New Delhi: Japanese Prime Minister Yoshihiko Noda called for greater economic relations between two of Asia’s largest economies on Tuesday, after India’s trade minister said bilateral commerce was on track to reach a relatively low $25 billion by 2014.
India and Japan enjoy warm diplomatic ties, but at a paltry $15 billion, bilateral trade in 2010 was less than 5 percent of Japan’s commerce with China.
“I believe that India’s middle class will be the driving force if the manufacturing sector grows in India...we can achieve greater trade volumes,” Noda said at a meeting with business leaders in Delhi.
“We can and should step up economic relations between the two countries,” he said.
Japan Prime Minister Yoshihiko Noda inspects a guard of honour during his ceremonial reception at the presidential palace in New Delhi. Japan and India are in the final stages of deciding on a dollar swap agreement and expect to reach agreement during Noda’s visit to India.
Noda was on a one-day trip to India to boost financial cooperation between Asia’s second and third largest economies, which are also working more closely on security issues along with the United States.
Japan and India are in the final stages of deciding on a dollar swap agreement which may be announced during Noda’s visit and would help defend the rupee, Asia’s worst performing currency in 2011.
Japanese corporations see India as a major opportunity as Japan’s population ages and the fast growth seen by main regional partner China in recent decades slows, said Rajiv Biswas, IHS Global Insight’s chief Asia economist.
Indian commerce minister Anand Sharma also said minimum investment in a industrial corridor being built by India with help from Japan between Delhi and Mumbai would be more than $100 billion.