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03. INVESTMENT UPDATE

India - Japan Joint Summit held at Tokyo


The Prime Minister,
Dr. Manmohan Singh with his Japanese counterpart, Mr. Taro Aso, during the Indo-Japan Summit, in Tokyo, Japan on October 22, 2008.

The Prime Ministers of India and Japan met in Tokyo on 22 October, 2008 for the India-Japan Annual Summit. They shared the view that India and Japan, as major countries in Asia that share common values and interests, must advance bilateral cooperation as well as cooperation in regional and multilateral areas with the objective of promoting peace, stability and prosperity in Asia and the world. They reaffirmed the importance of the Strategic and Global Partnership established in 2006 for this purpose and for harnessing the full potential of India-Japan relations.

The two Prime Ministers reviewed the implementation of the Roadmap for New Dimensions to the Strategic and Global Partnership and expressed satisfaction with the sustained progress that has been made through joint efforts between the two sides. They also recognized that there is still immense untapped potential for the further expansion of bilateral relations. The two Prime Ministers pledged to continue their efforts to broaden and deepen the relationship on the basis of the shared congruence of interests in order to develop it as an essential pillar for the future architecture of the region.

The two Prime Ministers welcomed the study on the future course of cooperation in the security field between the two countries and issued the Joint Declaration on Security Cooperation between India and Japan drawing on this study. They recognized that further cooperation on the basis of the Joint Declaration on Security Cooperation will be beneficial to peace and prosperity in Asia and the World. They instructed their respective Ministries to develop an Action Plan with specific measures to advance security cooperation based on this Declaration at an early date.

The two Prime Ministers expressed their satisfaction at the deepening of the Annual Strategic Dialogue between the Foreign Ministers as well as the other policy dialogues at respective levels. They also welcomed the steady upgradation of defence exchanges and cooperation and decided to encourage their Defence Ministries to enhance their dialogue and collaboration further based on the Joint Statement of May, 2006. They also welcomed the contribution of established bilateral dialogue mechanisms and urged them to continue their valuable work.

The two Prime Ministers expressed satisfaction at the growth of bilateral trade which is expected to reach $20 billion by 2010. They welcomed the substantive progress achieved on the Economic Partnership Agreement / Comprehensive Economic Partnership Agreement and expressed the hope that the negotiations would be concluded at the earliest possible time. The two Prime Ministers expressed their belief that this EPA / CEPA would be mutually beneficial and would fully harness the true potential of economic partnership.


The Prime Minister, Dr. Manmohan Singh and the Prime Minister of Japan, Mr. Taro Aso signing of the MoU for further strengthen the cooperation between the scientists and other concerned people in two countries, after the Indo-Japan

The two Prime Ministers expressed happiness over the long lasting investment relationship between the two countries which has grown over a period of time, especially the large presence of Japanese multi-nationals in India. This interest has been robust in recent years with Japanese direct investments rising substantially. The pipeline of investments already planned was also noted to be impressive. In this regard, the two leaders welcomed the efforts of JETRO and other organizations to support investment by the Japanese small and medium enterprises to India. Further the Prime Ministers expressed the hope that the upward trend would be sustained in the coming years.

The two Prime Ministers shared the view that the Japanese Official Development Assistance (ODA) has contributed to India's economic development and has generated goodwill among the Indian people for Japan. They shared the view that the Japanese ODA should continue to play an increasing role in India's poverty reduction, economic and social infrastructure development, tackling environmental issues and human resource development. The Prime Minister of India expressed his appreciation to the Japanese people for their generous role in India's development.

The two Prime Ministers were satisfied that the Special Economic Partnership Initiative launched in December 2006 is beginning to give a strong stimulus to bilateral economic and commercial ties and create new opportunities for business.

The two Prime Ministers reaffirmed their commitment to the realization of the Western Corridor of the Dedicated Freight Corridor (DFC) project, as the flagship project of India-Japan cooperation, with Japanese ODA Loan utilizing Japan's Special Terms of Economic Partnership (STEP) Scheme and confirmed their readiness to jointly initiate the first phase (Rewari-Vadodara sector) of the project. In this regard, the Japanese side welcomed India's decision to commission the Western Corridor of DFC with electric traction system. The assistance will commence through an ODA loan for Engineering Services and the total volume of the loan for the first phase is currently estimated to be approximately 450 billion Yen, based on the provisional project design. The two Prime Ministers also expressed their commitment to work together for early finalization of the assistance for the entire Western Corridor.


The Secretary General, Democratic Party of Japan, Mr. Yukio Hatoyama alongwith a delegation called on the Prime Minister, Dr. Manmohan Singh

The two Prime Ministers expressed the view that the Delhi-Mumbai Industrial Corridor Project (DMIC), which is linked to the Western Corridor of DFC Project, has the potential to transform the dynamics of the India-Japan economic engagement, and decided to pursue this further. They welcomed the Memorandum of Understanding signed between Japan Bank for International Cooperation (JBIC) and India Infrastructure Finance Company Ltd. (IIFCL)/ Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) and confirmed that they would continue to work together closely for the joint establishment of a Project Development Fund. Both sides also welcomed the active participation by the Japanese companies in the 5 Early Bird Projects in the DMIC region in the areas of logistics, human resource development, power generation and enclave development. Both sides also welcomed the initiative of the DMICDC to take up select projects for early implementation in the Project States alongside the master planning exercise. They expressed their desire to further discuss overall cooperation on DMIC in order to spur mutually beneficial business relations that serve the long term interests of both countries.

The two Prime Ministers welcomed the progress made in bilateral consultations on high technology trade and noted the great potential in this area for collaboration. The two Prime Ministers recognized the importance of continuing bilateral consultations to facilitate two way high technology trade while addressing matters relating to respective export control systems.

The two leaders recalled the Joint Statement on Enhancement of Cooperation on Environmental Protection and Energy Security signed in August 2007 and stressed the need for accelerating bilateral cooperation in these vital areas. They welcomed progress achieved under the India-Japan Ministerial-level Energy Dialogue which confirmed the strengthening of cooperation in energy efficiency and conservation sector particularly through cooperation in establishing Regional Energy Efficiency Centres in India, and the development of a comprehensive cooperation in the coal and power sectors. They also noted that under this Dialogue the Energy Ministers confirmed that they will exchange views and information on their respective nuclear energy policies. They also welcomed progress achieved under the India-Japan Energy Forum held by the New Energy and Industrial Technology Development Organization (NEDO) of Japan and The Energy and Resources Institute (TERI) of India, and recognized the importance of promoting cooperation between the two countries' industries in order to expand bilateral energy cooperation on a commercial basis.


The Chairman & Managing Director of Reliance Industries Ltd., Shri Mukesh Ambani and the Chairman, Nippon, Canon Inc, Mr. Fujio Mitarai presented the 2nd India-Japan Business Leaders Forum Joint Report to the Prime Minister, Dr. Manmohan Singh and the Prime Minister of Japan, Mr. Taro Aso, in Tokyo

The two Prime Ministers expressed satisfaction on the achievement at the Second Meeting of the India-Japan Joint Working Group on Urban Development in June 2008 and reaffirmed their intention to continue to hold the Working Group meetings regularly.

The two Prime Ministers shared the view that they will enhance cooperation in the field of Information and Communication Technology including the research collaboration and the introduction of wide-band wireless technology. The two Prime Ministers welcomed the report submitted to them following the second meeting of the high-level Business Leaders' Forum (BLF). They recognized the crucial role played by business and industry of both countries in intensifying trade, investment and economic relations. They urged their concerned officials to speedily examine and implement the BLF's recommendations.

The two Prime Ministers emphasize the importance of exchanges at the cultural, academic, youth and people-to-people levels. They noted with satisfaction the enhanced people-to-people exchange between the two countries under the Aso Programme, including through the Japan-East Asia Network of Exchange for Students and Youth (JENESYS) Programme, and shared their renewed commitment to maintain the upward trend.

The two Prime Ministers positively appraised the work of the India-Japan Working Group set up to explore possible collaboration in establishing a new Indian Institute of Technology (IIT) with Japanese assistance and welcomed the report submitted to them by the Working Group. The two Prime Ministers confirmed their commitment to collaborate in the establishment of a new IIT in Hyderabad that will become a symbol of joint efforts in promoting educational excellence in India, through various contributions from Japan.

Continued from page 1
India’s Civil Nuclear Energy Initiative

It has also been ensured in these agreements that we have the right to reprocess the nuclear material that we obtain from our international partners. We will also be setting up a new national reprocessing facility and taking other steps necessary to operationalise these agreements and realize the full potential of the civil nuclear initiative.

All these agreements are fully consistent with India’s national interest, with the assurances that PM had given to Parliament and that Government has made to the people of India. Taken together the India-specific Safeguards Agreement, the NSG decision and the bilateral cooperation agreements provide the basis for us to engage in international cooperation in civil nuclear energy on a long term and sustainable basis with interested international partners. We regard these decisions as a vindication and recognition of India’s impeccable non-proliferation credentials. When the enabling bilateral cooperation agreements are brought into force they will provide the legal framework to negotiate and finalise commercial arrangements to source nuclear fuel for our strategic fuel reserve as well as other nuclear equipment and technologies covering the nuclear fuel cycle. We will honour our commitments and implement these agreements in good faith and in accordance with the principles of international law and have no doubt that our partners will similarly discharge their commitments and obligations.

In achieving this result the Government has ensured that they only relate to cooperation in civilian nuclear energy and that our strategic programme and our indigenous research are not affected. Our three stage indigenous nuclear programme will continue as envisaged by Pt. Jawaharlal Nehru and Dr. Homi Bhabha. The bilateral cooperation agreements that we have signed with the US and France as well as the India-specific Safeguards Agreement include specific provisions which ensure that there will be no hindrance to our strategic programme and that we retain the freedom to take action with regard to our strategic programme even as we engage in international cooperation in civil nuclear energy.

Why Government considers this initiative a historic contribution to our nation building effort, in respect of energy, sustainable development, technology and other aspects.

First, it enhances our development options. We are all aware that the availability of clean, affordable and sustainable sources of energy is a critical requirement if we hope to maintain healthy economic growth and abolish poverty. Today, the shortage of energy hampers our efforts to rapidly develop our economy. Hon’ble members are well aware of the strain put on our economy and on the daily lives of the people by the rise in the global prices of crude oil earlier this year. We must develop and utilize energy sources which are clean and do not contribute to climate change or global warming. We are and will continue to develop renewable sources of energy such as bio-fuels, solar and wind energy as well as other sources like hydel power. Nuclear energy offers us an economically and environmentally viable alternative.

With the international cooperation that is now available, we will be in a position to bring additional generating capacity through nuclear power into our energy mix. It will also help our indigenous nuclear programme to grow rapidly. Today we have about 4000 MW of installed capacity in nuclear power. Even the existing plants are operating at a much lower level than their capacity due to a shortage of uranium. With the opening up of international nuclear trade and commerce we will have new opportunities to expand our nuclear power capacity.

Today, our total power generation capacity is about 1,45,000 megawatts. If we wish to sustain an annual GDP growth rate of 9-10%, then by 2030, our projected energy deficit would be 1,50,000 megawatts. If we go a little more in future, that is by 2050, our energy deficit would be 4,12,000 megawatts. In working out these figures, we have taken into account thermal power, coal, petrol and diesel, hydel power, and non-conventional energy sources like wind, solar, etc. Even after their fullest exploitation, the projected deficit would remain. Nuclear power is the only effective way to bridge this gap. As per some studies, if we start work today on nuclear power, to produce 40,000 megawatts of energy in the period of eight years from 2012 to 2020, then within 22 years, that is by 2030, we will be able to reduce the deficit to only 50,000 megawatts as against the deficit of 1,50,000 megawatts. Thereafter, we will be able to reduce the energy deficit in 2050 from 4,12,000 megawatts to only 7,000 megawatts.

Second, this initiative marks the end of the technology-denial regimes which have restricted India for over three decades. These developments are the beginning of a new chapter for India - of engagement as equal partners in civil nuclear energy cooperation with other countries. As we move forward it will help us to expand high technology trade with technologically advanced countries.

Third, it is an acknowledgement of the scientific and technological achievements of our scientists whose tireless efforts in the face of adverse conditions laid the basis for this initiative. It is their efforts that have made it possible for the world today to recognize India as a state with advanced nuclear technology. Hon’ble members are aware that the embargoes in the nuclear field that were in place against us had hampered the efforts of our scientists to fully participate in international exchanges. With this initiative they will be able to engage with their counterparts in exchange of scientific ideas and technical know-how and contribute to the global effort to deal with the world-wide challenges of energy security and climate change; and Finally, the initiative is an acknowledgement of India’s role as a responsible power in international affairs on global stage. It is for us to utilize this opportunity with confidence as we pursue our national interests.


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