Japan, India to expand economic relationship

Union Minister for Commerce and Industry Kamal Nath

Union Minister for Commerce and Industry Kamal Nath  

P. S. Suryanarayana

SINGAPORE: The Japanese Minister of Economy, Trade and Industry, Shoichi Nakagawa, and the Union Commerce and Industry Minister, Kamal Nath, have agreed to "exercise a political initiative towards cementing the economic relationship between the two countries."

In a joint statement issued at the end of their talks in Tokyo, the Ministers agreed to further strengthen dialogue at their level in the overall context of "a possibility of a Japan-India Economic Partnership Agreement". It was noted that "trade and investment between Japan and India had stagnated" in almost all fields except information technology.

The latest ministerial-level talks acquire importance with the Japanese Prime Minister, Junichiro Koizumi's scheduled visit to India towards the end of the month. Coinciding with Mr. Kamal Nath's visit, the fourth round of "India-Japan Investment Dialogue" and an event called "Destination India" were held in Tokyo.

The Federation of Indian Chamber of Commerce and Industry organised the "Destination India" event. With a view to "reinforcing the economic relationship between the two countries", Mr. Nakagawa and Mr. Kamal Nath agreed on an "action plan" for cooperation in the manufacturing industry and interaction as "global partners" in the economic domain.

A key element of cooperation in the manufacturing sector was the efforts to promote "yen loan projects" through the utilisation of "Japan's excellent techniques and know-how". The improvement of the investment environment in India and the "stable supply" of some natural resources to Japan were also cited for attention under the "action plan". On cooperation in the IT sector, an area identified under the existing "Global Partnership" between India and Japan, the two Ministers hoped for an "expeditious" settlement of the issues relating to "taxation on software development".

On global economic issues, the two Ministers said, "it is critically important to deepen the dialogue... and strengthen the partnership" between India and Japan on the Doha Development Agenda before the ministerial meeting of the World Trade Organisation in Hong Kong next December.

Talks progressing

The Singapore Ministry of Trade and Industry (MTI) said on Friday that its negotiations with India for a comprehensive economic cooperation agreement (CECA) had now reached the "last half-mile mark."

Singapore was now awaiting the Indian response to its proposals on some residual issues. "Ahead of a signing [of CECA] both sides have committed to resolving issues involving the re-negotiation of the Avoidance of Double Taxation Agreement that was signed in 1994 as well as commitments on financial and telecommunications services," the MTI said.

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