A new fund to spruce up infrastructure, a $4.5 billion soft loan for the 1,468-km Delhi-Mumbai Industrial Corridor project and a political push to the elusive Comprehensive Economic Partnership Agreement (Cepa) with Japan tops Prime Minister Manmohan Singh’s agenda during his three-day bilateral visit to Tokyo.Besides, the Indian Prime Minister will also engage his Japanese counterpart Taro Aso on the financial turmoil that has changed the economic landscape for the world as a whole. Earlier in the day, Commerce and Industry Minister Kamal Nath said east Asia must be a “driving force for global growth” after discussions with Nikai Toshihiro, Minister of Economy, Trade and Industry.According to government sources, negotiations on Cepa that started January 2007 will take at least another six months to conclude. New Delhi blames Tokyo for erecting untenable non-tariff barriers in allowing market access to Indian pharmaceutical and agriculture exports. Besides, Japan is not keen to open up its financial sector that will allow Indian banks to tap business in Asia’s second largest economy.Another official source who is part of the PM’s delegation, said, the talks on Cepa have moved beyond tariffs. “Tariffs do not really matter much. Our own rates are very low. It is the rest of the pact: market access, the terms on which we get access, and issues relating to rules of origin that are taking time,” he said. Bilateral trade between India and Japan is $10 billion now and is expected to grow 50 per cent by 2010.As far as the DMIC is concerned, three Japanese companies including Honda have already committed to set up early bird projects in the proposed corridor. “The idea of a corridor itself owes its genesis to Japanese companies in India,” said a source. Japan is likely to announce a Yen 450 billion or $4.5 billion soft loan for the DMIC project, the source said.The Prime Minister is also likely to make a strong pitch for Japanese investments in India given the huge surpluses its economy generates. He is scheduled to address business leaders over a luncheon hosted by Keidanren, the biggest chamber of commerce in Japan. Before that he will meet the Indian business delegation led by Mukesh Ambani of Reliance Industries Ltd.In fact, New Delhi is the largest beneficiary of Japanese Official Development Assistance (ODA), having received $1 billion or 30 per cent of the total ODA last fiscal. “The number of official and trade delegations from Japan to India have been phenomenal in the last two years. This suggests Japan’s heightened level of interest in our country,” the source said.
