An Investment Target Of ‘’Five Trillion Yen’’ ($42 bn) In The Next 5 years
India and Japan set an investment target of ‘’five trillion yen’’ ($42 billion) in the next five years, the leaders announced after a meeting in New Delhi for the 14th annual summit, where several agreements were signed. This was the first India-Japan annual summit since 2018, which had been postponed due to protests against the Citizenship (Amendment) Act and then due to the pandemic.
The two noted with appreciation the significant growth in economic cooperation between the two countries. The joint statement also said that two welcomed the launch of the India-Japan Clean Energy Partnership for cooperation towards achieving sustainable economic growth, addressing climate change & ensuring energy security. They also discussed regional and global issues during their talks. Three Memorandum of Understanding were signed on areas such as cyber security, sustainable urban development and wastewater management with a new Japanese technique.
This follows from the Investment Promotion Partnership of 2014 when both sides agreed for JPY 3.5 trillion investment during 2014-19. That target has been met, taking into account the Official Development Assistance and investments from Japan. The new target will provide scope for greater involvement of Japanese companies in the Indian economy.
The Japanese investments in India touched $32 billion between 2000 and 2019, mainly in the automobile, electrical equipment, telecommunications, chemical, insurance and pharmaceutical sectors. Japan has also been supporting infrastructure development in India, including a high-speed rail project. The bilateral trade between India and Japan for 2019-20 crossed $11.87 billion, according to government data. India’s exports from Japan amounted to $3.94 billion while India’s imports from Japan stood at $7.93 billion. In September, the Quad leaders announced Japan would work with India on a $100 million investment in COVID-19 vaccines and treatment drugs. In 2020, Japan and India signed an acquisition and cross-servicing agreement, which allows for reciprocal provisions of food, fuel and other supplies between the Indian army and Japan's Self-Defense Forces. Kishida and Modi are to reaffirm that they will push that deal forward
India says ties with Japan are key to stability in the region. The two nations, along with the US and Australia, are members of the Indo-Pacific alliance known as ‘’ the Quad’’ that is countering China’s rising influence in Asia. India is the only Quad member that has not condemned Russia’s invasion of Ukraine. It has refrained from taking sides and abstained from voting against Russia at the U.N. or criticizing President Vladimir Putin.
It is significant that despite the recent developments in Ukraine, Tokyo and New Delhi have managed to present a united front vis-à-vis China. The two sides had discussed China’s aggressive stance in the Indo-Pacific as well as its encroachment on India’s land borders, and added that it could not be “business as usual” with Beijing until the stand-off in Ladakh is resolved peacefully. Given recent overtures by China, and the talk of a visit by Chinese Foreign Minister Wang Yi, Delhi’s stated commitment to the rules-based order will certainly provide comfort to Tokyo. It is this goodwill, enhanced by Kishida’s visit, that can be built upon for greater cooperation in the upcoming 2+2 ministerial conference.
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