NEW DELHI: Japanese Prime Minister Yoshihiko Noda pushed for deeper ties with India Wednesday on a lightning 36-hour trip to New Delhi, where he was poised to sign a slew of accords.
The agreements include a currency swap deal that could help bolster the flagging Indian rupee and Noda told a business audience in the capital: “I am convinced we need to strengthen the economic partnership.” “Japan has technology and capital while India has a young workforce as well as abundant demand for infrastructure,” he said, calling the “complementarity” between the second- and third-largest Asian economies “unmatched”.
Coming on the heels of a trip to China where the main emphasis was political diplomacy, especially in the aftermath of the death of North Korean leader Kim Jong-Il, Noda’s visit to fast-rising India stressed economic ties.
Noda said a landmark free-trade agreement signed in February under which the high-tech nation and the South Asian giant will scrap tariffs on 94 percent of goods within a decade would strengthen relations.
The countries’ two-way trade stands at around $14 billion and is targeted to rise to $25 billion by 2014 — but that sum is still a fraction of Japan’s $300-billion trade with China.
Among the many deals expected to be signed on Wednesday was a multi-billion-dollar swap agreement that could assist India in defending the rupee, which has slid around 15 percent this year.
The currency swap, under which Japan could lend India dollars, is an expansion of a previous $3 billion accord and would help India cope with the rapid withdrawal of funds by overseas investors amid global financial turmoil.
“It makes a lot of sense for our two countries to expand their swap agreement for the stability of global currency markets,” Japanese government spokesman Nori Shikata told reporters in New Delhi. Japanese officials in Tokyo have put the amount of the swap line at around $10 billion. Noda was also expected to announce a $4.5 billion investment in an ambitious $100-billion infrastructure project to create a manufacturing and freight corridor from New Delhi to financial hub Mumbai.
“Japan is an invaluable and strategic partner in the process of India’s development,” Commerce Minister Anand Sharma told the same business audience.
The two countries were also expected to restart nuclear negotiations that stalled after the Fukushima nuclear disaster in March 2011.
Japan and India launched talks in June 2010 on a nuclear cooperation pact that would allow Tokyo to export its cutting-edge technology to the energy-hungry South Asian nation, a hotly contested market for atomic plants.
Japan is worried that nuclear-armed India has not signed the Nuclear Non-Proliferation Treaty but Shikata said “as a matter of basic policy we’re interested in promoting use of Japanese civilian nuclear technology in India”. Nonetheless the Fukushima nuclear accident, triggered by a huge earthquake and tsunami, has also clouded the possibility of any deal.