The agreement is expected to boost bilateral trade between India and Japan by enhancing India's textile and apparel export to Japan, the world's third-largest export destination. The MoU between the Textiles Committee, under the Ministry of Textiles, and the Nissenken Quality Evaluation Centre of Japan will formalise mutual interaction.

The Union cabinet in its meeting held in September 2020, had given approval for signing the pact. However, there are several challenges related to stringent quality standards for exports to Japan. Although the Indian textile ministry is confident the pact will help in creating awareness on various quality parameters being sought by the importers based in Japan and extending hand-holding support to Indian exporters to adopt and upgrade their technology.

The main objective of the pact is to provide required support to textiles trade and industry for ensuring quality as per the requirement of Japanese buyers through testing, inspection and conformity assessment, training and capacity building, research and development, and consultancy.

Both institutions have agreed to share and exchange relevant technical information and documentation on a regular basis and carry out activities related to standards, quality assurance norms.

They will also share joint research projects on testing and development of user-friendly tools for dissemination of data to the industry and facilitate sourcing across the textiles value chain from both the countries.

India and Japan signed a Comprehensive Economic Partnership Agreement (CEPA) in 2011 which inter-alia facilitates import of garments from India to Japan at zero duty. Despite CEPA, the growth in trade in textiles and apparel between the two countries has been moderate. Japan is third-largest importer of textiles and apparel in the world and India is sixth-largest exporter, and there is huge untapped potential for trade that remains unharnessed.