Prime Minister Manmohan Singh arrived here on Sunday as part of his tour of three East Asian countries.
The centrepiece of his stay in Japan will be the signing of a document that concludes negotiations on the Comprehensive Economic Partnership Agreement (CEPA). The other highlight will be the inking of a memorandum of understanding on easing the visa procedures.
Though the text of the 850-page CEPA has been frozen, it will not be signed during this visit because the agreement is yet to be scrutinised by the Japanese Cabinet Legal Bureau.
“It has to conform to our existing laws and other international agreements. Japan's EPAs with other countries are normally signed three to four months after finalisation of negotiations. This will take one to two months. These are necessary procedures. There is nothing political behind the delay,” a Japanese diplomat explained.
The omnibus EPA goes far beyond a Free Trade Agreement whose usual components are investment, goods and services. These components apart, the agreement covers facilitation of business environment and the rules of origin, which are used to determine the country of origin of a product for international trade.
“This will mark the economic alignment of the second and third largest economies of Asia. This is an important message it sends. That is why we say the conclusion of the EPA is the centrepiece of this visit,” Indian officials said.
More importantly, the CEPA will help India make inroads in to the areas of its strength: information technology and pharmaceuticals. It will ensure national treatment for Indian companies in registering drugs, making it easier for them to get over this barrier, a deterrent in most countries. For instance, Indian diplomats have for some time been trying without success to get Russia and Central Asian countries, both potentially lucrative markets, to ease registration norms.
The MoU on visa procedures is expected to facilitate the flow of people to both countries, with Japan expecting more Indian visitors. India will grant three-year work permit to Japanese businessmen, thus lessening the burden of executives applying every year for extension of their stay. “Time-wise, this will have an immensely positive impact,” Indian officials said. Together with the CEPA, easier visa procedures will help India make an impact in the Japanese IT sector.
Further discussions will be held on expanding defence and security cooperation under a defence framework agreement signed during Dr. Singh's earlier visit.
Officials also pointed to the political unanimity in Japan on developing closer ties with India. Pointers to that are two rounds of talks and the increasing frequency of joint military exercises, and the first round of 2 + 2 talks (involving the Defence and Foreign Secretaries). Japan has also pared down the list of Indian companies under the export control list.