You are on page 1of 21

INDIA & JAPAN SIGNED TWO AGREEMENT IN TOKYO

Presented by: Parneet Singh MBA (1st Sem)

History
Historically, India and Japan have deep rooted links through the oriental culture and religion, which had their origin in India. However, the two countries have grown through different paths of development for most part of last few centuries. In 1939, the Second World War engulfed the whole world. At the end of WWII, Japan was essentially a ruined nation but the people had strong determination and will to stand again. Around the same time, India got freedom from the British rulers, and the process of development started under the enlightened vision of national leaders. Both Japan and India adopted the look West policy for faster development. While Japan became a close ally of USA and adopted capital oriented economy, India chose a socialist approach with an emphasis on self-reliance. Although it resulted in slower pace of development, it helped us establish a broad base in science and technology. On the other hand, Japan progressed on the path of market economy with full support from USA, and soon became an economic super power.

Japan’s priority strategies for Science & Technology (i) Promotion of basic research In the pursuit of universal knowledge from a long term perspective. and ensuring safe and secure lives for its people. aiming to accumulate intellectual achievements to generate new knowledge constantly (ii) Prioritization of R & D in response to issues important to the state and society. . For ensuring sustained economic development through vitalization of economy and industry.

Priority strategic areas i) Life Science (ii) Information & Communication (iii) Environment (iv) Nanotechnology and materials (v) Energy (vi) Manufacturing sciences/technologies (vii) Infrastructure (viii) Frontier science .

when the total bilateral trade was $13.72 billion.36% as against the growth of 40.43 billion. showing increase of 34. India's exports to Japan grew by 24.33% over FY 2010-11.2% in its imports from Japan in FY 2011-12.Bilateral Trade • In the Financial Year (FY) 2011-12. The export-import statistics for the last seven years as per India's Ministry of Commerce data bank are as follows: . Japan-India bilateral trade reached $18.

13 2008-09 3.43 Japan) .Bilateral Trade Year EXPORT India’s Total Export %Share IMPORT 2.32 2.91 2.69 288.75 2010-11 5.48 103.37 6.09 251.27 4.03 6.02 185.09 2006-07 2.63 2.33 13.59 2.37 369.73 6.41 2007-08 3.32 1.73 251.41 4.6 10.07 12.86 163.47 18.46 2.33 305.06 2.18 2.63 7.29 2009-10 3.52 10.36 2.13 2011-12 6.07 8.34 10.89 2.63 178.72 2.10 2005-06 2.65 303.77 489.17 185.73 2.54 2.87 126.96 India’s Total Import %Share TOTAL TRADE (with 149.48 7.

. The trade balance is likely to continue to be in favour of Japan in the future. iron ore. marine products. This is quite small considering the size of the two economies. inorganic/organic chemicals.21 to 2. It was in the range of 2. etc. The share of the India-Japan bilateral trade has hovered around 1 per cent of Japan's total foreign trade in the last three years.46 of India's total trade during the last five fiscal years. transport equipment. iron and steel.• India’s primary exports to Japan have been petroleum products. organic chemicals. ferroalloys. India’s primary imports from Japan are machinery. machine tools. oil meals. etc. gems and jewelry. electronic goods. given the past trends.

This accounted for 7% of total FDI inflow into India and made Japan the 4th largest investor in India. India’s growing economy and stable investment climate offer large opportunities for Japanese companies. DIPP statistics show that Japanese companies have made actual investments of $12. The current level of FDI from Japan reflects neither the potential of Japan to invest nor the capacity of India to absorb. pharmaceuticals. The number of Japanese affiliated companies in India has grown significantly over the last five years and more than 800 Japanese companies are operating in India. .66 billion to India between April 2000 and June 2012.Japanese FDI into India • India is emerging as a favoured destination in Asia for Japanese FDI. electrical equipments. trading and telecommunications sector.Japanese FDI into India has mainly been in automobile industry.

In the 2011 survey also China and India were ranked 1st and 2nd respectively as most promising countries for overseas business over medium term. The 2008 survey shows that India continued to be the most promising destination for overseas business operations over the long term (the next 10 years or so). .• The Japan Bank for International Cooperation (JBIC) conducts an annual survey of Japanese companies of overseas business operations to determine both the current trend and the future outlook of Japanese manufacturing companies of business operations abroad. The 2010 survey put India ahead of China as the most attractive long-term overseas investment destination for Japanese manufacturers (2nd-most attractive after China in the medium term). India has also considerably closed the gap with China as a destination for medium term (next 3 years) business operations.

Junichiro Koizumi and the Prime Minister of India. the then Prime Minister of Japan. The negotiations for Comprehensive Economic Partnership Agreement (CEPA) commenced in January 2007 and were concluded after Fourteen rounds in September 2010. The JSG in its Report of June 2006 concluded that there was a huge potential to deepen and expand existing bilateral economic relations.Comprehensive Economic Partnership Agreement (CEPA) • In November 2004. . Dr Manmohan Singh agreed to set up a Joint Study Group (JSG) to study all aspects and give its recommendations on strengthening economic relations between the two countries. Mr.

The CEPA was signed by Indian Commerce Minister Anand Sharma and the then Japanese Foreign Minister Seiji Maehara on 16thFebruary. the two leaders directed their relevant authorities to work towards early entry into force of CEPA and its smooth implementation. the two Prime Ministers signed a Joint Declaration on the conclusion of CEPA between the two countries. The Agreement has become effective from 1st August 2011.• During Prime Minister Dr. . 2011. Manmohan Singh’s visit to Tokyo in October 2010 for the Annual Bilateral Summit. In a separate Joint Statement on the ‘Vision for India-Japan Strategic and Global Partnership in the next Decade’.

.• The first meeting of the Joint Committee at the Commerce Secretary's level was held on 1st August 2011. The second meeting of the Joint Committee was held in Tokyo on 17th October 2012 and it was decided to establish another Sub-Committee on Movement of Natural Persons. The Joint Committee recognized the need for establishment of various Sub-Committees as per the Agreement.

Official Development Assistance (ODA) • India has been the largest recipient of Japanese ODA since 2003-04. urban transportation. renewable energy and financial services. agriculture. Cumulative commitment of ODA till September 2012 reached Yen 3587. As on 14 September 2012. environment and forests. 59 projects were under implementation with Japanese loan assistance. irrigation. railways. rural drinking water supply. tourism. These projects are in the sectors of power. urban water supply and sanitation. The loan amount committed for these projects is Yen 1214.302 billion on commitment basis. shipping.811 billion. .

• Dedicated Freight Corridor (DFC) The Dedicated Freight Corridor (DFC) project is one of the most ambitious projects that Indian Railways has ever taken up. In this context. both sides agreed to expedite work on Phase II of the DFC with a view to starting implementation of project as early as possible. Japan and India are committed to execution of the Western corridor of the DFC project through an ODA loan utilizing Japan's Special Terms of Economic Partnership (STEP). . In the Joint Statement issued during Japanese Prime Minister’s visit to India on 28 December. the two Prime Ministers emphasized the importance of an early realization of the Western Corridor of the DFC which runs through the Delhi Mumbai Industrial Corridor (DMIC) with Japan’s support. 2011. It is intended to meet the transport requirements of the two busy trunk routes (Eastern and Western Corridors) for the next 15-20 years.

. Main loan for Phase II is targeted for signing in 2012-13.6 billion was signed on October 27.262 billion) was signed. 2009 followed by agreement on Phase-I funding by JICA in March 2010 when the first tranche of main loan (Yen 90. Contract for Engineering Services consultancy was signed by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) in May 2010. Engineering Services loan agreement (Yen 160 billion) for Phase-II (Jawaharlal Nehru Port-Vadodara & Rewari-Dadri. The loan agreement for Engineering Services for Phase-I for Yen 2. 584 kms) had also been signed in July 2010.• JICA assistance for Phase-I (Rewari-Vadodara segment of 950 kms) has been estimated at Yen 405 billion.

. The DMIC project is proposed to be implemented on either side of the 1483 km long Western Dedicated Rail Freight Corridor between Dadri (UP) and JNPT (Navi Mumbai). Government of India accorded ‘in principle’ approval to the project outline of Delhi .Delhi-Mumbai Industrial Corridor (DMIC): • In pursuance of an MOU signed between the Government of India and the Government of Japan during the Hon’ble Prime Minister’s visit to Tokyo in December 2006 to promote investments and explore opportunities for mutual cooperation.Mumbai Industrial Corridor (DMIC) Project in August 2007.

The DMIC Development Corporation (DMICDC) was incorporated in January 2008 for project development.• The project seeks to create a strong economic base with a globally competitive environment and state-of-the-art infrastructure to activate local commerce. Haryana. 7 nodes/ cities have been taken up for development. coordination and implementation of the numerous projects. enhance investments and attain sustainable development. Initially. Gujarat and Maharashtra and majority of projects in DMIC are envisaged to be implemented through Public-Private Partnership mode. The DMIC spans the six States of Uttar Pradesh. Madhya Pradesh. Rajasthan. . Looking at the magnitude and diversity of the project. the entire project has been planned to be implemented in phases.

cooperation in hardware and software development. environmental and energy fields and high technology trade. . The Second Meeting was held in October 2008.Japan-India Business Leaders’ Forum (BLF) • Japan-India Business Leaders’ Forumwas announced during Indian Prime Minister’s visit to Japan in December 2006. The First Meeting of the BLF was held in August 2007 at the time of Japanese PM Abe’s visit to India. The Joint Proposal of the Forum stressed the importance of early conclusion of Comprehensive Economic Partnership Agreement (CEPA).

More frequent meetings between the business leaders are necessary to remove institutional hurdles and bring about greater liberalization of trade and investment. However. Business Leaders of both sides recognized that IndiaJapan CEPA is the cornerstone to further evolve and establish strategic economic partnerships.• The two sides emphasized EPA as a necessary institutional infrastructure to further accelerate and consolidate expansion of bilateral investment and trade. . the public and private enterprises of India need to put in further concerted efforts to nurturing this into a robust economic alliance from which both businesses benefit. The 3rd meeting of BLF was held in Tokyo in October 2010.

Trade and Industry of Japan on Cooperation in the Rare Earths Industry in India. The agreements signed up between the two countries. . • Hope.Conclusion • Both. the Governments of India and Japan has signed two agreement on 16 Nov 2012. included two agreements:Agreement between India and Japan on Social Security • Memorandum between the Department of Atomic Energy of India and the Ministry of Economy. • The conclusion and signing of these agreements will further enhance and strengthen the India-Japan Strategic and Global Partnership. Our Government will be able to attain benefits from this agreement.