Supply chain resilience initiative in the works: Japan to invest $42 bn to boost economic ties
Prime Minister Narendra Modi said on Saturday Japan aims to invest $42 billion (5 trillion yen) over the next five years in India, after a meeting with his Japanese counterpart Fumio Kishida in the national capital to bolster bilateral cooperation.
Both the leaders held meetings as part of the 14th India-Japan Annual Summit. This is Kishida’s first visit to India as Japan’s Prime Minister. Boosting bilateral ties, Modi said at a joint press conference, will not only benefit the two countries but will also help initiatives for peace, prosperity and stability in the Indo-Pacific region. Former Japanese Prime Minister Shinzo Abe had in 2014 announced Moscow’s investment and financing of 3.5 trillion yen in New Delhi in five years.
Both the sides signed six pacts in areas of cybersecurity, capacity building, information sharing and cooperation, and agreed to forge a clean energy partnership as well. Kishida and Modi are also expected to agree to convene a two-plus-two meeting between their foreign and defence ministers at the earliest, an official said.
Sources said the two sides are working on a Supply Chain Resilience Initiative (SCRI) -– the trade and economy ministers of India, Japan and Australia launched the SCRI on April 27, 2021. The initiative seeks to enhance the resilience of supply chains in the Indo-Pacific region and to develop dependable sources of supply and to attract investment. As initial projects, sharing of best practices on supply chain resilience; and holding of a matching event have been completed.
Japan has been the fifth-largest investor in India, with foreign direct investments of $36.4 billion between April 2000 and December 2021. It accounted for 6% of the cumulative FDI inflows into India during this period. However, India has been running a huge trade deficit with Japan. Until January this fiscal, while India shipped out products worth only $5.2 billion, Japan’s exports to India hit as much as $12 billion.
“There has been progress in the economic partnership between India and Japan. Japan is one of the largest investors in India. The countries are working as ‘one-team, one-project’ on Mumbai-Ahmedabad high-speed rail corridor,” Modi said.
Both the leaders, earlier in the day, discussed ways to boost economic and cultural linkages between the two countries at Hyderabad House, according to the Prime Minister’s Office (PMO). This year also marks the 70th anniversary of the diplomatic relations between India and Japan.