India & Japan Signed Two Agreement in Tokyo

7/29/2019 India & Japan Signed Two Agreement in Tokyo

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INDIA & JAPAN SIGNED TWO

AGREEMENT IN TOKYO

Presented by:Parneet Singh

MBA (1st Sem)


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History

Historically, India and Japan have deep rooted links through the

oriental culture and religion, which had their origin in India.However, the two countries have grown through different paths ofdevelopment for most part of last few centuries.

In 1939, the Second World War engulfed the whole world. Atthe end of WWII, Japan was essentially a ruined nation but thepeople had strong determination and will to stand again. Aroundthe same time, India got freedom from the British rulers, and theprocess of development started under the enlightened vision ofnational leaders. Both Japan and India adopted the look Westpolicy for faster development. While Japan became a close ally of

USA and adopted capital oriented economy, India chose a socialistapproach with an emphasis on self-reliance. Although it resultedin slower pace of development, it helped us establish a broad basein science and technology. On the other hand, Japan progressedon the path of market economy with full support from USA, andsoon became an economic super power.


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Japans priority strategies for Science

& Technology

(i) Promotion of basic research

In the pursuit of universal knowledge from a longterm perspective, aiming to accumulate

intellectual achievements to generate newknowledge constantly

(ii) Prioritization of R & D in response to issuesimportant to the state and society.

For ensuring sustained economic developmentthrough vitalization of economy and industry, andensuring safe and secure lives for its people.


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Priority strategic areas

i) Life Science

(ii) Information & Communication

(iii) Environment

(iv) Nanotechnology and materials

(v) Energy

(vi) Manufacturing sciences/technologies

(vii) Infrastructure

(viii) Frontier science


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Bilateral Trade

In the Financial Year (FY) 2011-12, Japan-India

bilateral trade reached $18.43 billion, showing

increase of 34.33% over FY 2010-11, when the

total bilateral trade was $13.72 billion. India'sexports to Japan grew by 24.36% as against

the growth of 40.2% in its imports from Japan

in FY 2011-12. The export-import statistics forthe last seven years as per India's Ministry of

Commerce data bank are as follows:


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Bilateral Trade

Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

EXPORT 2.48 2.87 3.86 3.02 3.63 5.09 6.33

Indias Total

Export

103.09 126.41 163.13 185.29 178.75 251.13 305.96

%Share 2.41 2.27 2.37 1.63 2.03 2.07 2.07

IMPORT 4.06 4.59 6.32 7.89 6.73 8.63 12.10

Indias Total

Import

149.17 185.73 251.65 303.69 288.37 369.77 489.32

%Share 2.73 2.48 2.52 2.6 2.34 2.33 2.47

TOTAL

TRADE (with

J apan)

6.54 7.46 10.18 10.91 10.36 13.72 18.43


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Indias primary exports to Japan have been petroleum

products, iron ore, gems and jewelry, marine products,oil meals, ferroalloys, inorganic/organic chemicals, etc.Indias primary imports from Japan are machinery,transport equipment, iron and steel, electronic goods,organic chemicals, machine tools, etc. The trade

balance is likely to continue to be in favour of Japan inthe future, given the past trends. The share of theIndia-Japan bilateral trade has hovered around 1 percent of Japan's total foreign trade in the last threeyears. It was in the range of 2.21 to 2.46 of India's total

trade during the last five fiscal years. This is quite smallconsidering the size of the two economies.


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Japanese FDI into India

India is emerging as a favoured destination in Asia for

Japanese FDI. DIPP statistics show that Japanese companies

have made actual investments of $12.66 billion to India

between April 2000 and June 2012. This accounted for 7% of

total FDI inflow into India and made Japan the 4th largest

investor in India. The number of Japanese affiliatedcompanies in India has grown significantly over the last five

years and more than 800 Japanese companies are operating

in India.Japanese FDI into India has mainly been in automobile

industry, electrical equipments, pharmaceuticals, trading and

telecommunications sector. The current level of FDI from

Japan reflects neither the potential of Japan to invest nor the

capacity of India to absorb. Indias growing economy and

stable investment climate offer large opportunities for

Japanese companies.


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The Japan Bank for International Cooperation (JBIC) conducts

an annual survey of Japanese companies of overseas business

operations to determine both the current trend and thefuture outlook of Japanese manufacturing companies of

business operations abroad. The 2008 survey shows that India

continued to be the most promising destination for overseas

business operations over the long term (the next 10 years or

so). India has also considerably closed the gap with China as adestination for medium term (next 3 years) business

operations. The 2010 survey put India ahead of China as the

most attractive long-term overseas investment destination for

Japanese manufacturers (2nd-most attractive after China inthe medium term). In the 2011 survey also China and India

were ranked 1st and 2nd respectively as most promising

countries for overseas business over medium term.


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Comprehensive Economic Partnership

Agreement (CEPA)

In November 2004, the then Prime Minister of Japan,Mr. Junichiro Koizumi and the Prime Minister of India,Dr Manmohan Singh agreed to set up a Joint StudyGroup (JSG) to study all aspects and give its

recommendations on strengthening economic relationsbetween the two countries. The JSG in its Report ofJune 2006 concluded that there was a huge potentialto deepen and expand existing bilateral economicrelations. The negotiations for ComprehensiveEconomic Partnership Agreement (CEPA) commencedin January 2007 and were concluded after Fourteenrounds in September 2010.


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During Prime Minister Dr. Manmohan Singhs visit toTokyo in October 2010 for the Annual Bilateral Summit,the two Prime Ministers signed a Joint Declaration onthe conclusion of CEPA between the two countries. In a

separate Joint Statement on the Vision for India-JapanStrategic and Global Partnership in the next Decade,the two leaders directed their relevant authorities towork towards early entry into force of CEPA and itssmooth implementation. The CEPA was signed by

Indian Commerce Minister Anand Sharma and the thenJapanese Foreign Minister Seiji Maehara on16thFebruary, 2011. The Agreement has becomeeffective from 1st August 2011.


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The first meeting of the Joint Committee atthe Commerce Secretary's level was held on1st August 2011. The Joint Committee

recognized the need for establishment ofvarious Sub-Committees as per theAgreement. The second meeting of the JointCommittee was held in Tokyo on 17th October

2012 and it was decided to establish anotherSub-Committee on Movement of NaturalPersons.


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Official Development Assistance

(ODA)

India has been the largest recipient of Japanese ODA

since 2003-04. Cumulative commitment of ODA till

September 2012 reached Yen 3587.302 billion on

commitment basis. As on 14 September 2012, 59projects were under implementation with Japanese

loan assistance. The loan amount committed for

these projects is Yen 1214.811 billion. These projects

are in the sectors of power, environment and forests,urban transportation, urban water supply and

sanitation, rural drinking water supply, tourism,

irrigation, agriculture, shipping, railways, renewable

energy and financial services.


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Dedicated Freight Corridor (DFC)

The Dedicated Freight Corridor (DFC) project is one of the

most ambitious projects that Indian Railways has ever takenup. It is intended to meet the transport requirements of the

two busy trunk routes (Eastern and Western Corridors) for the

next 15-20 years. Japan and India are committed to execution

of the Western corridor of the DFC project through an ODA

loan utilizing Japan's Special Terms of Economic Partnership

(STEP). In the Joint Statement issued during Japanese Prime

Ministers visit to India on 28 December, 2011, the two Prime

Ministers emphasized the importance of an early realization

of the Western Corridor of the DFC which runs through theDelhi Mumbai Industrial Corridor (DMIC) with Japans

support. In this context, both sides agreed to expedite work

on Phase II of the DFC with a view to starting implementation

of project as early as possible.


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JICA assistance for Phase-I (Rewari-Vadodara

segment of 950 kms) has been estimated at Yen 405

billion. The loan agreement for Engineering Servicesfor Phase-I for Yen 2.6 billion was signed on October

27, 2009 followed by agreement on Phase-I funding

by JICA in March 2010 when the first tranche of main

loan (Yen 90.262 billion) was signed. Contract forEngineering Services consultancy was signed by the

Dedicated Freight Corridor Corporation of India

Limited (DFCCIL) in May 2010. Engineering Services

loan agreement (Yen 160 billion) for Phase-II(Jawaharlal Nehru Port-Vadodara & Rewari-Dadri,

584 kms) had also been signed in July 2010. Main

loan for Phase II is targeted for signing in 2012-13.


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Delhi-Mumbai Industrial Corridor

(DMIC):

In pursuance of an MOU signed between theGovernment of India and the Government ofJapan during the Honble Prime Ministers visit toTokyo in December 2006 to promote investments

and explore opportunities for mutualcooperation, Government of India accorded inprinciple approval to the project outline of Delhi- Mumbai Industrial Corridor (DMIC) Project in

August 2007. The DMIC project is proposed to beimplemented on either side of the 1483 km longWestern Dedicated Rail Freight Corridor betweenDadri (UP) and JNPT (Navi Mumbai).


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The project seeks to create a strong economic base with a

globally competitive environment and state-of-the-artinfrastructure to activate local commerce, enhance

investments and attain sustainable development. The DMIC

spans the six States of Uttar Pradesh, Haryana, Madhya

Pradesh, Rajasthan, Gujarat and Maharashtra and majority of

projects in DMIC are envisaged to be implemented throughPublic-Private Partnership mode. The DMIC Development

Corporation (DMICDC) was incorporated in January 2008 for

project development, coordination and implementation of the

numerous projects. Looking at the magnitude and diversity ofthe project, the entire project has been planned to be

implemented in phases. Initially, 7 nodes/ cities have been

taken up for development.


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Japan-India Business Leaders Forum

(BLF)

Japan-India Business Leaders Forumwasannounced during Indian Prime Ministers visit toJapan in December 2006. The First Meeting of theBLF was held in August 2007 at the time of

Japanese PM Abes visit to India. The JointProposal of the Forum stressed the importance ofearly conclusion of Comprehensive EconomicPartnership Agreement (CEPA), cooperation in

hardware and software development,environmental and energy fields and hightechnology trade. The Second Meeting was heldin October 2008.


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The two sides emphasized EPA as a necessary

institutional infrastructure to further accelerate and

consolidate expansion of bilateral investment and

trade. More frequent meetings between thebusiness leaders are necessary to remove

institutional hurdles and bring about greater

liberalization of trade and investment. The 3rd

meeting of BLF was held in Tokyo in October 2010.

Business Leaders of both sides recognized that India-

Japan CEPA is the cornerstone to further evolve and

establish strategic economic partnerships. However,the public and private enterprises of India need to

put in further concerted efforts to nurturing this into

a robust economic alliance from which both

businesses benefit.


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Conclusion

Both, the Governments of India and Japan has signed twoagreement on 16 Nov 2012.The agreements signed up between the two countries,included two agreements:Agreement between India andJapan on Social Security

Memorandum between the Department of Atomic Energyof India and the Ministry of Economy, Trade and Industry ofJapan on Cooperation in the Rare Earths Industry in India.

The conclusion and signing of these agreements will furtherenhance and strengthen the India-Japan Strategic andGlobal Partnership.

Hope, Our Government will be able to attain benefits from

this agreement.


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India & Japan Signed Two Agreement in Tokyo

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