Despite India’s hope of concluding the Indo-Japan free trade agreement (FTA) in the next round of talks in New Delhi in September this year, there still remains a whole gamut of unresolved issues concerning market access for Indian exports to Japan.

According to sources in the Ministry of Commerce and Industry, there are several tariff as well as non-tariff barriers on export items of India’s interest — primarily agricultural items and services — which make it difficult for these items to penetrate the Japanese market.

Though India’s trade with Japan has more than doubled over the past four years from about $4 billion in 2003-04 to almost $10 billion in the last fiscal, Japan’s tariffs for a lot of agricultural commodities have remained high. The average applied MFN (most favoured nation) tariff for agricultural products stands at 18.8 per cent as compared to the overall average tariff of 6.5 per cent.

Many sub-sectors such as oilseeds, dairy products, sugar and sugar products face are subject to tariff peaks, that is, tariffs three times as high as the average.

Also, Japan’s tariff rate quotas — specified zero-tariff quotas for different commodities — for Indian goods cover only 1.7 per cent of the entire trade basket. While tariff barriers may be a cause for worry, the greater problem, perhaps, is the innumerable non-tariff barriers that pose a real threat to unobstructed trade with Japan. In terms of standards and technical regulations, Indian goods often find it difficult to meet the requirements of the technologically slick Japanese certification authorities, which are fast aligning with international standards.

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