The visit of Japanese Prime Minister Shinzo Abe, who arrives in India on Tuesday, is expected to redefine the contours of Indo-Japan economic relations with the bilateral trade projected to double over the next five years.
Among others, Abe’s visit is expected to give a push to the ambitious Delhi-Mumbai Industrial Corridor (DMIC) project, recently cleared by the Cabinet.
Work on the 1,483-kilometre long DMIC is expected to commence in 2008 and an estimated $90-100 billion would be required to create the infrastructure in the first phase of the project. Japanese companies, particularly small and medium enterprises, are expected to invest over $10 billion in the proposed corridor during the first phase.
A memorandum of understanding (MoU) was signed between India and Japan for establishing the corridor in December 2006 during Prime Minister Manmohan Singh’s visit to the country.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has called for a new economic engagement model that would catapult bilateral trade from an anticipated $7 billion in 2007 to $14 billion in 2012.
According to Dinesh Sharma, joint secretary, ministry of commerce, the India-Japan strategic partnership should focus more on trade, investment and technology.
At present, India receives the largest amount of Official Development Assistance from Japan. Official data shows that total FDI inflows into India from Japan during August 1991-March 2007 amounted to $ 2208.5 million.