India, Japan close to nuke deal; to ink trade deal in February

NEW DELHI - India and Japan are set to sign a landmark free trade area pact next month and are inching closer to concluding a civil nuclear cooperation pact soon, Japan’s ambassador to India Hideaki Domichi said here Monday.

The two countries are all set to sign a Comprehensive Economic Partnership Agreement (CEPA) in Tokyo in mid-February, the Japanese envoy said.

He was interacting with reporters on the sidelines of a function at which former Japanese prime minister Yukio Hatoyama announced that an India-Japan Global Partnership Summit would be held in Tokyo Sep 5-7 to deepen relations between the two countries.

The CEPA, which is broader than a free trade agreement as it also includes steps to promote greater investment and addresses intellectual property rights, will cut down or eliminate tariffs on over 90 percent of the $10.4 billion bilateral trade covering around 9,000 products, ranging from steel, apparel and pharmaceuticals to capital goods.

The pact will go a long way in addressing the balance of trade which is heavily in favour of Tokyo. In 2009-10, India’s exports to Japan stood at a mere $3.63 billion while its imports were almost double at $6.73 billion.

Defying non-proliferation hawks, the envoy indicated that negotiations for concluding a civil nuclear deal are on track and can be wrapped sooner rather than later.

“We have been negotiating a nuclear deal for sometime… we are getting closer to it,” the envoy said. Asked if the pact could be signed this year, he asserted that there was political will on both sides to wrap up the negotiations as quickly as possible.

Hatoyama also said that the two countries will soon be concluding a civil nuclear cooperation agreement.

“Japan and India have come to a stage of concluding the nuclear cooperation agreement,” he told media persons.

“We clearly recognise the opportunities for the Japanese industry (in the Indian nuclear market) we also know that Japanese technology is essential for everybody,” Domichi replied when asked if India’s stand on the Nuclear Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT) was coming in the way of an early conclusion of the accord.

The two sides have exchanged draft texts of the proposed nuclear agreement and are making progress on bridging differences since they launched nuclear negotiations in July last year. Japan has urged India to ratify the Comprehensive Test Ban Treaty (CTBT) and has made it clear that in case of a pact, a nuclear test by India would lead to the termination of civil nuclear cooperation.

Given its history as a nuclear-averse pacifist nation and strong anti-nuclear domestic constituency, Japan is insisting on additional non-proliferation commitments, which are understood to go much beyond what India has agreed to in its 123 agreement with the US, said the sources.

However, Japan has decided to accelerate nuclear negotiations with India as it does not want to be upstaged by Seoul, a regional rival, which has not only concluded a bilateral civil nuclear pact with India but also signed a CEPA with the country.

A nuclear pact between India and Japan is also essential for American and French companies to enter the Indian nuclear market. Nuclear majors like GE Hitachi and Toshiba-Westinghouse cannot sell nuclear plant technology to India without formal Japanese approval.

Speaking about the summit, Hatoyama said its purpose is to promote collaboration in socio-economic and cultural sectors between the two nations.

“The India-Japan Global Partnership Summit 2011 is a summit of two civilizations aimed at enhancing socio-economic, cultural and spiritual bonding between the two nations. India and Japan share a global vision of peace, stability and sustainable development. It is important to manifest these values in action on a global platform,” he said.

The three-day summit will include an India-Japan Expo and five concurrent forums including business forum, academic forum, youth and cultural forum and forum of non-governmental initiatives.

The summit will focus on sectors such as agriculture, energy, manufacturing, healthcare, banking, information and communication technologies.