During his recent whirlwind tour to New Delhi, Japanese Prime Minister Yoshihiko Noda assures continued ODA, signs $15 bn currency swap deal and shows keenness on Civil Nuclear Cooperation with India.
Adopting a common cause approach, Japan and India have agreed to further bolster their economic and strategic engagements with the former assuring the later of continued ODA (Official Development Assistance), signing a $15 bn currency swap deal and committing for facilitating joint ventures between Indian and Japanese enterprises for manufacturing and exporting 'rare earth' from India.
The joint statement crafted after the official level meeting in New Delhi between the visiting Japanese Prime Minister Yoshihiko Noda and Indian Prime Minister Manmohan Singh amply reflected the two countries ambitions to play a stealer role in promoting peace, stability and economic prosperity in East Asia as the two countries enter the 60th year of establishing diplomatic ties (in 2012).
Civil Nuclear Cooperation
However, on the civil nuclear cooperation with India, Japanese Prime Minister adopted a cautious approach even as the two sides expressed their keenness to expand ties in the sector after taking into consideration the safety aspects.
"We shall proceed with the negotiations on the (civil nuclear) agreement after giving due consideration to nuclear safety, nuclear disarmament and non-proliferation," Noda said at a joint press conference with Singh after the talks.
Japan attached importance to the voluntary commitments and actions India had expressed with regard to testing of nuclear devices, Noda said adding it was Japan's duty to share the experiences and the lessons learnt from the nuclear power accident at Fukushima and continue to contribute to nuclear safety around the world.
Nada said cooperation regarding peaceful uses of nuclear energy was conducive to Japan's efforts to address climate change and to strengthen the global partnership with India.
ODA and DMIC
Reaffirming that the Government of Japan would continue to provide its ODA at a "substantial level" to encourage India's efforts towards social and economic development including in the area of infrastructure development, Nada said Japan would extend loans totalling 134.288 billion yen to two new projects - 'Delhi Mass Rapid Transport System Project Phase III' and 'West Bengal Forest and Biodiversity Conservation Project' as the projects of first batch in the fiscal year 2011.
The two Prime Ministers emphasised the importance of an early realisation of the Western Dedicated Freight Corridor (DFC) which runs through the Delhi-Mumbai Industrial Corridor (DMIC) with Japan's support. In this context, both sides will expedite work on Phase II of the DFC with a view to starting implementation of the project as early as possible.
In order to effectively utilise the facility and to facilitate investments by Japanese companies, India expressed its commitment to resolve issues within the existing regulatory framework and guidelines of capital regulations and establish an inter-departmental consultation mechanism to provide expeditious solutions to issues raised by Japan during the course of implementation of the DMIC project.
Rail Technology
Recognising the importance of up gradation of speed of passenger trains to 160-200 kmph on existing Delhi-Mumbai route of the western leg of the Golden Rail Corridor for India's economic development, the two sides agreed to a continued cooperation and conduct the feasibility study of the project with Japan's cooperation in 2012.
Currency Swap
Noting that amid global economic uncertainties, ensuring the stability of the financial markets is all the more important for the stable economic development of the two countries, the two sides decided to enhance the earlier bilateral currency swap arrangement from $3 billion to $15 billion.
Experts say a swap arrangement may help support the Indian rupee, Asia's worst performing currency in 2011. India's reserves have declined because of the rupee depreciation.
The Japanese government and some of its agencies are funding several infrastructure projects in India, including the `1 lakh crore Delhi-Mumbai Industrial Corridor and the third phase of Delhi Metro. Traditionally, Japan has helped fund several infrastructure projects in India, while several top Japanese companies are again making renewed efforts to enter the lucrative Indian market. Experts say the currency swap deal is also a signal that Japan is keen to spread its influence.
