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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Singapore Asia Pacific World Japan, India sign free trade pact AFP - Wednesday, February 16 Send IM Story Print TOKYO (AFP) - – Japan and India signed a free trade pact Wednesday under which the high-tech nation and the South Asian giant pledged to scrap tariffs on 94 percent of goods within a decade. Japan's Foreign Minister Seiji Maehara and Indian Commerce Minister Anand Sharma signed the deal in Tokyo, hoping it will boost two-way trade which totalled 900 billion yen ($10.7 billion) in 2009 -- less than one percent of Japan's total foreign trade. "We have no doubt in our minds that this will usher in a new era of economic engagement, which will bring development, innovation and also prosperity in both societies," said the Indian commerce minister. The trade and investment agreement, approved in principle by both countries' leaders last year, aims to open new markets for Japan as its population ages and shrinks, and to fuel the rapid growth of emerging power India. It will help Japanese auto makers such as Suzuki by lifting tariffs on car parts shipped to its factories in India, and ease access for Indian generic drug makers to a lucrative market in fast-greying Japan. India -- which has already signed a free-trade deal with South Korea, Japan's export rival in autos and electronics, but not with China -- will become Japan's 12th free trade partner. The agreement, for which Japan hopes to gain legislative approval in the Diet by the summer, will immediately reduce Japan's tariffs to zero on almost all industrial products imported from India. Tokyo also plans to scrap duties on some foodstuffs -- including curry ingredients, pepper and tea -- within 10 years, but will maintain a high tariff wall to protect its politically sensitive rice sector. India will cut trade barriers on auto parts gradually, as well as on Japanese steel, electronics and machinery products, eventually to zero. But the South Asian giant, with booming auto sales to its growing middle class, will maintain tariffs on assembled vehicles. A Japanese government official said: "India obviously wants to protect its own auto industry." India will also ease access to Japanese single-brand companies, allowing them controlling stakes of 51 percent in local entities, and giving them the right to set up franchises in India. But in other sectors, the two countries only agreed to continue talks. Japan, which tightly controls immigration, has so far failed to meet India's wish to send nurses and caregivers to Japan, where almost one in four people is aged over 65 and the aged-care sector is suffering labour shortages. Another key deal sought by New Delhi, on civilian nuclear cooperation, also still remains beyond reach, Japanese government officials said. Japan and India launched negotiations in June on a pact that would allow Tokyo to export its cutting-edge nuclear technology to the energy-hungry South Asian nation, a hotly contested market for atomic plants. But Japan -- the only country to have suffered atomic bombings, and a key voice in global denuclearisation efforts -- is concerned because nuclear-armed India has not signed the Nuclear Non-Proliferation Treaty. 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