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Two hundred Japanese business executives will be in the delegation that Japanese Prime Minister Shinzo Abe will lead to India on August 21-23, 2007.
Trade between India and Japan has not been very high although Japan is the biggest donor of economic aid to India. Japan is only India's 10th biggest trading partner and fourth biggest foreign investor.
Experts say this is because Japan was not attracted by India's small middle class and already had manufacturing bases in Southeast Asian countries closer to it.
However, India's steadily growing economy has changed all that. The two countries have already agreed to forge an economic partnership agreement within two years (see earlier report ‘India, Japan to expedite CEPA negotiations').
A widely publicised project is the industrial corridor project. Japan is to give $ 90 billion for an industrial corridor with state-of-the-art infrastructure linking the cities of Delhi and Mumbai.
Japan is also set to offer around $ 3.44 billion in low-interest loans as official development aid to help fund the construction of a high-speed freight line as part of the industrial corridor project, according to a report in the Sankei Shimbun newspaper.
In return, Japan would like to see further easing of foreign investment restrictions and is keen to build nuclear power plants in India, now that India has the green signal to go ahead with its controversial civilian nuclear programme.
August 17, 2007
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