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Japan and India collaborate

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Trade minister of India Anand Sharma with prime minister of Japan Naoto Kan

Trade minister of India Anand Sharma with prime minister of Japan Naoto Kan


People’s Daily, from Asia’s largest economy, notes a free trade pact signed by the next two economies in the continent:

Japan on Wednesday signed a bilateral free trade agreement (FTA) with India aimed at boosting trade between export-dependent Japan and rapidly-growing India.

Foreign Minister Seiji Maehara and Indian Commerce and Industry Minister Anand Sharma affirmed the agreement at a ceremony at the Foreign Ministry in Tokyo.

The bilateral accord, which will make Japan and India each other’s largest free trade partner, will be endorsed in parliament promptly, Japanese officials said.

The two countries have been in discussions about the trade accord since 2007 and the final pact will scrap tariffs on 94 percent of goods within 10 years.

However, some of Japan’s fiercely protected agricultural commodities, such as rice, wheat and some dairy products will be exempt from the tariff cut, officials said.

Analysts expect that the Japan-India FTA will pave the way for Japan to invest heavily in the development of rare-earth minerals, which are used in a vast number of products including mobile phones.

The Hindu had reported earliert:

India and Japan will sign a Comprehensive Economic Partnership Agreement (CEPA) in Tokyo on Wednesday, heralding a new chapter in intra-Asian cooperation. Developing India is reckoned to be Asia’s third largest economy, while China is believed to have recently overtaken developed Japan in terms of the gross domestic product.

The economic pact, to be signed by Commerce and Industry Minister Anand Sharma and Japanese Foreign Minister Seiji Maehara, was first “agreed to, in principle,” in time for the Japan-India annual summit in October 2010. An Implementing Agreement will also be signed now.

Japanese spokesman Hidenobu Sobashima told The Hindu from Tokyo that the pact “covers not only trade and investment but also the intellectual property rights, competition, government procurement, the environment for business cooperation and also the movement of people [in the services sector].”

Meanwhile, Japanese investment in the infrastructure sector in India continued vigorously. WSJ reported:

India’s trade minister Tuesday proposed setting up a revolving fund of $9 billion jointly with Japan to help finance an industrial link, a move that highlights a growing intent to fix the country’s shabby infrastructure, which often hurts growth in Asia’s third-largest economy.

Anand Sharma, currently in Japan to sign an economic co-operation pact, met Japanese Prime Minister Naoto Kan and informed him of the current status of the industrial and transport link between New Delhi and India’s financial capital Mumbai.

The Delhi-Mumbai Industrial Corridor project, which started in 2007, is financed by the Indian government, Yen loans from Japan and investment from Japanese companies.

The project, modeled along the Tokyo-Osaka industrial corridor, is proposed to include a high-speed rail freight corridor, new power capacity of 4,000 megawatts, three new sea ports and six airports. India also plans to upgrade existing industrial units, build 12 new industrial clusters, 10 logistic parks and agricultural hubs alongside the industrial corridor.

The DMIC’s first phase is scheduled to be ready by 2012 and is expected to boost the economy in a country where, economists widely believe, creaky infrastructure takes 2% off annual growth.

Mr. Sharma, who expects the project to attract more than $100 billion in investments, urged Japanese companies to invest in capital goods such as power equipment.

India is increasingly relying on private and overseas investment to develop its infrastructure as it aims to spend $1 trillion between 2012 and 2017 to lay new roads and build airports.

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Written by Arhopala Bazaloides

February 16, 2011 at 8:23 am

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