Tuesday, June 10, 2008

Indo-Japan economic relations on rise

by Jo Black

India-Japan economic relationship received a big momentum in the year 2007-08.

The Government of Japan committed to provide 225 billion Japanese Yen (Rs. 85.82 billion) to India for undertaking nine new infrastructure projects in various parts of the country.

New projects approved with Japanese assistance and signed recently include Kolkata etro Project, Hyderbad Outer Ring Road Project, Hogennakal Water Supply Project, Tamil Nadu Urban Infrastructure Project, Haryana Transmission System Project and UP Forestry and Poverty Alleviation Project.

In addition, the Government of Japan also committed to fund Phase-II of Delhi Metro Project, which is seen as a shining example of India-Japan relationship.

Earlier in the year, the Government of Japan also committed to fund Goa Water Supply and Sewerage Project and Maharashtra Transmission System Project.

This is the highest ever Official Development Assistance (ODA) committed by Government of Japan to India, an increase of 22% over previous year.

India continues to be the highest recipient of ODA from Japan.

All the loan agreements concluded in March 2008 have been effectuated in a record time - within two weeks of signing of the agreements.

Further, the actual disbursements on ongoing projects reached a new high of 95 billion Japanese Yen (Rs. 35 billion approx.) during the year which is a hike of 70% over the previous year.

Both Governments have already started negotiations to undertake several key infrastructure projects like Dedicated Freight Corridor, Delhi Mumbai Industrial Corridor, Chennai Metro besides several other infrastructure and social sector projects in the year 2008-09.

Both Governments are also negotiating to set up an IIT in the country with involvement of Government of Japan.

India and Japan during the year have also agreed to have a Bilateral Currency Swap Agreement to meet any short term liquidity crisis.

Though, given the foreign exchange reserves of either country, such a situation is unlikely to happen, however, this agreement marks a major step in deepening the economic relations between two countries.

Both countries also set up two important forums namely, High Level Policy Dialogue on Economic Development and India-Japan Strategic Dialogue on Economic Issues to discuss all important economic issues.

These two dialogues will be held annually now.

In the last few years, the relations between two countries have steadily progressed based on India-Japan global partnership.

The visit of Prime Minister to Japan in 2006 and the visit of Japanese Prime Minister to India in 2007 have strengthened the relationship between the two countries.

During last couple of years, exchange of visits at various levels have also increased substantially.

 

 

 

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