By Murali Krishnan, IANS,
Tokyo : Reiterating its commitment to take economic ties with India to a new level despite the global uncertainty, Japan Wednesday pledged $4.5 billion towards the first phase of the Delhi-Mumbai Industrial Corridor Project (DMIC) but was non-committal on starting negotiations for a bilateral civil nuclear agreement.
Both Prime Minister Manmohan Singh and his counterpart Taro Aso believed the DMIC, which is linked to the western section of the dedicated freight corridor, had the potential to transform the dynamics of the India-Japan economic engagement with five Japanese companies participating in early bird projects.
Addressing a joint press conference after signing a declaration on security cooperation and reviewing their strategic and economic ties, both prime ministers declared that Japan’s Official Development Assistance (ODA) had contributed to India’s economic development and had the potential to develop further.
India is the single largest beneficiary of the ODA.
“In the past five years, Japan’s investments to India have increased ten-fold and the number of companies in Delhi has doubled in three years,” Aso said.
He also reaffirmed that both sides were “overcoming difficulties” and said the signing of the much-touted economic partnership pact would happen and would drive their bilateral trade much beyond $10 billion. The Comprehensive Economic Partnership Agreement (CEPA), which the two sides propose to sign soon, will broaden the merchandise trade basket and enhance reciprocal investments.
On his part, Manmohan Singh said the deepening economic and strategic cooperation with Japan was not at the cost of China.
“There is no competition between India and China and there is scope for both countries to grow. Our arrangement with Japan is not at the expense of a third country, least of all China,” the prime minister said.
According to Manmohan Singh, the record of India-Japan economic and trade engagement in the past few years bodes well for the future. He said bilateral merchandise trade, in the process, should double to $20 billion by 2010.
“The sky is the limit for Japanese investments and there is a congenial investment climate in India.”
Earlier in the day, while addressing the crème de la crème of Japan’s corporates and industrial houses, Singh exhorted investors not to worry about the difficulties thrown up by the international financial crisis and urged them to have faith in India’s financial system.
“A vibrant democracy often presents new challenges. I urge you to have faith in our system and our resolve. We are committed to creating a congenial climate for private initiative, risk-taking and enterprise,” Manmohan Singh said at the business luncheon.
He acknowledged that India had begun to attract investment from Japan “but it is much less than the full potential”.
To a pointed query on an India-Japan civil nuclear agreement, Manmohan Singh said: “It is our sincere desire to strengthen and develop our cooperation in civil nuclear energy. But I do recognize the sensitivity of this issue in Japan.”
Japan has said it wanted India to live up to its commitments on a moratorium on nuclear testing before engaging on civil nuclear cooperation despite Manmohan Singh expressing a desire for future cooperation during summit level talks.
“We will move at a pace at which the Japanese government and people are comfortable,” the prime minister maintained.
The joint declaration on security cooperation that will intensify interaction between the Indian and Japanese militaries and expand the scope of strategic dialogue between the two Asian powers was described by Indian Foreign Secretary Shivshankar Menon as “significant”.
Affirming their common commitment to fight against terrorism and recognizing that counter-terrorism efforts, including the Japan Maritime Self Defence Force’s replenishment activities in the Indian Ocean, Menon said it constituted an important part in the international community’s efforts to eradicate terrorism.
“This partnership walks on two legs and is a clear commitment by Japan that it wants it to grow and blossom,” Menon said.
“We got a whiff of what this relationship was when Prime Minister Singh visited Japan in December 2006. Now we realize the potential and the milestones that are being achieved,” Menon added.