With Japanese car makers protesting against India’s move to drop duties on vehicle imports from Europe in the free trade pact, Japanese ambassador to New Delhi Akitaka Saiki chose to allay concerns. He said that once India’s comprehensive economic partnership agreement (Cepa) kicks in from September this year, it would give Japanese original equipment manufacturers (OEMs) an added impetus.
?Japanese automakers (Toyota, Honda, Nissan) should not worry since the proposed trade agreement will ensure enough parity and relaxations. The CEPA will be looking at over 90% tariff reduction by India within 10 years,? he said. Interestingly, the auto makers also met with Heavy Industry Minister Praful Patel on Monday where the issue of the India-EU FTA was also brought up.
According to media reports, India has accepted EU’s demand to drop import duty on the luxury vehicles. This has has been strongly opposed by not only the domestic auto industry but also their Japanese counterparts arguing that it would give an unfair advantage to the European OEMs.
Meanwhile, the ambassador said that infrastructure was an area that would see an area where there would be a lot of cooperation between the two countries. ?Infrastructure is a very important area for attracting investments. Industries require infrastructure, so do other economic activities,? he said.
According to him, the Japanese investors and government would like to see better infrastructure facility in India, with which Japan expects to double trade volumes and investments in the next five years.
Also expressing similar concerns Shoji Shiba, who is also a global manufacturing expert, said that if India wants to become a global manufacturing hub then ?it needs to build up the electronics industry more powerful and robust.?
Apart from this, also adding on the Delhi-Mimbai Industrial Corridor (DMIC), Saiki said that the Japanese side was satisfied with the progress being made on crucial infrastructure projects like DMIC and the Delhi freight corridor (DFC).
Further on being asked over the question of land acquisition needed for these mega-infrastructure projects, Saiki said that every farmer has a right to keep his land and that the acquisition process should be transparent.
The ambassador also denied that Japan was curtailing its economic development assistance to India as a result of the twin tragedies of earthquake and tsunami that ravaged the island nation in March. ?On the contrary, our economic assistance to India is in progress. With this fiscal year’s official development assistance’s (ODAs) request already received. India is the largest receiver of our ODA,? Saiki said.
Currently major industrial and infrastructure projects like Delhi Metro receive the Japanese ODA.
The envoy said that with CEPA coming into force, sectors like automobile and other manufacturing activities in India would get a boost.
The CEPA between India and Japan will significantly increase bilateral trade and investment.
Apart from this, Saiki also noted that Japan was interested in investing in West Bengal and Tamil Nadu after having seen the recently transition in the two governments.
?We are interested in investing in these states. I have already met (West Bengal Chief Minister) Mamata Banerjee and told that Japan would be interested in investing in the state,? Saiki said.
According to him, infrastructure development in both the states was a key to attract investments, adding that his side was studying for investment possibilities.
The trade between the countries is also expected to double as a result of CEPA. Currently, exports from India to Japan are 2.2% of India’s entire exports, while exports from Japan to India stood at 0.9% of Japan’s total exports.
Expressing similar sentiments, CII director-general, Chandrajit Banerjee said, ?SMEs’ role is critical for the growth of Indian manufacturing in light of India becoming a manufacturing hub and to accommodate millions of new entrants in the workforce every year.”
