Indian textile exporters are expected to be among the main beneficiaries of a new trade agreement with Japan, which came into force today (1 August).

The Comprehensive Economic Partnership Agreement (CEPA) is one of the largest agreements ever signed by India, and sets the stage for free bilateral trade of goods and services between the two countries.

Under the pact, around 94% of the tariffs between Japan and India will be eliminated within 10 years. All items falling into customs categories 61 and 62 (knit and woven garments), including woven fabrics, yarns, synthetic yarn, and readymade garments are now duty free.

Talks on the CEPA began in November 2004 and were followed by 14 rounds of negotiations before the agreement was finally signed on Wednesday (16 February).

According to industry group the Apparel Export Promotion Council (AEPC), Indian garment exports to Japan are worth around US$125m a year, making India one of the country's top five apparel suppliers.

Shipments are almost equally divided between knitted and woven garments, with synthetic dresses the single largest category in terms of quantity and value.

AEPC chairman Premal Udani has said he believes India's garment exports to Japan are likely to rise by nearly 50% now that duty rates of around 11% no longer apply.

This is India's third Comprehensive Economic Partnership Agreement after Singapore and South Korea, and the most comprehensive so far.