether Tokyo will tacitly endorse India’s nuclear weapons program, which is outside the Nuclear Nonproliferation Treaty. The U.S. last year gave a de facto approval to India’s possession of nuclear arms by signing a cooperation pact on civilian atomic technology, a move critics say violates the NPT.
“Countries that supply nuclear energy will discuss India’s cooperation with the U.S. on the international stage. Japan will actively take part in that discussion,” Abe told reporters at a news conference.