Home >politics >news >India may give 26% stake in DMICDC project to Japan govt

India has agreed to give the Japanese government a 26% stake?in the much-delayed Delhi-Mumbai Industrial Corridor Development Corp. (DMICDC) to accelerate the project.

After the second India-Japan ministerial business-government policy dialogue on Monday, India’s commerce and industry minister Anand Sharma said the ministry has moved a cabinet note for extending a 26% equity participation to the Japanese government and a decision will be taken soon.

Sharma and Japan’s minister of economy, trade and industry, Yukio Edano, jointly chaired the meeting.

Cementing tie-up: Commerce, industry and textiles minister Anand Sharma and Japan minister for economy, trade and industry Yukio Edano in New Delhi on Monday. PTI

Japan has already committed to investing $4.5 billion in DMICDC projects.

The Japan government’s intent to take an equity stake in DMICDC is a sign of the country’s commitment to the project, said former industry department secretary Ajay Dua. “The advantage is, Japan will bring in a high level of scrutiny to the project. This should be welcomed," he said.

DMICDC proposes to develop what it calls self-sustainable smart cities on either side of the 1,483 km-long western dedicated rail freight corridor between Dadri in Uttar Pradesh and Jawaharlal Nehru Port Trust in Navi Mumbai.

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Foreign ministers S.M. Krishna and Koichiro Gemba touch upon the issue of economic trade, maritime security and cyber security in a sixth strategic dialogue held on Monday in Delhi

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It was incorporated in January 2008 with an authorized equity base of 10 crore. The government held a 49% stake in the special purpose vehicle, Infrastructure Leasing and Financial Services Ltd (IL&FS) owned 41% and Infrastructure Development Finance Co. (IDFC) the balance 10%.

Sharma also said India has agreed to supply 2 million tonnes (mt) of iron ore annually to Japan by extending an earlier agreement.

In separate talks between Indian foreign minister S.M. Krishna and Japanese foreign minister Koichiro Gemba, the two countries agreed to open dialogues on cyber and maritime security besides intensifying cooperation in the infrastructure sector by drawing a masterplan for the proposed Chennai-Bangalore transport corridor and India looking at sourcing high-speed rail technology from Japan.

The two countries will hold their first joint naval exercises, off the coast of Japan, in June. Both sides decided to speed up talks to conclude an agreement on civil nuclear cooperation that has been kept on hold since the radiation leak at the Fukushima Daiichi nuclear power plant in the aftermath of the earthquake and tsunami in Japan last year.

Japan has been keen that India sign the nuclear non-proliferation treaty (NPT) and is uncomfortable that India keeps its nuclear testing options open. Both sides have finished three rounds of talks on the subject.

The two countries also agreed to accelerate cooperation in the development of rare earth elements critical for the manufacture of high-end and high-tech electronics—first mentioned in the India-Japan joint statement issued at the end of Japanese Prime Minister Yoshihiko Noda’s visit to India in December.

“Economically speaking, there are complementarities between Japan and India, there is room for development and further deepening (of) economic relations," said Gemba. “We are at the stage to open up the lid to further develop our bilateral economic relationship."

In the political and security arena, besides new talks on maritime and cyber security, India and Japan will “maintain close cooperation with regard to the use of outer space", he said, adding that both countries also discussed ways to working together to “promote comprehensive economic partnerships in East Asia".

“We also had a preliminary exchange of ideas of the Chennai-Bangalore transport corridor," Krishna said, recalling that the prime ministers of India and Japan in December had flagged this as a key project given that an “increasing number of Japanese companies, including small and medium enterprises, have made direct investments to establish their manufacturing base or other forms of business presence" in this area.

elizabeth.r@livemint.com

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