New Delhi: Ahead of Japanese Prime Minister Shinzo Abe’s visit to India, industry body Ficci has outlined an economic engagement model to catapult bilateral trade to $14 billion in 2012 from $7 billion in 2006-07.
In a paper on ‘India-Japan Economic Relations: Current Status and Prospects´, Ficci said India should engage with Japan in an export-oriented strategy that channelises large volumes of foreign direct investment (FDI) in the country for production and re-export to the Japanese market.
“Such a model would create large-scale employment in India, as production facilities would employ local workforce and resources and re-export the finished products to Japan,” the chamber said in a statement.
Abe will arrive on 21 August on this first visit to the country after becoming the premier. The visit follows Prime Minister Manmohan Singh’s tour to Japan in December last year.
Ficci said the two countries should encourage people-to- people contact, undertake exchange programmes for policy makers as well as for students. They also need to focus on building capacity among small and medium enterprises, it said.
“Indian SMEs can benefit immensely from Japan’s technical and management capabilities. A training cell can also be set up to facilitate cooperation between SMEs,” it said.
India and Japan are working on a Comprehensive Economic Partnership Agreement (CEPA) and hope to conclude it by end of next year. Currently, Japan is India’s largest development partner with the country receiving the maximum amount of Official Development Assistance (ODA) from it.
FICCI said areas like textiles, steel, auto components, chemicals, pharmaceuticals, oil, petroleum products, marine products and agricultural products held good potential for promoting bilateral trade and investment.
In the services sector, cooperation in areas like IT, biotechnology, medical, health, engineering design, banking and finance can further enhance trade volumes, it said.
Total FDI inflows into India from Japan during 1991 and 2007 amounted to 2.2 billion dollars. Though Japan is the fifth largest investor in India, it still accounts for a mere 4.85 per cent of the total FDI received by the country during the period.