Wednesday, December 28, 2011

Japan announces $4.5 bn loan to India for infrastructure corridor


Ramping up strategic ties with India, Japan Wednesday announced $4.5 billion for the landmark Delhi-Mumbai Industrial Corridor (DMIC) project and agreed to accelerate negotiations for a civil nuclear deal, but made it clear that New Delhi has to square up with non-proliferation norms.

Prime Minister Manmohan Singh and visiting Japanese Premier Yoshihiko Noda held talks for over one-and-half hours that focused on accelerating ties across the spectrum, including political, economic and global.

In key steps that are expected to push the burgeoning bilateral relations into a new trajectory, India and Japan, two of Asia's largest economies, decided to enhance the quantum of currency swap arrangement from $3 billion to $15 billion and set a target of $25 billion bilateral trade by 2014.

In important decisions that will impact the lives of ordinary Indians, the two countries also agreed to launch a ministerial-level economic dialogue, spur talks for a social security accord, collaborate in high-technology trade and rare earths, and to step up collaboration in developing high-speed rail networks in India.

The two sides decided to pursue talks on a new industrial corridor between Chennai and Bangalore, India's emerging economic hub where Japanese companies have made large investments.

Besides $4.5 billion for the DMIC, a 24-city plan which promises to transform the economic landscape of India, Japan also pledged 134.288 billion yen loans for two new projects, including the Delhi Mass Rapid Transport System Project Phase III and the West Bengal Forest and Biodoversity Conservation Project.

Resolving to expand cooperation in anti-piracy, counter-terrorism and maritime security, the two leaders also decided to "redouble efforts" to accelerate the reforms of the UN Security Council.

They also discussed a cluster of global issues, including the global economic slowdown, climate change, non-proliferation and the situation in Afghanistan and North Korea.

Stressing that the two countries have "a complete meeting of minds on most issues of concern to us", Manmohan Singh pitching for more investment from Japan thanked Tokyo for continuing with its official development assistance to India despite the tsunami and earthquake that hit Japan early this year.

The talks between the two leaders at the annual summit imparted the much-needed momentum to civil nuclear negotiations that stalled after the March 11 Fukushima disaster.

"The cooperation with India regarding peaceful uses of nuclear energy is conducive to our efforts to address climate change and to strengthen the global partnership with India," Noda said at a joint press conference with Manmohan Singh after the talks.

Noda, however, did not spell out when the negotiations will be resumed and reminded India about its voluntary commitment on a moratorium on nuclear testing. The fourth round of nuclear negotiations is likely to be held early next year, said reliable sources.

"We shall proceed with negotiations while giving due consideration to security, non-proliferation and disarmament," said Noda, who is on his maiden visit to India.

The Japanese prime minister stressed the importance of bringing into force the Comprehensive Test Ban Treaty (CTBT) at an early date, a joint statement issued after the talks said.

Manmohan Singh reiterated India's commitment to a unilateral and voluntary moratorium on testing. The two leaders also decided to step up global cooperation for concluding a Fissile Material Cut-off Treaty (FMCT).

"As part of our energy cooperation, we reviewed the ongoing discussions on furthering civil nuclear cooperation between our countries. These are moving in the right direction," Manmohan Singh said.

"The two prime ministers welcomed the progress made to date in negotiations between India and Japan on an agreement for cooperation in the peaceful uses of nuclear energy, and directed their negotiators to exert further efforts towards a conclusion of the agreement, having due regard to each side's relevant interests, including nuclear safety," the joint statement said.

Noda welcomed progress in nuclear negotiations and hoped that "mutually acceptable results will be achieved".

"Disarmament and non-proliferation is the tenet of the country. This is a matter of national sentiment," Noda said.

Noda also promised to share the experiences and lessons learnt from the Fukushima nuclear power plant accident to improve nuclear security around the world.

The nuclear deal with Japan will enable India to implement its atomic deal with the US as top American atomic equipment companies are partially owned by Japanese companies.

With an eye on increasingly assertive China, the two countries sought closer cooperation in building "an open, inclusive and transparent architecture of regional cooperation in the Asia-Pacific region."