The governments of India and Japan signed an agreement on Thursday for doubling of Japanese investment into Indian firms in the next five years, and boosting two-way trade. The signatories were Commerce and Industry Minister Nirmala Sitharaman and Japan’s minister for economy, trade and industry, Yoichi Miyazawa.
The plan was categorised into five broad areas: development of selected townships in India, promotion of investment and infrastructure development, further development and cooperation in information technology, enhancing cooperation in strategic sectors and Asia-Pacific economic integration.
Signing of the action plan is seen "as a step further in improving the trade relationship between India and Japan as a follow-up of Prime Minister Narendra Modi's visit to Japan last year," stated a release quoting Miyazawa.
According to Sitharaman, the agenda was in line with PM's Make in India plan that will further investments from Japan into the country's manufacturing sector.
Last year, the Department of Industrial Policy and Promotion under the ministry of commerce and industry had set up a mechanism to fast-track Japanese investments named 'Japan Plus.'
During Modi's visit, Japanese Prime Minister Shinzo Abe had set a target of 3.5 trillion yen ($33.5 billion) of public and private investment and financing from Japan including official development assistance to India to be made over five years. There are already 1,209 Japanese firms operating in India out of which 137 have started their operations after October 2013.
Japan is the fourth largest foreign direct investment (FDI) contributor to India, with major interests in pharmaceuticals, automobiles, and services sectors accounting for 7.46 per cent of total FDI equity inflows into India. During April 2000-November 2014, FDI from Japan into India stood at $17.55 billion.
Under the Tokyo Declaration for Japan-India Special Strategic and Global Partnership, Modi and Abe have set a target of doubling Japanese FDI and the number of Japanese firms in India by 2019.
‘MAKE IN INDIA’ WITH HELP FROM JAPAN
Indo-Japan agreement is categorised into five broad areas
Development of select townships in India
Promotion of investment and infrastructure development
Further development and cooperation in information technology
Enhancing cooperation in strategic sectors
- Asia-Pacific economic integration