The comprehensive economic partnership agreement between Japan and India went into force Aug. 1. It is Japan's 12th free trade agreement. In the field of FTAs, Japan is lagging its neighbor South Korea. The latter has already signed FTAs with the United States and the European Union. Its FTA with India went into effect in January 2010.
China, the world's second largest economy, is Japan's top trade partner, with two-way trade accounting for some 20 percent of Japan's total trade. Although India is Asia's No. 3 economy, following China and Japan, the Japan-India trade accounts for only 1 percent of Japan's total trade.
It is hoped that the new FTA will help promote the liberalization and facilitation of trade and investment between Japan and India. Japan can help improve India's infrastructure, which is relatively weak.