Exporters to gain from Japan rebuilding, economic pact

Japan's rebuilding would be a huge opportunity for Indian exporters across sectors. While the tariff cuts on goods under the India-Japan economic pact, which is expected to be operational by September 2011, would help boost Indian exports, New Delhi might not opt to wait for that to give an impetus to trade with the calamity-stricken country. 

As Japanese firms are looking at less expensive and easy imports to meet the sudden rise in demand for a variety of goods and services, Indian exporters are pulling up their socks to seize the opportunity. Sectors like pharmaceuticals, automobile parts and components, engineering goods and chemicals are the ones that are sure to benefit from increased demand. Japan is also expected to enhance its use of professional services from India in areas such as paramedical, educational and IT.

Commerce secretary, Rahul Khullar told FE that opportunities in pharmaceuticals and services would be the most lucrative ones for Indian exporters as far as the Japanese market is concerned.

According to the industry estimates, the bilateral trade between the two countries is expected to double in 2-5 years, thanks to the India-Japan Comprehensive Economic Partnership Agreement (CEPA). The pact is also expected to give a boost to bilateral investments and integrate, to an extent, the production networks of the two countries. “Japan is a very lucrative export market and we expect the trade between the two countries to double in the near future,” said Ficci director-general Rajiv Kumar.

Currently for India, Japan is a “relationship market” and officials say that in areas like pharmaceuticals and manufacturing where earlier Indian players were not reckoned very seriously by potential Japanese buyers could now change this outlook. Reconstruction of Japan is estimated to cost over $180 billion.

Expressing similar sentiments, PV Appaji of pharma export council said the Indian pharmaceutical exports to Japan would increase significantly, thanks to the bilateral free trade agreement signed recently. “Japan is a small market now. But we expect Japan to take about 5% of the total pharma exports in three to four years,” he said. Currently, the Japanese pharma market is pegged to be around $80 billion. However, the share of generics is one of the lowest in this highly regulated market and stands at $8 billion. This could change as the government there has vowed to increase generic penetration to 30% of the total market by 2013 to reduce healthcare costs.

A government official said export of professional services such as IT, yoga, teaching,engineering, medical and paramedicals, are bound to get a boost as Japan rebuilds itself. “Sectors like automobile parts and components, engineering goods, and chemicals are some of the products that Japan might source from India,” said CII president B Muthuraman.

Share this:
Tags:

About Jessica Priston

Ut tellus dolor, dapibus eget, elementum vel, cursus eleifend, elit. Aenean auctor wisi et urna. Aliquam erat volutpat. Duis ac turpis. Integer rutrum ante eu lacus. Vestibulum libero nisl, porta vel, scelerisque eget, malesuada at, neque. Vivamus eget nibh. Etiam cursus leo vel metus. Nulla facilisi. Aenean nec eros.

  • Website
  • Google+
  • Rss
  • Pinterest
  • Instagram
  • LinkedIn
  • Vimeo
  • Youtube
  • Flickr
  • Email

Related News

  • Prada opened freestanding store in Osaka

    Luxury giants Prada opened its first freestanding store in the Japanese city of Osaka on Monday. The store is spread across five levels and 16,145 square feet. The store will stock Prada’s men’s and women’s ready-to-wear lines, l

  • Prada opens new store in Tokyo Japan
    Prada opens new store in Tokyo Japan
    July 01, 2014 5:50 am

    Prada has this week opened a new store in Tokyo, Japan. Located in Ginza’s Chuo Dori St, the new store comprises of: men’s, women’s ready-to-wear, accessories and leather-wear sections over three floors and 1,000 sqm. At pre

  • Louis Vuitton to unveil revamped Matsuya flagship in Ginza

    Louis Vuitton is to unveil its revamped Matsuya flagship in Ginza, Japan next week. "We\'ve never ignored Japan, even with the rise of China. Japan has always been a top market," Michael Burke, chairman and chief executive, told WWD duri

  • Rakuten to introduce cheap smartphone service in Japan

    Japanese e-commerce brand Rakuten Inc has announced it will launch a budget smartphone service that costs roughly a third of the standard monthly fees that Japan’s three main operators charge, in a move that will intensify price competition.