India-Japan Economic relations to Plough New Roads

For one, India and Japan haven’t ever had any tremendous camaraderie as regards economic relations. Part of the reason was the obvious non-committal stand of the South Block mandarins at New Delhi. It is not that it has not been able to forge trade relations with most of the European and Asian countries; India has never shown over-favouritism to any country, ever since its economy was thrown open in 1991.

That New Delhi’s keenness to boost economic relations with the Far East, was not any fancy diplomatic ground, has become apparent from the strides that the government has made to explore more as regards Indo-Japan economic relations. And it’s showing positive results. The $4.5 billion pledge by Japanese Prime Minister Yoshihiko Noda, over the next five years, will be used by India to develop the Delhi-Mumbai Industrial Corridor. Besides, Tokyo has committed a financial assistance to Phase 2 of Delhi Metro railway as well as a biodiversity and conservation project on West Bengal. It is also eager to share high speed railway technology with India.

India Japan Relations

Of particular interest to India would be the currency swap arrangement between the two sides. Tokyo had agreed to the $15 billion swap to bail out the troubled rupee which was Asia’s worst performing currency in 2011. The swap will also boost cooperation in the financial and economic sector, which unfortunately, is far below their respective potential. While India wants more Japanese investments, the latter, in a landmark move, has lifted a long export ban on weapons as Japan looks to sell defence hardware to India.

The Comprehensive Economic Partnership Agreement, signed in 2010, was another significant move to augment economic cooperation between the two countries. Moreover, the recent trilateral economic and strategic dialogue involving New Delhi, Washington and Tokyo is a credible instance that regardless of the now-on now-off political instability in Japan, not to mention the scandal-induced palsy in India, both sides have managed to fit these high level exchanges in their routine.

Despite a low trade volume, Indo-Japan bilateral commerce is slated to touch $25 billion by 2014. Japanese companies are more and more viewing India as a long-term engagement, with a big and youthful population expected to fuel the latter’s growth in the coming years. There are over 800 Japanese companies that are operating in India. These companies, combined, generate over three lakh jobs. On the other hand, there are nearly 20,000 Indian entrepreneurs and businessmen who operate in Japan and there is a high demand of Indian professionals, especially in the field of legal services. Not that Indians like to drag people to court, but the fact is, Indian legal professionals have inspired many a Japanese lawyer to learn English. However, when compared to the 80,000 Japanese companies that operate in China, the former’s numbers in India looks pale in no ambiguous sense. Thus, it’s heartening that fresh grounds are being explored to unleash the tremendous economic and trade potential that India and Japan can forge among themselves. It needs to be seen how the two sides strive towards that extent.

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