Japan and India broadly agreed Thursday to form a bilateral free-trade deal that would eliminate tariffs on 94 percent of exports from both countries in 10 years, Foreign Minister Katsuya Okada said.
The agreement, reached during the sub-Cabinet-level talks in Tokyo, comes ahead of the planned visit to Japan by Indian Prime Minister Manmohan Singh in late October, which is likely to be an opportunity for the two countries' leaders to ink the FTA.
If concluded, the accord would be the 12th such trade deal for Japan and the first since the Democratic Party of Japan-led coalition wrested power from the long-ruling Liberal Democratic Party in September 2009.
Negotiations for a Japan-India economic partnership agreement started in January 2007. An EPA goes beyond an FTA, which aims mainly to remove tariffs on goods and trade barriers for services, by also covering areas such as intellectual property rights and facilitation of human exchange.
Through the arrangement, Tokyo aims to stimulate Japan's economic growth by boosting exports of cars and auto parts to India, a market that has a population of 1.2 billion but accounts for less than 1 percent of Japan's total trade in value terms.
In the negotiations, Japan has asked for a reduction of tariffs on vehicle parts, its key export to India, while India is calling on Japan to simplify the approval procedures for the sale of generic drugs and to expand job opportunities for Indians hoping to work in Japan.