Tokyo: Notwithstanding the Comprehensive Economic Partnership Agreement in place, India is facing market access problems in various sectors in Japan and concerns over this were articulated during the recent visit of Prime Minister Narendra Modi.
Its top business leaders conveyed the Indian concerns during a meeting with their counterparts under the framework of Japan-India Business Leaders Forum which later presented its report to Modi and Japanese Prime Minister Shinzo Abe.
At the same time, the Japanese side raised issues regarding transfer policy, taxation and the Goods and Services Tax (GST). "India has taken up some issues of access in Japan," leading Indian industrialist Baba Kalyani, who is the Co-Chair of the Forum, said.
Kalyani, Chairman and Managing Director of the USD 2.5 billion Kalyani Group of companies, was asked about the areas where access is a problem in Japan. He identified sectors like pharmaceutical, IT and manufactured products. Of the bilateral trade of USD 16.29 billion in 2013-14, the trade deficit was about USD 3 billion and the Indian side is keen to bridge it. At present, India's share is less than 1 per cent of total Japanese pharmaceutical market as Indian pharma companies face non-tariff barriers there.
According to industry experts, the CEPA, which has been in place since 2011, is benefiting Japan more. India's exports to Japan mainly includes petroleum, gems and jewellery, transport equipment and machinery, while imports include iron and steel, electronic goods, chemicals and metals. Holding out positive prospects for the future of bilateral economic relations, Kalyani said the Japanese businesses are "upbeat" since the Modi government came to power as they feel execution will happen at much faster pace.
"They are more optimistic in investing now," Kalyani said, citing his observation on the basis of interaction with the Japanese business leaders. Modi was on a visit to Japan from August 30 to September 3. Kalyani said the negative investor sentiment which prevailed in India for the past few years has now reversed and "They (Japanese businesses) all feel that with Modi leading the government, they will see execution happening at much faster pace. They are more optimistic in investing now."
With regard to outcome of the Japan-India forum meeting, he said a decision has been taken to form joint groups to take up some specific issues in the areas of infrastructure, energy, skill development, innovation and IPR related matters so that focused attention could be provided to them. "And let us say if bottlenecks are there, we can talk to the governments and set it right," he added.
Underlining the need for a result-oriented focussed approach of achieving things, Kalyani said the forum meeting discussed about clearances which were an issue earlier. "A lot was stuck in environment ministry. That is easing away," he said, adding "the bigger issue is taxation" and there should be clear transparent rules.
