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India, Japan take major strides in business ties

The two countries decided to take economic ties to a new level by announcing a Special Economic Partnership Initiative that will focus on extensively developing infrastructure and manufacturing capacity in India, reports Madhur Singh.

india Updated: Dec 16, 2006 22:53 IST
Madhur Singh
Madhur Singh

Japan on Friday stopped short of openly supporting the India-US civilian nuclear deal.

After a meeting with Prime Minister Manmohan Singh, Japanese Prime Minister Shinzo Abe said international civilian nuclear energy cooperation should be enhanced but insisted it should be done under “appropriate” International Atomic Energy Agency safeguards. He, however, refused to take a position on the deal, saying Japan would engage in discussions with India first.

A joint statement issued after the meeting said: "The two leaders share the view that nuclear energy can play an important role as a safe, sustainable and non-polluting source of energy."

Joint statement
 Political, defence & security cooperation 
Annual summit-level meetings 
Regular policy dialogue between NSA and Japanese counterpart; establishment of consular post in Bangalore

Joint exercises by Japan Maritime Self-Defence Force and Indian Navy in 2007 
 HRD for promotion of manufacturing 
Programme to transfer Japanese manufacturing management and skills 
Development of Indian Institute of Information Technology for Design and Manufacturing, Jabalpur, and of an IIT with Japanese help 
 Business-to-business plans 
Development of rail-connected inland container depots and special warehouses 
Establishment of Business Leaders' Forum to provide suggestions for CEPA

Establishment of Japan-India Information and Communication Technology Forum


Japan’s reluctance to openly take a stand on the India-US deal is because ‘nuclear’ is a sensitive word here. Japan is the only country to have had a nuclear bomb dropped on it. It is a key member of the Nuclear Suppliers Group with which India will have to reach an agreement to take its nuclear deal with the US forward.

Recognising Japan and India’s strengths in high technology and knowledge economy, and noting the importance of non-proliferation, Singh and Abe decided to launch a consultation mechanism to facilitate bilateral trade in high technology and address matters relating to mutual export control regimes. Singh, while releasing the joint statement, said he was “deeply satisfied” with the outcome of his visit.

Economic partnership

The two countries also decided to take bilateral economic ties to a new level by announcing a Special Economic Partnership Initiative (SEPI) that will focus exclusively and extensively on developing infrastructure and manufacturing capacity in India. The SEPI is ambitious in scope, as it covers development activity in the power, transport and manufacturing sectors.

Under the SEPI, Japan will help India set up dedicated multi-modal freight corridors between Mumbai-Delhi and Delhi-Howrah, assist in creating a Mumbai-Delhi industrial corridor, and set up multi-product Special Economic Zones to source Japanese investment. A task force on the Indian power sector will also be set up.

The two sides also decided to start negotiations on a Comprehensive Economic Partnership Agreement (CEPA). Besides, India will continue to remain the recipient of the largest amount of Japanese Official Development Assistance.

Japan decided to align itself with India's aim of equitable growth by agreeing to promote rural business and industrialization. A pilot project of the scheme will be launched under the ‘One Village One Product’ programme.

Energy security

For energy security, a Japan-India Energy Dialogue will be established, while science and technology initiatives — especially in the fields of nano-technology, life science and deep sea drilling — are on the anvil. Both sides also plan to create an Open Access Database to share scientific information between academic, public and industrial institutions.

First Published: Dec 16, 2006 00:50 IST