FTA: Japanese cos wont get spl treatment on govt buys

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Aug 31 2010, 05:58am hrs
India has refused to make government procurement a part of the free trade agreement (FTA) talks with Japan. According to commerce ministry sources, Tokyo has been nudging India since the talks began in 2006 to make GP a part of the FTA under which Japanese companies would get favourable treatment to bid for government purchases.

As per the negotiations, India has argued that since it is not a signatory of Government Procurement Agreement at WTO it was not in a position to make far-reaching promises to Tokyo.

Since India has not signed the GPA we cannot give special preference to Japanese companies on government procurement, a senior government official said who did not wish to be named.

There are no more obstacles in sight for the signing of the FTA with Japan. It will be a win-win situation for both the countries, the source said. He said that the FTA with Japan is at the last stage of its ratification and is expected to be signed when Indian Prime Minister Manmohan Singh visits Tokyo in December this year.

Indias refusal to Japan on the GP could have ramifications on its negotiations with other countries as well. It is understood that even EU has pushing India to liberalise its GP market to allow foreign firms.

Recently in a Ficci organised conference in the capital, additional secretary of the commerce ministry DK Mittal had suggested setting up a task force on helping Indian companies identify the opportunity in the global government procurement market which is worth a whopping $3 billion. Mittal urged the industry to give their inputs on the matter.

Meanwhile, Japan has agreed to give national treatment to Indian generic drugs for approvals. Earlier Japan had opposed tooth and nail to give the national treatment status to Indian generic drugs...the standards that drugs have to follow in Japan is very rigid. All that could change now, the source said.

According to him the approval process in Japan is very stringent which could irk some Indian companies. The generic drug market in Japan is next only to the US.

Trade between the two countries has increased four-fold in as many years to $11 billion in 2008-09.