External Affairs Minister Salman Khurshid on Tuesday said economic engagement between India and Japan creates a win-win situation for both countries and will help foster growth in the second and third largest economies of Asia.
Khurshid said 'a second factor which augurs well for the India - Japan partnership is that there is consensus in both our nations and across the political spectrum that a strong relationship between our countries is in our national interests and is good for Asia and the world at large'.
"Therefore, whatever political party may be in power either in Japan or in India, our bilateral ties will continue to prosper and grow. We have indeed experienced exactly this through the changes of Government in Japan over the past few years," he added.
In his speech at Rikkyo University here, Khurshid said the end of the Cold War and the beginning of a new Century provided the necessary conditions for a quantum leap in interaction and exchange between the two countries.
"It was the vision and leadership of then Japanese Prime Minister Yoshiro Mori which helped convert potential into practice. His historic, path-breaking visit to India in the year 2000 provided the much-needed impetus for our relations to be taken to a new level. Guided by his strategic vision both nations saw the merit in substantive bilateral engagement in diverse spheres," said Khurshid.
"What Mori-san started at that point in time has been taken to its logical conclusion by succeeding Governments both in Japan as well as in India," he added.
Khurshid said the economic engagement between India and Japan has expanded significantly over the past few years
"Our economic engagement has expanded significantly over these past few years, since we established our Strategic and Global Partnership in 2006. We have implemented a Comprehensive Economic Partnership Agreement since August 2011. It has been well over a year since then and the initial results in terms of greater flows of trade and investment are heartening after factoring in the depressed global economic conditions that have ensued in this period," he added.
Khurshid also expressed his delight over the fact that India continues to poll very high amongst Japanese firms as a long-term investment destination.
"The number of firms from your country which have operations in India is over 1000 now, and while we can take some satisfaction from this fact, naturally we want many more of your firms to invest in India. Very frankly, there is a perfect fit here since India is a labour abundant country with relatively low wage rates. Japan is abundant in capital and has technology and management expertise, which can be married to our competitive advantages. We are also immensely aware of the need to upgrade physical infrastructure in India whether at our ports or our highways and roads. That is why we plan to invest about 1 trillion US Dollars in infrastructure during the period 2012 to 2017," said Khurshid.
"We are confident that in the near future the infrastructure needs of corporate Japan will be met in India. We have also recently announced a new manufacturing policy to encourage and support this very important segment of the economy. Jobs for our young population will come mainly from manufacturing and we believe Japanese firms will find a win-win situation in this regard in our country," he added.
Khurshid further said 'Suzuki, of course, is a household name in India thanks to the automobiles it has been producing in India since the 1980s'.
"They were well ahead of the curve in entering India, had first mover's advantage and therefore even today have the largest market share in our domestic car market. What I find very interesting about the Suzuki model, is that they have now also made India a manufacturing hub for export of cars to the Middle East, North Africa and even East Europe," said Khurshid.
"We are delighted that other famous Japanese auto firms such as Nissan and Toyota have followed suit. The ancillary firms have begun to come to India more recently and this relatively recent development makes us sure that we are on the right track for enhancing foreign investment flows," he added.
Asserting that India continues to be the largest recipient nation of Japanese Official Development Assistance for many years in a row, Khurshid said : " The Government and people of India greatly appreciate this help from the people of Japan. This aid has been utilized in large, iconic infrastructure development projects such as the Delhi Metro project, which has revolutionized travel within the city for millions of commuters. Seeing this successful example, other cities of India are also vying to build underground metro projects, some of them with Japanese assistance."
"Similarly, the Western Dedicated Freight Corridor project will help accelerate the speed with which goods are transported between Delhi and Mumbai and will benefit the Indian economy greatly. The Delhi Mumbai Industrial Corridor is another Japanese funded project in India which has enormous significance since it will establish new towns and cities which will become manufacturing hubs and will combine modern technologies to make them smart cities. Many of these ventures are futuristic in their orientation and will positively impact modernization and development in India," he added.