Saturday, December 31, 2011

Japanese Prime Minister’s India Visit: Tokyo-New Delhi Hold Annual Summit

Japanese Prime Minister Yoshihiko Noda has paid a visit to India. During his stay he met his Indian counterpart Manmohan Singh. After the meeting he said that Japan could contribute to India’s rapidly growing manufacturing sector. A total of 421 Japanese companies have established their presence in India and created 150,000 jobs.
India and Japan need to establish firm partnerships and enter a new era of economic cooperation to capitalize on mutual complementarities, Noda said while addressing the joint business forum organized by industry chambers Associated Chambers of Commerce and Industry of India (ASSOCHAM), Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI).
Commerce and Industry Minister Anand Sharma said both countries need to work closely to address current global challenges and have a defining influence in Asia and beyond. The two-way trade can reach a level of US $25 billion by 2014, up from $13.82 billion in 2010-11.
Sharma said Japanese firms have a major opportunity in India’s infrastructure and manufacturing. The country plans to invest $1 trillion in the 12th Five-Year Plan (2012-17) to build infrastructure.
The Delhi-Mumbai industrial corridor and dedicated freight corridor are the most ambitious infrastructure projects conceived so far which will have integrated townships. At the same time, the national manufacturing policy aims to boost production in sectors like electronics hardware, information technology, agro food processing and green power technologies. The Japanese government is committing $4.5 billion for implementation of this project.
Steady Progress in Relations
The meeting between Prime Minister Manmohan Singh and his Japanese counterpart Yoshihiko Noda, the sixth of the annual India-Japan summits, is a marker of the steady progress. It yielded the first official confirmation since Japan's devastating tsunami-earthquake-Fukushima meltdown that the country has not shut the door on a civilian nuclear deal with India. While Noda stressed the importance of learning the right lessons from Japan's nuclear accident, it appears that negotiations on a deal to assist India develop peaceful nuclear energy will continue.
The Japanese prime minister’s pledge of $4.5 billion over the next five years for the development of the Delhi-Mumbai Industrial Corridor, a commitment of financial assistance for two more infrastructure projects — Phase 3 of the Delhi Metro and a biodiversity conservation project in West Bengal — and his interest in sharing high-speed railway technology with India are significant.
Currency Swap Arrangement
During the Japanese prime minister’s stay, New Delhi and Tokyo have agreed to a $15 billion currency swap line, in a positive move for the troubled Indian rupee, Asia's worst performing currency this year.
India and Japan previously had a $3 billion swap arrangement that expired in June, said the official, speaking on condition of anonymity.
The currency swaps are expected to support the Indian rupee as it continues to weaken against the greenback and Europe's sovereign debt crisis hits India's exports. The dollar-swap arrangement with India follows a similar agreement with South Korea in October.
New Beginning Intensified
Noda's India visit started a year of intense bilateral activity. The foreign ministers of the two countries held a strategic dialogue in October, followed by talks between the defense ministers. In February, the two countries signed the Comprehensive Economic Partnership Agreement covering trade in goods as well as services; it came into effect in August.
Earlier in December 2011, India, Japan, and the United States held their first trilateral strategic dialogue. It is creditable that despite the political instability in Japan, and the scandal-induced paralysis in India, both countries managed to fit in these high-level exchanges. It is crucial that growing India-Japan ties are viewed independently of each country's relations with China.
Civil Nuclear Cooperation Agreement
The 10-page India-Japan joint statement has no doubt called for concluding the agreement with “due regard to each side’s relevant interests, including nuclear safety.” But this will hardly lessen the fears in the minds of millions of people who live in the vicinity of the areas where nuclear power plants are located or planned.
It is not surprising that Noda has been making a strong plea for the resumption of negotiations on a civil nuclear cooperation agreement between his country and India. He was a man on a mission, reiterating this whenever he got an opportunity during his stay in New Delhi as part of the annual summit between the two nations’ prime ministers.
The stakes are high as India expects to have 20,000 MWe of nuclear capacity on line by 2020 and Japan would like a share in this. India has already signed civil nuclear agreements with the United States, Russia, France, Britain, Canada, South Korea, Argentina, Kazakhstan, Mongolia and Namibia. Negotiations with Japan were brought to a halt after three meetings held last year after the March 2011 disaster that hit one of Japan’s oldest nuclear power plants — Fukushima Daichi Nuclear Power Station — which saw a meltdown after being crippled by a tsunami.

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