Industry seeks tariff removal by Japan ahead of PM visit this week

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New Delhi, Oct 19 (UNI) An industry chamber has sought immediate tariff elimination by Japan on export of leather, footwear, textiles, marine, chemicals and animal products from India ahead of Prime Minister Manmohan Singh's visit to Japan this week.

Federation of Indian Chamber of Commerce and Industry said Indian exports are not getting adequate market access in Japan due to its high tariffs as a result of which India's share in Japan's imports has stagnated at around 0.6 per cent for the last five years.

FICCI said although the average applied tariff in Japan is 5.1 per cent but there are products on which it imposes tariffs over and above 400 per cent which restricts Indian exports to Japan.

''These tariffs need to be eliminated immediately under the India-Japan Comprehensive Economic Partnership Agreement (CEPA).

The immediate duty elimination by Japan on these products under the CEPA will give an edge to Indian exporters in Japanese market and could double its share in the next five years,'' said FICCI Secretary General Amit Mitra.

India and Japan have been negotiating CEPA for more than three years and it remains to be seen if the agreement will be ready when the Prime Minister visits the land of rising sun.

India's exports to Japan are way behind China's exports that has a share of 20.6 per cent in Japan's import. Chinese imports into Japan have more than doubled since 2002 and have shown a remarkable increase from 61.8 billion dollars in 2002 to 128 billion dollars in 2007.

India's share in Japan's imports has been hovering around a meager 0.6 per cent from 2002 to 2007, although in value terms Japanese imports from India have doubled from 2.1 billion dollars in 2002 to 4.2 billion dollars in 2007, according to a FICCI analysis.

But India's share in Japanese imports is much less than the share of most other Asian countries. Korea 's share is 4.4 per cent, Indonesia's 4.3 per cent, Thailand 3 per cent and Malaysia 2.8 per cent, the industry chamber said.

FICCI pointed out that Japan has zero duty on around 30 per cent of its chemical and pharmaceutical products but still the share of India in Japan's drugs and pharmaceutical market is an insignificant 0.1 per cent due to number of stringent approval and product registration requirements that act as non-tariff barriers.

India exports 3.8 billion dollars worth of drugs and pharmaceuticals to the world, but exports to Japan are a meager 8.2 million dollars.

Similarly, the industry chamber noted that India has a very small share of 0.67 per cent in Japanese imports of apparel and clothing, while China dominates the market with a share of 84 per cent.

Out of 9.4 billion dollars worth of exports of apparel and clothing by India, only 1.1 per cent goes to Japan. One of the reasons for such low exports by India are the complex tariff structure maintained by Japan, involving significant tariff peaks and tariff escalation in textiles and clothing, FICCI said.

''There is a huge untapped potential between India and Japan which needs to be fully harnessed and our bilateral economic engagement needs to be diversified. Japan has advantages in terms of capital, technology and product development that Indian industry is looking forward to leverage under this CEPA negotiations,'' said Dr Mitra.

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