The Hindu Business Line : India, Japan inching closer to trade pact

Biz meet: The Prime Minister, Dr Manmohan Singh, with the Prime Minister of Japan, Mr Shinzo Abe, during a meeting with Japanese businessmen in the Capital on Tuesday.

Our Bureau

New Delhi, Aug. 21 India and Japan today stepped up the pace for increased bilateral economic co-operation with the Union Minister for Commerce, Mr Kamal Nath, stating that both countries were close to finalising the economic agreement pact.

“The fourth official meeting will take place on September 3 during which issues related to rules of origin and market access would be taken up. We expect that the agreement would be concluded in another two rounds of talks,” the Minister said at a meeting with Japanese business delegation in the presence of the Prime Ministers of India and Japan.

More Engagement

From the Japanese side, it was announced that investments in the Indian automotive and logistics sector worth about ¥200 billion could be expected over the next five years.

Though Japan had become the second largest investor in India during the first quarter of the year, Mr Kamal Nath said that there was need to have more engagement with the Japanese small and medium scale industry.

“The JETRO office in India has started hand-holding with SMEs. We are looking at them to open more office here and have offered land,” the Minister said.

Setting a target of $5 billion for investment flow from Japan to India, Mr Kamal Nath said that this was more than possible given the current momentum in the relations.

Addressing the meeting, the Prime Minister, Dr Manmohan Singh, said that in the current international system, the political, economic and strategic interests of India and Japan had never been so convergent.

“Japanese automobile industries like Toyota, Honda and Suzuki have located parts of their global production chains in India. We need more such models and examples of mutually beneficial collaboration in other sectors,” the Prime Minister said.

FDI Regulations

The Prime Minister also reaffirmed the commitment of the Government to create and sustain an environment conducive to risk taking and long-term investment in India. “Over the past few years, our FDI regulations have been made more liberal, transparent and investor friendly. We are working to ease the supply constraints in the availability of skilled labour,” Dr Singh said.

Pointing out that relations between the two had been growing in leaps and bounds, the Japanese Prime Minister, Mr Shinzo Abe, said that while Japanese investment into India had quadrupled, the trade flow had more than doubled in the recent past.

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