Economic Partnership between India and Japan – Comparative Trade and Sectoral Analysis

Abstract

India entered into an economic partnership with Japan in the year 2010 called CEPA with an objective to liberalize and facilitate trade in goods and services between both the nations. The Comprehensive Economic Partnership Agreement (CEPA) signed by India and Japan in 2011 was expected to boost bilateral trade in goods and services. Analysis of India-Japan trade relations reveal that India has ranked quite low in Japan‟s external trade profile. In 2014, India was nineteenth among Japan's export destinations and twenty fourth among import sources. The question thus arises whether CEPA has contributed to India's exports or the effect is negligible or in worst case negative since bilateral trade has fallen, there has been increase in trade deficit and even TII does not show any improvement. In the backdrop of this, the objective of this research paper is to study the existing levels of trade between India and Japan and assess the impact of CEPA on exports from India to Japan at the macro level as well as specifically for individual sectors over a time period of ten years, from 2007 to 2016. The paper tries to examine the effect of CEPA on various sectors too.