As a result, India and Japan have a similar structure, particularly in terms of their dependence on the services sector. In recent years, the two countries have strengthened bilateral relations through new initiatives and programmes ranging from economic and cultural ties to defence and security ties. 2007 was also officially celebrated as the year of friendship between the two countries. Japan spends 30% of its official development assistance (ODA) on India and remained engaged during the global economic downturn. For example, Japan has provided nearly $4 billion for the Delhi-Mumbai Industrial Corridor (DMIC). The Comprehensive Economic Partnership Agreement (CEPA) between India and Japan was signed on 16 February 2011 and came into force on 1 August of that year. In addition to accelerating activity, the agreement aimed to eliminate tariffs on 90% of Japanese exports to India, such as auto parts and electrical equipment, and on 97% of imports from India, including agricultural and fisheries products, by 2021. Since the introduction of the EPA, trade between India and Japan has increased by 38%, with bilateral trade expected to reach $24 billion by March 2013. In accordance with the agreement, Mukhopadhyay and Bhattacharyay (2011) assessed the macroeconomic impact of trade integration between Japan and India on the basis of the analysis of the Global Trade Analysis Project (GTAP). It was found that production for both India and Japan would increase slightly in 2020, after a reduction in tariffs, compared to business as (BAU). The results were expected of marginal export growth, adequate value-added in trade and an improvement in the well-being of both countries by 2020, with the successful implementation of the EPA. In the context of the global recovery and the two countries trying to increase trade and exports, a document on Indojapo`s trade relations as well as analysis of services, investment and other areas of cooperation in the signing of the Economic Partnership Agreement (EPA) would be important to highlight the problems faced by the two countries and propose measures to promote trade and investment between them.
The agreement had two main concerns: infrastructure in India and non-tariff barriers in Japan. In 2006, the two countries agreed on the massive $90 billion Delhi-Mumbai Industrial Corridor (DMIC) project. The central agenda of the DMIC project includes the development of nine industrial zones; A high-speed freight line; Three ports; six airports; a six-lane highway without a crossing; and a 4000-megawatt plant. The project agreement looks promising in the context of the new production policy, which aims to increase the share of manufacturing in GDP to 25% within a decade, which could create 100 million jobs. For the purpose of applying preferential tariff treatment under the Comprehensive Economic Partnership Agreement between Japan and the Republic of India (hereafter referred to as the agreement), a certificate of origin is in principle required at the time of the import declaration. The process of globalization has allowed global economies to share the fruits of free trade, labour migration, capital flows and technology transfer. The importance of trade has been studied as part of the theory of endogenous growth, where it has crystallized with other traditional inputs as one of the peripheral factors of economic growth. In order to strengthen international trade, many studies have, over time, empirically examined different trade theories and developed appropriate strategies. The invention of modern trade theory has highlighted the role of comparative advantage (branch trade) and differentiation of production (intra-enterprise trade) as the basis for trade patterns.