In an endeavour to boost India’s value-added exports, India and Japan are planning to sign an agreement, titled the Mutual Recognition Agreements (MRAs) on standards in certain trade sectors. Notably, most of the sectors that have been finalised so far such as telecom, electronic products and radio equipment have a significant presence of SMEs.

Incidentally, Indian exports to Japan mostly consist of raw materials. This development is expected to encourage Indian SME exporters of value-added products to explore business opportunities in Japan because the MRAs and adherence to them is likely to open up new markets for these products in Japan.

In 2008-09, bilateral trade between India and Japan stood at around US$12 billion and the two countries mainly trade in sectors such as textile, machinery and medicines, among others, all of which are highly SME concentrated sectors. Earlier in 2008, the Confederation of Indian Industry predicted that bilateral trade between the two countries would touch US$15 billion by 2010.