New economic model will catapult India-Japan trade: FICCI

New Delhi, Aug 19 (UNI) A new economic engagement model will catapult bilateral trade between India and Japan from an anticipated seven billion dollars in fiscal 2007 to 14 billion dollars in 2012, industry chamber FICCI said.

As the Japanese Prime Minister Shinzo Abe embarks on his official visit to India beginning August 21, his first since he became premier, the air is thick with expectation of a paradigm shift in India-Japan trade and investment ties.

A FICCI paper on 'India-Japan Economic Relations: Current Status and Prospects', prepared on the eve of the visit of the Japanese PM and the high-power official and business delegation from Japan, suggests that India should engage Japan in export-oriented FDI strategy that channelises large volumes of FDI into India for production and re-export to the Japanese market.

Such a model would create large-scale employment in India, as production facilities would employ the local workforce and resources and re-export the finished products to Japan.

This model has stood the test of time in Japan's engagement with its Far-Eastern neighbours such as Singapore, Korea, Thailand and most notably, China, said FICCI in the paper.

On its part, Japan is proposing a democratic alliance in Asia anchored by India, Australia and Japan, to put the process of economic growth of the region on a higher trajectory.

Once the alliance moves forward, the chamber suggests embarking upon a vigorous people-to-people contact between India and Japan.

FICCI also suggests that the governments must strengthen the institutional framework in the two countries to promote student exchanges. Currently, several Indian students go to the western countries for education. Japan could prove to be a viable alternative for the Indian students who want to pursue higher studies in specialised fields.

Similarly, Japanese students should look at India as an attractive destination for higher education.

Another important element relates to capacity building amongst the small and medium enterprises (SMEs) of India. FICCI strongly feels that Indian SMEs can benefit immensely from Japan's advanced technical and management capabilities.

In this context, it proposes to set up a training cell that can act as an aggregator for Indian SMEs wishing to avail themselves to the niche Japanese technical and management expertise for performance enhancement.

Further, the chamber proposes that India and Japan should enter into a 'civilisational dialogue' and rejuvenate the once strong ties the two countries enjoyed based on our historical contacts and religious affinities.

That India-Japan trade and investment is in for a quantum jump can be gauged by the serious efforts by the two governments by way of setting up a Joint Task Force (JTF) during Prime Minister Manmohan Singh's visit to Japan in December 2006.

The (JTF) is undertaking inter-governmental negotiations on the proposed Comprehensive Economic Partnership Agreement (CEPA) that is mandated to be concluded by 2008-end.

On the second track, the two Prime Ministers have announced an 'India-Japan Special Economic Partnership Initiative' (SEPI) to widen and deepen bilateral economic engagement. SEPI seeks to promote enhancement of investment from Japan to India and help develop India's infrastructure and manufacturing capacity, taking full advantage of the ample availability of skill and human resources and the PPP initiative of the Indian government.

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