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Japan to give ₹3.2 lakh-crore push to economic ties
The planned investment was announced by Japanese Prime Minister Fumio Kishida at the conclusion of the first annual India-Japan Summit in over three years, and the two sides also finalised seven loans from the Japan International Cooperation Agency (JICA) worth ₹20,400 crore for several projects.
Japan on Saturday announced it will invest five trillion yen ($42 billion) in India over five years to finance public and private projects, with Prime Minister Narendra Modi and his Japanese counterpart Fumio Kishida emphasising the importance of economic ties in the bilateral strategic partnership.
The planned investment was announced by Kishida at the conclusion of the first annual India-Japan Summit in more than three years, and the two sides also finalised seven loans from the Japan International Cooperation Agency (JICA) worth ₹20,400 crore for projects in connectivity, water supply, sewerage, health care, and biodiversity conservation.
Shared concerns about China’s aggressive actions have given a boost to the India-Japan strategic partnership in recent years, with increased focus on creating resilient supply chains and strengthening economic cooperation. The two countries also cooperate closely within the Quadrilateral Security Dialogue or Quad.
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Modi described Kishida, who is on his first bilateral foreign visit since becoming the premier last October, as an “old friend of India”, and the Japanese leader said the two countries, bound by shared values such as democracy and rule of law, need to cooperate closely both bilaterally and at forums such as the Quad for a free and open Indo-Pacific.
“The India-Japan economic partnership has made unprecedented progress in the last few years... Japan is one of the largest investors in India, a world-class partner,” Modi said at a joint media interaction, pointing to Japan’s cooperation in flagship projects such as the dedicated freight corridor and the Mumbai-Ahmedabad high-speed rail project.
“I am happy that we have exceeded the investment target of 3.5 trillion Japanese yen set in 2014. Now, we have... set a new target of five trillion yen, which means about ₹3,20,000 crore in the coming five years,” he added.
Kishida described India as an important partner for Japan while announcing the new investment target. He said the two countries will also closely work on issues such as energy transition, and noted Japan’s commitment to the development of India’s northeastern states.
The two countries signed three agreements for cooperation in cybersecurity, including information sharing and capacity-building programmes; sustainable urban development, including affordable housing, intelligent transport management and urban flood management; and waste water management using Japan’s Johkasou technology.
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The India-Japan Industrial Competitiveness Partnership Roadmap, which will focus on supply chain issues and encourage Japanese MSMEs to invest in India, and a clean energy partnership, which will focus on electric vehicles, batteries, development of charging infrastructure, and solar and hydrogen power, were finalised during the summit. The road map will also address issues that Japanese companies currently face in India through a fast-track mechanism.
The two sides also unveiled a sustainable development initiative for India’s northeastern states that will focus on connectivity, health care, agro industries and strengthening the bamboo value chain.
They also amended the bilateral comprehensive economic partnership agreement (CEPA) to facilitate the export of surimi fish to Japan. They also agreed on the import of Japanese apples and export of Indian mangoes. At an India-Japan Business Leaders Forum held after the summit, Maruti Suzuki announced plans to build a plant in Gujarat for EVs and batteries and another initiative in Gujarat for vehicle scrapping. The total investments for these two projects will be ₹10,400 crore.
A joint statement issued after the summit said the two sides will work towards reliable, resilient and efficient supply chains in the region. They also emphasised the importance of collaboration to address illicit technology transfers, build resilient supply chains and strengthen the protection of critical infrastructure, including through the Quad.
The prime ministers pointed to the increasing role played by digital technologies in the post-Covid world and welcomed growing cooperation under the India-Japan Digital Partnership to enhance the digital economy through promotion of joint projects. This includes digital transformation and opportunities for Indian IT professionals to work in Japan, and collaboration in internet of things, artificial intelligence and emerging technologies. Kishida “looked forward to attracting more highly skilled Indian IT professionals to contribute to the Japanese ICT sector”, the joint statement said.
The India-Japan Summit scheduled for 2019 was called off after the venue, Assam’s main city of Guwahati, was rocked by protests against the Citizenship (Amendment) Act. The summit couldn’t be held in the next two years because of the Covid-19 crisis and political turmoil in Japan.
