Japan, India EPA entering into force on August 1, 2011

On June 30, 2011, Ministry of Economy, Trade and Industry (“METI”) and Ministry of Foreign Affairs (“MOFA”) in Japan announced on their press release that Japan and the Republic of India exchanged diplomatic notes concerning the entry into force of the Comprehensive Economic Partnership Agreement (“EPA”). Accordingly, the EPA between Japan and India enter into force on August 1, 2011. This EPA is Japan’s 12th EPA that enter into force and expected to liberalized and facilitate trade, promote investment, and improve systems in related field of both countries. Tariffs on approximately 94% of total trade will be abolished between the two countries within 10 years after implementation of the EPA.



The tariff concession schedule is available in METI web site as “Annex 1:　Schedules in relation to Article 19” which shows preferential tariff rate of applicable item agreed in this EPA. Traders are encouraged to examine whether the HS code of trading goods are covered in this EPA. We would like to give caution some operational aspects in making use of this Japan-India EPA in following points.


 Rule of Origin (“ROO”) requirement in General Rule

In verification of eligibility of origin of goods, the Japan-India EPA ROO have General Rule and Product Specific Rules (“PSR”). The goods except those in the PSR list must satisfy the General Rule in order to qualify for the Japan-India EPA preferential tariffs. Under the general rule, the qualification of origin is described as "CTSH (change in HS code at the 6-digit level) and local content of not less than 35%”. The “and” indicates that both criteria must be satisfied for the goods to qualify for preferential tariff. This ROO may be operational challenge for traders, as all other EPAs Japan have implemented have rule of “either” HS code change or local value content percentage.


 GSP tariff is no longer available in importing Indian items into Japan

Under the Generalized System of Preferences (“GSP”), GSP preferential tariff has been available to use to Indian origin items in importing into Japan. Upon implementation of Japan-India EPA, basically GSP tariff is not applied to Indian origin items except the case GAP tariff is lower than EPA tariff. Traders who have made use of GSP tariff in trade with India need to take care of the lose of validity of GAP scheme with India upon August 1, 2011. In addition, type of Certificate of Origin (“CO”) is different, GSP require form A, but the Japan-India EPA require the designated CO format called “IJCEPA”. In import declaration in Japan, CO type form A cannot be used for claiming the preferential tariff of EPA.


 Other technical notes in Japan-India EPA.

1. HS code: HS2007 version
2. Third Country Invoice: Available to use. Need to fill in Field 7 and 8 on CO form IJCEPA.
3. For the import of the goods which value are under JPY200,000 into Japan, the CO submission to Customs can be exempted in claiming EPA preferential tariff.

(Reference:  Japan - India EPA tariff staging chart:  http://www.customs.go.jp/kyotsu/kokusai/gaiyou/india/india_staging1108.pdf )