TOKYO, June 16: India said on Thursday it hoped to strike a free-trade agreement with Japan by year end as the countries said they would encourage smaller Japanese businesses to invest in manufacturing.Visiting Indian Minister of Commerce and Industry Kamal Nath expressed confidence at developing stronger trade ties with Japan, which has invested far more in closer neighbour China.

“I think by the end of the year we should be able to put an economic partnership agreement with Japan in its place,” Nath told reporters at the World Economic Forum for East Asia underway in Tokyo.

He said he was confident on reaching a partnership, which would include a free-trade agreement, even though the two countries have not launched negotiations on the deal, which remains in the study stage.

India, whose star export industry has been services, is seeking the development of its manufacturing base, which has been a cash cow for China.

He signed a largely symbolic agreement with his Japanese counterpart Toshihiro Nikai to encourage small-and medium-sized Japanese businesses to invest in Indian manufacturing.

“Technology and innovations of Japan and skilled workforce of India form the win-win situation for both countries,” Nath said.

Japan is the fourth largest foreign investor in India and has been looking to improve ties with New Delhi amid strained political relations with China on wartime memories. Japan has been pursuing free trade pacts to secure access to raw materials and markets for its exports amid a deadlock in global trade talks.—AFP