India PM calls for closer economic ties with Japan

JAPAN: Visiting Indian Prime Minister Manmohan Singh called Wednesday for more Japanese trade and investment to the counter the economic slowdown triggered by the global financial crisis.

Singh, who arrived Tuesday, acknowledged that India has been hurt by the international credit crunch and has not been able to maintain its previous booming 9 percent annual growth.

“As we work to put India on a higher growth path with greater inclusiveness, India and Japan can cooperate in many ways,” he said in a speech to Japanese business leaders.

“Both of us have the wherewithal to become the magnet of growth in Asia and globally.”

Singh, scheduled for a summit with Prime Minister Taro Aso later Wednesday, said Japan and India were completing an agreement on a Japanese loan for construction of a freight railway connecting New Delhi and Mumbai.

Talks were also going well on the New Delhi-Mumbai Industrial Corridor, an area designed to be a manufacturing and technological center for India, he said at a Tokyo hotel.

Japan is participating in dozens of construction and other projects in the corridor, according to the Japanese Foreign Ministry. Japan’s direct investment in India has been growing, reaching 178 billion yen (US$1.8 billion) last year, tripling from the previous year’s nearly 60 billion yen (US$600 million), according to the Japanese government.

Top companies have set up shop in India, including automakers Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Corp. as well as Sony Corp. and Panasonic Corp. in electronics. The number of Japanese businesses operating in India has risen to more than 550.

But Singh said investment from Japan still falls short of what it could be.

He urged Japan to contribute to technology, infrastructure projects and training, and he expressed hopes for Japan and India reaching a free trade agreement.

Talks on a trading partnership began in December 2006 but have not produced an agreement.

Singh, who met with the Japanese emperor and empress earlier Wednesday, is expected to depart Thursday for a meeting of Asian leaders in Beijing.

Singh noted that bilateral trade for India and Japan reached US$10 billion for the first time in 2006-2007, and appears on track to reach the targeted US$20 billion by 2010. Japan’s exports to India stood at about US$6.2 billion for the fiscal year ended March, up from US$4.5 billion the previous fiscal year. Japanese imports from India edged up to US$4.2 billion from US$4.1 billion.

Both sides see room for growth as Japan still trails about a dozen other nations, including the U.S. and China, in trade with India. India has been the biggest recipient of Japanese aid for the last five years.

Japan has given money for a subway in the southern city of Chennai, roads, reforestation and energy conservation for small and medium-size businesses in India.

“To Japanese investors I would say, India provides a large, growing and young market,” Singh said.

TOKYO, Wednesday, AP