India is open to expanding the scope and scale of its trade agreement with Japan, Commerce and Industry Minister Piyush Goyal said during his visit to Japan. The two countries are looking at ways to modernise their Comprehensive Economic Partnership Agreement (CEPA)and make it more relevant to today’s economic environment.
The agreement, which was implemented in August 2011, has now been in place for around 15 years. Goyal said both sides recognise the need to make the pact more contemporary and create new opportunities for bilateral trade and investment.
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India and Japan Look to Modernise CEPA
The review of the existing agreement could potentially broaden cooperation across several areas of trade and investment.
Key priorities include:
● Expanding the scope of the trade agreement
● Addressing barriers faced by exporters
● Creating new market opportunities
● Increasing bilateral investment
● Supporting Japanese companies operating in India
● Strengthening supply-chain cooperation
● Making the agreement more relevant to current economic conditions
Goyal indicated that the terms of reference for a formal review have not yet begun, but discussions between the two sides have already taken place.
The trade discussions come alongside growing Japanese interest in expanding business operations in India.
Goyal said several major Japanese companies are keen to increase their presence in the Indian market. India is also seeking to support Japan’s ambition to double the number of Japanese companies operating in the country.
Potential areas for deeper cooperation include:
● Manufacturing
● Automotive industries
● Technology
● Semiconductors
● Artificial intelligence
● Infrastructure
● Research and development
● Global Capability Centres
The stronger investment relationship could complement efforts to expand bilateral trade.
India and Japan have also discussed the bilateral trade deficit. Goyal stressed that the composition of trade needs to be examined when assessing the imbalance, rather than focusing only on the headline deficit.
India is seeking greater opportunities for its exporters in the Japanese market while encouraging Japanese companies to use India as a manufacturing and investment base.
A New Phase in Economic Relations
The possible expansion of CEPA comes as both countries seek to deepen their broader economic partnership.
Areas of growing cooperation include:
● Foreign investment
● Manufacturing and localisation
● Technology partnerships
● Startup collaboration
● Supply-chain resilience
● Clean energy
● Digital technologies
● Skilled workforce development
A modernised trade framework could provide greater support for these emerging areas.
The existing CEPA has been in operation since 2011 and is being considered for an update.
An expanded agreement could create additional opportunities for businesses and exporters in both countries.
India wants to attract greater Japanese investment and encourage companies to expand their operations locally.
4. Stronger Economic Partnership
Trade and investment cooperation is becoming an increasingly important pillar of the India-Japan strategic relationship.
Piyush Goyal’s comments signal India’s willingness to broaden and modernise its trade partnership with Japan. With the existing CEPA approaching its 15-year mark, both countries have an opportunity to address current trade challenges while opening new avenues for investment, technology, manufacturing, and business cooperation. A broader and more contemporary agreement could give fresh momentum to the growing India-Japan economic partnership.
