Narendra Modi on Monday extracted a pledge of nearly $35 billion in Japanese investment and financing over the next five years for infrastructure projects like smart cities and the cleaning of the Ganga.
But on the key civilian nuclear deal for Japan to supply components to reactors, the Indians had to be content with a promise to further accelerate talks with a view to clinching an agreement soon.
“Today, we have discussed this issue at length. We have reached better understanding of each other’s positions through this discussion,” Modi told a news conference, referring to the N-deal, after the two sides signed a range of agreements in areas like health, women’s development and clean energy.
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They also upgraded their relationship to a “special strategic global partnership”.
“Our relationship is not only regional in its framework, but will have a global impact…we will forge a partnership for development in other regions and interested countries across the world,” said Modi.
Analysts said that the investment figure was impressive but expressed disappointment over the nuclear deal not happening.
“The economic side was always going to be the easier one to address, but there’s no denying that $7 billion a year is a substantial result and needs to be applauded,” said former foreign secretary Kanwal Sibal.
“I personally feel the Japanese side has missed an important opportunity to finalise the nuclear deal – it would have implied that Japan has decided to treat the India as an equal in strategic terms,” he said.
Getting around $7 billion in investment and financing is significant given that total foreign direct investment in 2013-14 from Japan was $1.4 billion, and total FDI inflow from all countries was $24 billion.
Modi and his Japanese counterpart Shinzo Abe set a target of doubling Japan’s foreign direct investment and the number of Japanese companies in India within five years, and Japan agreed to remove restrictions on six of India’s space and defence-related industries.
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The leaders “welcomed progress” on a deal for India to buy the US-2 amphibious rescue and reconnaissance planes, a possible precursor to manufacturing the aircraft in India, and again said they had directed their officials to accelerate discussions.
The two sides will also deepen their defence cooperation, with Japan continuing to participate in the Indo-US Malabar joint exercises. They will also explore raising the level of the trilateral talks between India, Japan and the United States to foreign minister level from joint secretary level.
Abe offered the Shinkansen or bullet train system for the Mumbai-Ahmedabad route, saying that he was ready to provide financial, technical and operational support.
Modi is on a five-day visit to Japan, his first bilateral trip outside the subcontinent. Abe and he share a warm personal relationship, which found mention more than once in Monday’s joint conference.
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