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インド - 日本経済関係
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India – Japan Economic Relations

Bilateral Trade

In the Financial Year(FY)2014-15, Japan-India trade reached $15.52 billion, showing decrease of 4.73% over FY2013-14, when the total bilateral trade was $16.29 billion. India's exports to Japan decrease by 20.96% as against the growth of 6.86% in its imports from Japan in FY013-14. The export-import statistics for the last seven years as per India's Ministry of Commerce data bank are as follows:

(In US$ dollar billion)


Year

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

EXPORT

3.02

3.63

5.09

6.33

6.10

6.81

5.39

India's total Export

185.29

178.75

251.13

305.96

300.40

314.41

310.34

% share

1.63

2.03

2.07

2.07

2.03

2.17

1.74

IMPORT

7.89

6.73

8.63

12.10

12.41

9.48

10.13

India's Total Import

303.69

288.37

369.77

489.32

490.74

450.20

448.03

% share

2.6

2.34

2.33

2.47

2.53

2.11

2.26

TOTAL TRADE(with Japan)

10.91

10.36

13.72

18.43

18.51

16.29

15.52

India's primary exports to Japan have been petroleum products, iron ore, gems and jewelry, marine products, oil meals, ferroalloys, inorganic/organic chemicals, etc. India's primary imports from Japan are machinery, transport equipment, iron and steel, electronic goods, organic chemicals, machine tools, etc. The trade balance is likely to continue to be in favour of Japan in the future, given the past trend. The share of the India-Japan bilateral trade has hovered in the range of 2.05% to 2.34% of India's total trade during the last five fiscal years. This is quite small considering the size of the two economies.

Japanese FDI into India

India is emerging as a favoured destination in Asia for Japanese FDI. DIPP statistics show that Japanese companies have made actual investments of $18.81 billion to India between April 2000 and June 2015. This accounted for 7% of total FDI inflow into India and made Japan the 4th largest investor in India. The number of Japanese affiliated companies in India has grown significantly in recent years and there were 1,229 Japanese companies operating in India. Japanese FDI into India has mainly been in automobile industry, electrical equipments, chemical, pharmaceuticals and telecommunications sector. The current level of FDI from Japan reflects neither the potential of Japan to invest nor the capacity of India to absorb. India's growing economy and stable investment climate offer large opportunities for Japanese companies.India also continued to rank at the top as the most attractive investment destination in the latest survey of Japanese manufacturing companies conducted by the Japan Bank of International Cooperation (JBIC).

Comprehensive Economic Partnership Agreement (CEPA)

In November 2004, the then Prime Minister of Japan, Mr. Junichiro Koizumi and the Prime Minister of India, Dr Manmohan Singh agreed to set up a Joint Study Group (JSG) to study all aspects and give its recommendations on strengthening economic relations between the two countries. The JSG in its Report of June 2006 concluded that there was a huge potential to deepen and expand existing bilateral economic relations. The negotiations for Comprehensive Economic Partnership Agreement (CEPA) commenced in January 2007 and were concluded after Fourteen rounds in September 2010.
During Prime Minister Dr. Manmohan Singh's visit to Tokyo in October 2010 for the Annual Bilateral Summit, the two Prime Ministers signed a Joint Declaration on the conclusion of CEPA between the two countries. In a separate Joint Statement on the ‘Vision for India-Japan Strategic and Global Partnership in the next Decade', the two leaders directed their relevant authorities to work towards early entry into force of CEPA and its smooth implementation. The CEPA was signed by Indian Commerce Minister Anand Sharma and the then Japanese Foreign Minister Seiji Maehara on 16thFebruary, 2011. The Agreement has become effective from 1stAugust 2011. In the Joint Statement on ‘Vision for the Enhancement of India-Japan Strategic and Global Partnership upon entering the year of the 60thAnniversary of the Establishment of Diplomatic Relations' issued on 28 December, 2011, the two Prime Ministers welcomed the entry into force of CEPA on 1stAugust 2011 and expressed hope that CEPA will further deepen the economic engagement in terms of trade in goods, services,investment and contribute immensely to mutual prosperity.

The Agreement is most comprehensive of all such agreements concluded by India and covers not only trade in goods but also Services, Movement of Natural Persons, Investments, Intellectual Property Rights, Custom Procedures and other trade related issues. The CEPA envisages abolition of tariffs over 94% of items traded between India and Japan over a period of 10 years. The Agreement is expected to give major boost to trade and investment ties between India and Japan.
The first meeting of the Joint Committee at the Commerce Secretary's level was held on 1stAugust 2011. The Joint Committee recognized the need for establishment of various Sub-Committees as per the Agreement. The second meeting of the Joint Committee was held in Tokyo on 17thOctober 2012 and it was decided to establish another Sub- Committee on Movement of Natural Persons.

Official Development Assistance (ODA)

Japan has been extending bilateral loan and grant assistance to India since 1958. Japan is the largest bilateral donor to India. Japanese ODA supports India's efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs. A noticeable positive trend in these years is that even as amount committed has stabilized or gone down somewhat, actual disbursement has increased. From 2007-08, Japanese side has introduced a Double Track Mechanism for providing ODA loans which allows us to pose project proposals to the Japanese side twice in a financial year. The interest rates applicable from April 2013 are: 1.4% per annum for general projects with a 30 years tenure including a grace period of 10 years. For environmental project, the interest rate is 0.30% per annum with a 40 years tenure including grace period of 10 years. These conditions have been further relaxed for STEP loans, in projects such as the Western Dedicated Freight Corridor.

Commitments and Disbursements of ODA loan from Japan for last several years has been as follows:

Year

Commitment

Disbursement

Yen Billion

Rs. Crore

Yen Billion

Rs. Crore

2002-03

120

4800

81

3240

2003-04

125

5000

80

3200

2004-05

134.466

5600

68.85

2907.88

2005-06

155.458

5910

68.68

2653.94

2006-07

184.893

6933.48

55.47

2082.51

2007-08

225.13

8419

94.65

3455.18

2008-09

236.047

11713.32

122.56

5861.48

2009-10

218.2

10694.93

128.95

6553.43

2010-11

203.566

11197.81

123.84

6581.67

2011-12

134.288

8303.01

139.22

8497.43

2012-13

353.106

23179.77

113.964

7259.95

2013-14

365.059

21903.54

144.254

8482.03

2014-15

140.430

7697.55

162.177#

8825.92

#This is highest ever ODA loan disbursement in a financial year in Yen terms.

As on 30th November, 2015, sixty five projects are under implementation with Japanese loan assistance. The loan committed for these projects is Yen 1706.003 billion (i.e. Rs.91301 Crore approximately). Cumulative commitment of Japanese ODA loan to India has reached Yen 4415.84 billion on commitment basis for two hundred and forty seven individual loan agreements til November 24, 2015.In 2015-16, a significant rise in disbursement is expected. On May 15, 2015, JICA signed a Yen 21.79 billion of ODA loan agreement for the Odisha Transmission System Improvement Project.  Other loan agreements signed recently include: with IREDA and SIDBI for promotion of renewable energy projects, the Dedicated Freight Corridor Phase 3(II) and for abatement of pollution of the Mula-Mutha river at Pune. Projects in the pipeline are: Chennai and Ahmedabad Metro projects, Bengaluru Peripheral ring Road project, Horticulture Intensification by Micro Drip Irrigation in Jharkhand, the North East Connectivity Improvement project (Phase I) and the Mumbai Trans Harbour Link.

The Dedicated Freight Corridor (DFC)

The Dedicated Freight Corridor (DFC) project is one of the most ambitious projects that Indian Railways has taken up. It is intended to meet the transport requirements of the two busy trunk routes (Eastern and Western Corridors) for the next 15-20 years. Japan and India are committed to the execution of the Western corridor of the DFC project through an ODA loan utilizing Japan's Special Terms of Economic Partnership (STEP). Efforts are being made for an early realization of the Western Corridor of the DFC which will be the backbone of the Delhi Mumbai Industrial Corridor (DMIC). The Western DFC project would focus on: construction of new dedicated freight lines; installation of automated signal & telecommunication and introduction of electric locomotives with high-speed & high-capacity transportation. Procurement for civil, electrical and signaling packages has been started.

Delhi-Mumbai Industrial Corridor (DMIC)

In pursuance of an MOU signed between the Government of India and the Government of Japan during the Hon'ble Prime Minister's visit to Tokyo in December 2006 to promote investments and explore opportunities for mutual cooperation, Government of India accorded ‘in principle' approval to the project outline of Delhi - Mumbai Industrial Corridor (DMIC) Project in August 2007.  The DMIC project is proposed to be implemented on either side of the 1483 km long Western Dedicated Rail Freight Corridor between Dadri (UP) and JNPT (Navi Mumbai). The project seeks to create a strong economic base with a globally competitive environment and state-of-the-art infrastructure to activate local commerce, enhance investments and attain sustainable development.  The DMIC spans the six States of Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Gujarat and Maharashtra and majority of projects therein are envisaged to be implemented through Public-Private Partnership mode.  The DMIC Development Corporation (DMICDC) was incorporated in January 2008 for project development, coordination and implementation of the numerous projects. Looking at the magnitude and diversity of the project, the entire project has been planned to be implemented in phases. Initially, 8 nodes/ cities have been taken up for development in the first phase.

The master plans for all the nodes except Dadri Noida Ghaziabad Investment Region in Uttar Pradesh has been completed. Land acquisition for the new industrial regions/areas as well as for the Early Bird Projects identified for development as model initiatives are in different stages of progress in different States. Finalization of Shareholders Agreement and State support agreement for formation of SPVs for the nodes is in advanced stage. The DMIC trust has taken investment decisions on nine projects. Formation of SPVs for various projects cleared by the trust has been initiated and the States have been requested by DMICDC to expedite their formation. The issues relating to the Seawater Desalination Project at Dahej, Gujarat are being resolved by DMICDC in consultation with the State Government and the Japanese authorities and consortia, so that the implementation of the project can commence at the earliest.

DMIC and CBIC Highlights

  • In addition to new manufacturing hubs, DMIC envisages the development of infrastructure linkages like power plants, assured water supply, high capacity urban transportation and logistics facilities as well as important interventions like skill development programs for providing employment opportunities of youth. 
  • Progress is on in the development of industrial cities at Dholera in Gujarat and ShendraBidkin in Maharashtra, the integrated industrial townships at Greater Noida in Uttar Pradesh and VikramUdyogpuri, near Ujjain in Madhya Pradesh.
  • Rapid progress has made in the Chennai Bengaluru Industrial Corridor and the finalization of the perspective plan for the CBIC region.
  • The Master Plan and the Development Plan of the three cities, viz. Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka have been completed. Preliminary Environment Impact Assessment Study for these nodes is in progress. The State Governments have been requested to finalize the legal framework for signing of State Support Agreement and Share Holder Agreement.

Japan-India Business Leaders' Forum (BLF)

Japan-India Business Leaders' Forum was announced during Indian Prime Minister's visit to Japan in December 2006. The First Meeting of the BLF was held in August 2007 at the time of Japanese PM Abe's visit to India. The Joint Proposal of the Forum stressed the importance of early conclusion of Comprehensive Economic Partnership Agreement (CEPA), cooperation in hardware and software development, environmental and energy fields and high technology trade. The recent meeting of India Japan Business Leaders Forum (IJBLF) took place in December 2015 in New Delhi during the visit of H. E. Prime Minister Shinzo Abe to India.  The Joint Proposal of the Forum stressed the importance of improving the business environment through effective use of IJCEPA, importance of infrastructure development and Japan-India cooperation, cooperation in strategic areas and global cooperation based on the Japan-India Strategic and Global Partnership.

February 2016