india & japan signed two agreement in tokyo
TRANSCRIPT
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INDIA & JAPAN SIGNED TWO
AGREEMENT IN TOKYO
Presented by:Parneet Singh
MBA (1st Sem)
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History
Historically, India and Japan have deep rooted links through the
oriental culture and religion, which had their origin in India.However, the two countries have grown through different paths ofdevelopment for most part of last few centuries.
In 1939, the Second World War engulfed the whole world. Atthe end of WWII, Japan was essentially a ruined nation but thepeople had strong determination and will to stand again. Aroundthe same time, India got freedom from the British rulers, and theprocess of development started under the enlightened vision ofnational leaders. Both Japan and India adopted the look Westpolicy for faster development. While Japan became a close ally of
USA and adopted capital oriented economy, India chose a socialistapproach with an emphasis on self-reliance. Although it resultedin slower pace of development, it helped us establish a broad basein science and technology. On the other hand, Japan progressedon the path of market economy with full support from USA, andsoon became an economic super power.
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Japans priority strategies for Science
& Technology
(i) Promotion of basic research
In the pursuit of universal knowledge from a longterm perspective, aiming to accumulate
intellectual achievements to generate newknowledge constantly
(ii) Prioritization of R & D in response to issuesimportant to the state and society.
For ensuring sustained economic developmentthrough vitalization of economy and industry, andensuring safe and secure lives for its people.
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Priority strategic areas
i) Life Science
(ii) Information & Communication
(iii) Environment
(iv) Nanotechnology and materials
(v) Energy
(vi) Manufacturing sciences/technologies
(vii) Infrastructure
(viii) Frontier science
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Bilateral Trade
In the Financial Year (FY) 2011-12, Japan-India
bilateral trade reached $18.43 billion, showing
increase of 34.33% over FY 2010-11, when the
total bilateral trade was $13.72 billion. India'sexports to Japan grew by 24.36% as against
the growth of 40.2% in its imports from Japan
in FY 2011-12. The export-import statistics forthe last seven years as per India's Ministry of
Commerce data bank are as follows:
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Bilateral Trade
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
EXPORT 2.48 2.87 3.86 3.02 3.63 5.09 6.33
Indias Total
Export
103.09 126.41 163.13 185.29 178.75 251.13 305.96
%Share 2.41 2.27 2.37 1.63 2.03 2.07 2.07
IMPORT 4.06 4.59 6.32 7.89 6.73 8.63 12.10
Indias Total
Import
149.17 185.73 251.65 303.69 288.37 369.77 489.32
%Share 2.73 2.48 2.52 2.6 2.34 2.33 2.47
TOTAL
TRADE (with
J apan)
6.54 7.46 10.18 10.91 10.36 13.72 18.43
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Indias primary exports to Japan have been petroleum
products, iron ore, gems and jewelry, marine products,oil meals, ferroalloys, inorganic/organic chemicals, etc.Indias 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 inthe future, given the past trends. The share of theIndia-Japan bilateral trade has hovered around 1 percent of Japan's total foreign trade in the last threeyears. It was in the range of 2.21 to 2.46 of India's total
trade during the last five fiscal years. This is quite smallconsidering the size of the two economies.
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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 $12.66 billion to India
between April 2000 and June 2012. This accounted for 7% of
total FDI inflow into India and made Japan the 4th largest
investor in India. The number of Japanese affiliatedcompanies in India has grown significantly over the last five
years and more than 800 Japanese companies are operating
in India.Japanese FDI into India has mainly been in automobile
industry, electrical equipments, pharmaceuticals, trading 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. Indias growing economy and
stable investment climate offer large opportunities for
Japanese companies.
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The Japan Bank for International Cooperation (JBIC) conducts
an annual survey of Japanese companies of overseas business
operations to determine both the current trend and thefuture outlook of Japanese manufacturing companies of
business operations abroad. The 2008 survey shows that India
continued to be the most promising destination for overseas
business operations over the long term (the next 10 years or
so). India has also considerably closed the gap with China as adestination for medium term (next 3 years) business
operations. The 2010 survey put India ahead of China as the
most attractive long-term overseas investment destination for
Japanese manufacturers (2nd-most attractive after China inthe medium term). In the 2011 survey also China and India
were ranked 1st and 2nd respectively as most promising
countries for overseas business over medium term.
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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 StudyGroup (JSG) to study all aspects and give its
recommendations on strengthening economic relationsbetween the two countries. The JSG in its Report ofJune 2006 concluded that there was a huge potentialto deepen and expand existing bilateral economicrelations. The negotiations for ComprehensiveEconomic Partnership Agreement (CEPA) commencedin January 2007 and were concluded after Fourteenrounds in September 2010.
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During Prime Minister Dr. Manmohan Singhs visit toTokyo in October 2010 for the Annual Bilateral Summit,the two Prime Ministers signed a Joint Declaration onthe conclusion of CEPA between the two countries. In a
separate Joint Statement on the Vision for India-JapanStrategic and Global Partnership in the next Decade,the two leaders directed their relevant authorities towork towards early entry into force of CEPA and itssmooth implementation. The CEPA was signed by
Indian Commerce Minister Anand Sharma and the thenJapanese Foreign Minister Seiji Maehara on16thFebruary, 2011. The Agreement has becomeeffective from 1st August 2011.
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The first meeting of the Joint Committee atthe Commerce Secretary's level was held on1st August 2011. The Joint Committee
recognized the need for establishment ofvarious Sub-Committees as per theAgreement. The second meeting of the JointCommittee was held in Tokyo on 17th October
2012 and it was decided to establish anotherSub-Committee on Movement of NaturalPersons.
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Official Development Assistance
(ODA)
India has been the largest recipient of Japanese ODA
since 2003-04. Cumulative commitment of ODA till
September 2012 reached Yen 3587.302 billion on
commitment basis. As on 14 September 2012, 59projects were under implementation with Japanese
loan assistance. The loan amount committed for
these projects is Yen 1214.811 billion. These projects
are in the sectors of power, environment and forests,urban transportation, urban water supply and
sanitation, rural drinking water supply, tourism,
irrigation, agriculture, shipping, railways, renewable
energy and financial services.
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Dedicated Freight Corridor (DFC)
The Dedicated Freight Corridor (DFC) project is one of the
most ambitious projects that Indian Railways has ever takenup. 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 execution
of the Western corridor of the DFC project through an ODA
loan utilizing Japan's Special Terms of Economic Partnership
(STEP). In the Joint Statement issued during Japanese Prime
Ministers visit to India on 28 December, 2011, the two Prime
Ministers emphasized the importance of an early realization
of the Western Corridor of the DFC which runs through theDelhi Mumbai Industrial Corridor (DMIC) with Japans
support. In this context, both sides agreed to expedite work
on Phase II of the DFC with a view to starting implementation
of project as early as possible.
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JICA assistance for Phase-I (Rewari-Vadodara
segment of 950 kms) has been estimated at Yen 405
billion. The loan agreement for Engineering Servicesfor Phase-I for Yen 2.6 billion was signed on October
27, 2009 followed by agreement on Phase-I funding
by JICA in March 2010 when the first tranche of main
loan (Yen 90.262 billion) was signed. Contract forEngineering Services consultancy was signed by the
Dedicated Freight Corridor Corporation of India
Limited (DFCCIL) in May 2010. Engineering Services
loan agreement (Yen 160 billion) for Phase-II(Jawaharlal Nehru Port-Vadodara & Rewari-Dadri,
584 kms) had also been signed in July 2010. Main
loan for Phase II is targeted for signing in 2012-13.
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Delhi-Mumbai Industrial Corridor
(DMIC):
In pursuance of an MOU signed between theGovernment of India and the Government ofJapan during the Honble Prime Ministers visit toTokyo in December 2006 to promote investments
and explore opportunities for mutualcooperation, Government of India accorded inprinciple approval to the project outline of Delhi- Mumbai Industrial Corridor (DMIC) Project in
August 2007. The DMIC project is proposed to beimplemented on either side of the 1483 km longWestern Dedicated Rail Freight Corridor betweenDadri (UP) and JNPT (Navi Mumbai).
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The project seeks to create a strong economic base with a
globally competitive environment and state-of-the-artinfrastructure 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 in DMIC are envisaged to be implemented throughPublic-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 ofthe project, the entire project has been planned to be
implemented in phases. Initially, 7 nodes/ cities have been
taken up for development.
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Japan-India Business Leaders Forum
(BLF)
Japan-India Business Leaders Forumwasannounced during Indian Prime Ministers visit toJapan in December 2006. The First Meeting of theBLF was held in August 2007 at the time of
Japanese PM Abes visit to India. The JointProposal of the Forum stressed the importance ofearly conclusion of Comprehensive EconomicPartnership Agreement (CEPA), cooperation in
hardware and software development,environmental and energy fields and hightechnology trade. The Second Meeting was heldin October 2008.
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The two sides emphasized EPA as a necessary
institutional infrastructure to further accelerate and
consolidate expansion of bilateral investment and
trade. More frequent meetings between thebusiness leaders are necessary to remove
institutional hurdles and bring about greater
liberalization of trade and investment. The 3rd
meeting of BLF was held in Tokyo in October 2010.
Business Leaders of both sides recognized that India-
Japan CEPA is the cornerstone to further evolve and
establish strategic economic partnerships. However,the public and private enterprises of India need to
put in further concerted efforts to nurturing this into
a robust economic alliance from which both
businesses benefit.
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Conclusion
Both, the Governments of India and Japan has signed twoagreement on 16 Nov 2012.The agreements signed up between the two countries,included two agreements:Agreement between India andJapan on Social Security
Memorandum between the Department of Atomic Energyof India and the Ministry of Economy, Trade and Industry ofJapan on Cooperation in the Rare Earths Industry in India.
The conclusion and signing of these agreements will furtherenhance and strengthen the India-Japan Strategic andGlobal Partnership.
Hope, Our Government will be able to attain benefits from
this agreement.
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