India has asked Japan to lower market barriers for its agricultural produce and pharmaceuticals and IT sectors, and open up the services sector as agreed under the bilateral free trade pact for further strengthening of trade and investment ties between the two countries.

Despite the Comprehensive Economic Partnership Agreement and the Mutual Recognition Agreements on accountancy and nursing services, access for Indian companies to the insurance sector in Japan and procedural visa-related issues for Indian professionals remain a matter of concern, India’s statement at the trade policy review of Japan at the World Trade Organisation this week said. India expressed hope that Japan will comprehensively look into the matter expeditiously

Trade policy reviews are an exercise mandated under the WTO agreements, wherein member countries’ trade and related policies are examined and evaluated at regular intervals by the multilateral organisation and its members. Although the observations and demands made by other members during the exercise do not have any binding influence on the country being reviewed, it puts into perspective how other members view the country as a trading partner and also highlights their expectations.

Commenting on Japan’s regulatory regime including technical regulations, standards and Sanitary & Phytosanitary (SPS) measures, India said that in many cases, these were more stringent than international standards, and continue to impact Indian agricultural exports. “The stringent maximum residual levels (MRI) for agricultural chemicals, chemical products and additives for food products are major entry barriers and add to the cost of our exporters,” the statement said.

A highly protected market

As per the WTO Secretariat’s Report on Japan, the agriculture sector remained highly protected with a maximum tariff of almost 500 per cent and Tariff Rate Quotas (TRQs) across 101 tariff lines. The specific market support to agriculture is double the OECD average.

India’s exports of shrimps, organic products, egg bi-products and mangoes continued to face market entry barriers, while agricultural products such as pomegranates and potatoes are also awaiting market access. “We would urge Japan to review the standards and measures to improve market access for Indian exporters by harmonising the standards to the Codex level,” the statement said.

New Delhi also made a case for removal of market barriers for export of steel, textile and carpets to Japan.

In pharmaceuticals, it remains difficult for Indian companies to enter Japan due to the stringent and cumbersome regulatory framework and the requirement to form joint ventures with Japanese companies. “The current pandemic demonstrates that easier access for Indian pharmaceutical companies in Japan will be a win-win outcome for both countries,” the statement said.

India said that Japan was an important economic partner for India with nearly 1,500 Japanese companies thriving in the country. Over a 100 Indian companies are contributing to growth and job creation in Japan. “Japan is also an important partner for our infrastructure projects, including various industrial and freight corridors, and high-speed rail and metro rail projects across the country,” it noted.

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