DMPQ- “Economy and trade has become centre of India-japan relations.” Elucidate

. As of now Japan-India trade is a mere 5% of Japan-China trade. Today, India-Japan trade languishes at around $15 billion, a quarter of trade with China while Japan-China trade is around $300 billion.

India is the largest recipient of Japanese foreign aid. Japanese have also made record investment in private equity and venture capital in India.

Both Japan and India must aspire for two-way trade of $100 billion, annual investment by Japan in India of $25 billion and at least 100 joint +manufacturing/research and development centres on a global scale within the next ten years.

The Comprehensive Economic Partnership Agreement i.e. CEPA (2011) between India and Japan and is one of the most comprehensive agreements concluded by India. Bilateral trade between India and Japan post-CEPA has increased considerably, however, trade deficit of India with respect to Japan has also increased post-CEPA.  Huge untapped potential for Indian Pharma industry, coupled with the decision of Government of Japan towards attaining an 80 % share of generic medicines by 2018.

Cooperation in Infrastructure sector

  • Bullet Train project – ₹ 1.08 lakh crore ($17 billion) HSR (bullet train) project. Of this 81 % is through soft loan from Japan.
  • Delhi Metro rail, Next phase of Mumbai subway – funded by JICA.
  • Japan is working on developing 12 Industrial townships called Japan Industrial Townships (JITs) which will operate like Little Japan with all the infrastructure to support the operations of Japanese companies.
  • Delhi Mumbai Industrial Corridor (DMIC).
  • Chennai Bangalore Industrial corridor (CBIC), also a dedicated freight project in southern India.
  • Both countries are showing interests in Swachh Bharat Abhiyan, because they have the largest bathroom (toilet) manufacturing company of the world.
  • In Smart City Mission: Chennai, Ahmedabad and Varanasi; to turn them into a ‘smart city’ with help from Kyoto.
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