By IANS
New Delhi : Japanese Prime Minister Shinzo Abe Wednesday called for early conclusion of a bilateral economic pact with India and tripling of trade to $20 billion by 2010, while mooting a mechanism to protect the rupee and the yen.
“We have reached a basic agreement on a bilateral currency swap arrangement in response to short-term liquidity crunch,” Abe told a meeting with top business leaders from the two sides here.
Japan has swap deals with most countries in the region like China, Indonesia, Malaysia, Philippines, Singapore and Thailand, and is keen to have a similar arrangement with India.
“This will be useful for the financial and capital markets,” Abe said while expressing satisfaction at the ongoing talks on the subject that started in July last year following the visit of the Japanese cabinet secretary to India.
According to officials, Japan’s finance ministry and the Reserve Bank of India have already completed two rounds of talks on the issue and hope to conclude an agreement soon to allow rupee-yen currency swaps and curb speculations.
Japan will accept rupees and give dollars to India up to a predetermined limit, while India will take yen and send dollars to Japan if and when the need arises and provide a major cushion to its foreign exchange reserves, officials said.
Abe said India and his country have among the largest potential for development between two nations and added that the 200-plus-member business delegation drawn from top companies indicated the latent potential in India seen by investors.
The corporate executives who have come with him are from companies like Toyota Motors Corp, Canon, Honda, Nippon, Mitsui and Hitachi.
Abe said he was keen to ensure that India and Japan conclude a comprehensive economic partnership agreement soon to give a further push to trade and investment ties that has been growing dramatically in recent years.
“It would be no mistake to say that in the next three years, we should expect bilateral trade to reach about $20 billion.”
The Japanese prime minister reiterated his government’s commitment to assist India in infrastructure development, particularly the Delhi-Mumbai and Delhi-Kolkata Dedicated Freight Corridors and the Delhi-Mumbai Industrial Corridor.
“The setting up of Delhi-Mumbai Industrial Corridor would enable port facilities to be extended inland in India and thus help and accelerate economic development in the country,” Abe said.
He also called upon the corporate sector of both countries to assist Tokyo and New Delhi in meeting the challenge of climate change that the two countries have decided to tackle at the global level.
Abe said Japan was keen that India joins the Kyoto Protocol on climate change, especially in view of being among the largest polluters in the developing world.
According to Japan’s foreign office spokesperson Mitsuo Sakaba, Japan was hoping to extend yen loans to India to finance infrastructure projects especially the dedicated freight and industrial corridors, as well as rail transportation.
Sabaka said a task force has been set up for the Delhi-Mumbai Industrial Corridor chaired by India’s commerce secretary and the Japanese vice minister in the Ministry of International Trade and Industry.
Regarding the freight corridor between Delhi and Mumbai, he said the feasibility report would be ready by October this year. It is being prepared by the Japan International Cooperation Agency.
In his address, Commerce Minister Kamal Nath said the Mumbai-Delhi Industrial Corridor was expected to transform India’s economic landscape and strengthen the business bonds between the two countries.
The industrial corridor, he said, was $ 90 billion investment opportunity and urged Japanese business leaders to inspire small and ancillary companies to look towards India.