Friday, 17 May, 2024
By: Yash Gupte
The bilateral trade between both the nations crossed the mark of $20 billion in 2021-22. Image Source: IANS
Throughout the past several decades, India has received the most official development assistance (ODA) loans from Japan. Delhi Metro is one of the most successful examples of Japanese cooperation through the utilization of ODA.
Japanese Prime Minister Fumio Kishida arrived in New Delhi on Monday, March 20, 2023 on a roughly 27 hour-long official visit to India. The Japanese prime minister is expected to present his vision for a "free and open Indo-Pacific," highlighting India's growing significance in the region. According to reports, Mr. Fumio Kishida will unveil a new plan and strategy for a ‘free and fair Indo-Pacific in New Delhi, seeking to secure India's cooperation in countering China's expanding influence in the region. Both India and Japan are the members of the ‘Quadrilateral Security Dialogue' or more commonly known as ‘Quad.’ This security agreement is considered as a counter, alongside Australia and the United States, to China's growing influence in the region.
During the visit, PM Kishida is expected to deliver the 41st Sapru House lecture at the Indian Council of World Affairs in New Delhi after meeting PM Narendra Modi at Hyderabad House. He also visited the Rajghat to pay tributes to Mahatma Gandhi. Also, apart from discussion on different common security challenges coming from China, PM Kishida and PM Modi will be visiting the Bal Bodhi tree at the Buddha Jayanti Park in New Delhi. The Bal Bodhi tree is a sacred tree from Gautam Buddha’s era.
In a tweet, PM Fumio Kishida marked that, “I will head to India to meet with Prime Minister Modi Narendra Modi. This year, Japan holds the G7 presidency while India chairs the G20. Prime Minister Modi and I will exchange views on the role our two countries should play as we work to resolve mounting international challenges. I also intend to further strengthen the Special Strategic and Global Partnership between India and Japan.”
India and Japan share a very unique relationship and partnership in terms of diplomacy, defence, economy and other regional and global issues. India -Japan peace treaty was one of the first peace treaties Japan signed after World War II. The Indo-Japanese collaboration in defence and security has developed over time via bilateral and multilateral exercises like Dharma Guardian and Malabar, respectively. The economic ties between Japan and India have been gradually growing and deepening in recent years. Trade between the two nations has grown in scope. Japan was the 12th largest trading partner for India in 2020. Additionally, direct investment from Japan to India has increased, and Japan was the 4th largest investor in India in FY2020. Throughout the past several decades, India has received the most official development assistance (ODA) loans from Japan. Delhi Metro is one of the most successful examples of Japanese cooperation through the utilization of ODA. Japan also endeavours to cooperate in supporting strategic connectivity linking South Asia to Southeast Asia through the synergy between ''Act East'' policy and ''Partnership for Quality Infrastructure.”
Source: Ministry of Commerce and Industry
The historic Comprehensive Economic Partnership Agreement (CEPA) between India and Japan, which went into effect in August 2011, has boosted economic and commercial ties between the two nations. Both Prime Ministers stated their intention to achieve JPY 5 trillion in public and private investment and financing from Japan to India in the following five years, to finance appropriate public and private projects of mutual interest, during the visit of PM Fumio Kishida, to India in March 2022.
Except 2019-20 and 2020-21, the trade between India and Japan has continued to grow over the years. The bilateral trade between both the nations crossed the mark of $20 billion in 2021-22. In the year 2022-23 (April-January), the total trade (imports and exports) between India and Japan stands at $17.15 billion. India’s top ten exports to Japan include organic chemicals, nuclear reactors, mineral fuels, electrical machinery, aluminium articles, iron and steel etc. India and Japan have signed a number of agreements, treaties, MoUs and entered into a number of partnerships in order to boost trade and strengthen the unique relationship between them.
On November 16, 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Economy, Trade and Industry (METI) signed a Memorandum of Cooperation on the India-Japan Industrial Competitiveness Partnership to work together to explore ways to improve India's industrial competitiveness with a view to strengthening their Special Strategic and Global Partnership. Talking about the FDI from Japan, Investment from Japan has primarily gone into the automotive, electrical equipment, telecommunications, chemical, financial (insurance), and pharmaceutical industries in India. Japanese Investment into India increased from $2.61 billion to $4.7 billion in FY2015–16 and FY2016–17, respectively. Japanese FDI was $2.96 billion in FY 2018–19.
Japan is India's largest bilateral donor and has been providing loans and grants to the country since 1958. Japanese ODA supports India's initiatives for faster economic growth, particularly in key sectors including transportation, power, and environmental and human-needs-related projects. The Delhi-Mumbai Industrial Corridor, which will include twelve industrial townships, the Mumbai-Ahmedabad High Speed Rail, the Western Dedicated Freight Corridor, and the Chennai-Bengaluru Industrial Corridor, are all massive projects on the anvil which will transform India in the current decade.
According to the Ministry of Foreign Affairs of Japan, around 40,752 Indians are residing in Japan as of June, 2022 and 8,145 Japanese nationals reside in India. The economic relations and the cooperation between India and Japan shows that both the countries have transformed their diplomatic relationship in to a strategic partnership and are closely collaborating with each other in different fields.
