As Tokyo's three day courting of Indian leader Manmohan Singh comes to an end Tuesday and Singh prepares to leave Japan for Malaysia and thereafter Hanoi in Vietnam for the India-ASEAN as well as East Asia summits, the Indian premier must certainly be feeling that the annual Japan- India summit was a job well done.

India's Prime Minister Manmohan Singh (L) and Japanese Prime Minister Naoto Kan attend a joint news conference in Tokyo Oct 25, 2010. Japan and India pledged closer strategic ties between Asia's second and third biggest economies in talks on Monday.[Agencies]

Japanese Prime Minister Naoto Kan and his Indian counterpart brought to an end almost four years of talks on a free-trade agreement between the two nations and reached a formal accord on a bilateral economic partnership, which will vastly liberalize trade and investment.

The announcement of the conclusion of the Comprehensive Economic Partnership Agreement (CEPA) between Tokyo and New Delhi described a deepening, strategic global partnership between Japan and India that will see a wide range of tariffs on products ranging from car components and electronic goods to bonsai plants and food products abolished.

Indeed, commentators maintain that the move is far broader than a free-trade agreement, and that the CEPA is indeed more akin to a comprehensive pact on economic and trade cooperation that also includes actively promoting bilateral investments, which aside from financial provisions will also afford India the opportunity to send more workers to Japan.

Singh described the deal, pegged to be signed at the end of the year and submitted to the Diet early next year for ratification, as an historic achievement that signals the economic alignment of two of the largest economies in Asia. He added that the move will act to open up new business opportunities and lead to what he described as a "quantum increase" in trade and investment flows between the two countries.

Strategic ambitions

The CEPA will effectively do away with tariffs on 94 percent of two-way trade in 10 years after the pact takes effect.

The tariffs to be abolished include those on Indian exports of car components, DVD players, video cameras, peaches and strawberries to Japan, while Japan would improve access to most industrial products, as well as durian, curry, tea leaves and shrimp.

As well as the two countries inking a memorandum of understanding on visa simplification aimed at increasing tourism, educational exchanges and, somewhat pertinently from Japan's stance, the deal also covers areas such as intellectual property rights and the facilitation of human exchange.