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India and Japan will continue the steady progress in bilateral economic cooperation, including the partnership in the ambitious bullet train project, Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe re-affirmed at their virtual meeting at the India-Japan Summit on Thursday.
“Both sides re-affirmed that the strengthening of bilateral relationship between the two countries will not be affected following the Japanese PM’s resignation to come into effect later this month. The basic policy being followed of prioritising Japan-India relationship will not change and economic cooperation and collaboration in projects, such as the High Speed Railways, will continue,” an official tracking the meeting told BusinessLine .
The statements made at the summit is important as it helps set the tone for bilateral relationships going forward between the countries after the Japanese PM steps down.
Abe also explained the reason behind his resignation (the re-surfacing of health problems) and appreciated the growing friendship and trust between the two countries, the official said.
Military logistic pact
The two leaders also welcomed the signing of the key military logistic pact, Acquisition and Cross Servicing Agreement (ACSA), on Wednesday, a day prior to Summit.
India, as an investment destination, has become more significant for Japan in the recent years as Tokyo seeks to reduce its dependence on China which is engaged in a long-drawn trade war with the US and is also experiencing rising labour costs.
Japan recently included India and Bangladesh in the subsidy programme for Japanese investors seeking to shift their investments from China.
Japan is the fourth largest investor in India, after Mauritius, Singapore and the Netherlands, accounting for cumulative Foreign Direct Investments (FDI) of $33.5 billion in 2000-20 period accounting for 7.2 per cent of India’s total inflows.
India, however, is not happy about its growing trade deficit with Japan following the implementation of the Comprehensive Economic Partnership Agreement in 2011 and wants it to be re-worked.
The ambitious bullet train project, being funded by Japan, has run into problems due to cost over-runs and problem in land acquisition.
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