Giving a timely push to India’s manufacturing sector, Japan, on Wednesday, committed $4.5 billion for the setting up of National Investment and Manufacturing Zones as Commerce Minister Anand Sharma said that Asia’s two largest economies were on course to achieving $25 billion trade by 2014.
Trade between India and Japan was a paltry $13.82 billion in 2010-11, but signing of the Comprehensive Economic Partnership Agreement (CEPA), earlier this year, is expected to enhance commerce between the two countries.
“The year 2011 is a watershed year in our relations as we signed CEPA in February, which has begun a whole new chapter in our economic partnership. I am hopeful that the CEPA will further deepen economic engagement in terms of trade in goods, services and investment, contributing immensely to mutual prosperity,” Sharma said, addressing the business delegation led by Japanese Prime Minister Yoshihiko Noda.
He also sought greater Japanese cooperation in India’s infrastructure sector, which envisages an investment of $1 trillion in the next five years.
India’s growing agro-processing sector is another area where India and Japan can be partners, the minister said.
“We aim to double our food processing capabilities in the next 5 years and the establishment of 64 fully equipped Agro Processing Zones and Food Parks provides an area of immense opportunities.
This is a segment where Japan can be an able partner to develop cross sectoral linkages in the entire value addition chain from agriculture to retail, packaging and logistics,” Sharma said. The minister also said India’s pharmaceutical companies can be of immense value in providing affordable healthcare needed for Japan’s demographic profile.
“India has a huge pool of trained pharmaceutical scientists, doctors and researchers, which opens up avenues for joint collaborative research for new drug discoveries,” he said.
Sharma said that minimum investment in an industrial corridor being built by India with help from Japan between Delhi and Mumbai would be more than $100 billion.
The first phase of the corridor is scheduled to be ready by 2012 and is expected to boost Indian economy in a major way, where, according to economists, creaky infrastructure takes 2 per cent off annual economic growth.
The Delhi-Mumbai Industrial Corridor will cover six states of Rajasthan, Gujarat, Maharashtra, Haryana, Uttar Pradesh and Madhya Pradesh.
The Japanese Prime Minister sought greater economic cooperation between the two countries and was of the view that the growing Indian middle class can be a driving force if manufacturing sector grows in the country.
“We should also capitalise on our complementarities,” Noda said, adding that India and Japan were stepping up cooperation in various areas, including areas of nuclear cooperation and economic partnership.