India for currency swap with Japan, eyes \ billion investment

New Delhi, Aug 22 (UNI) The government today said it has set a target of five billion dollars as investment from Japan in the next five years while a framework has been drawn up for a currency swap agreement with India to cater to short-term liquidity and streamline foreign exchange norms.

''Our need for infrastructure is massive, and we estimate that in the next five years, we will need 384 billion dollars to bridge the infrastructure gap,'' Commerce and Industry Minister Kamal Nath said here at the first India-Japan Business Forum here today.

On the currency swap agreement Japanese Prime Minister Shinzo Abe said, ''To strengthen economic ties between the two nations, the basic framework of the currency swap agreement has been drawn up''.

A senior Japanese official Mitsuo Sakaba said after the 1998 Asian currency collapse, several countries have been actively looking at currency swaps.

''We, presently, have credit swap agreement with seven countries and India will be the eight,'' Mr Sakaba said. He also mentioned that talks on the agreement has started in July last year when the Japanese Foreign Secretary had visited India.

Mr Nath had earlier said the Indo-Japanese Economic Partnership Agreement (EPA) had been put on ''fast track'' and would be finalised by the year-end.

''The negotiations were earlier slated to be concluded in June, 2008. However, we are keen to see it finalised and we are goin to hold two rounds of negotiations with two meetings each, so that negotiations end by December this year,'' Mr Nath said.

Talking to mediapersons, the minister said the EPA was announced in December 2006 after three rounds of talks in Tokyo.

Trade between India and Japan grew by 30 per cent in 2006 and the FDI inflow the same year stood at 520 billion dollars.

The commerce minister highlighted the lead given to Indo-Japan economic engagement through the Delhi-Mumbai Industrial Corridor Project and hoped that apart from benefiting the country's industrial infrastructure development. This would also become a new springboard for the Japanese companies for accessing the US and EU markets, he said.

Mr Nath invited Japanese business leaders to look at some of the sectors with high potential in manufacturing such as textiles and apparels, food processing, chemicals and petrochemicals, automobiles, electronics and IT hardware .

Mr Nath mentioned that the EPA will not only be an agreement for trading of goods, but will also demonstrate the goodwill between New Delhi and Tokyo.

Expressing optimism at the growing Indo-Japan economic relations, he said,''Both Prime Minister Manmohan Singh and his Japanese counterpart Shinzo Abe have stressed on the Indo-Japanese partnership.'' Japan need to synergise their growth to bring out the best of Indian and Japanese industries by way of innovative technology and India in return can make available its burgeoning human resources and for that reason the negotiation for EPA is advanced from June 2008 to this year, Mr Nath noted.

''The resurgence of manufacturing is visible in the sustained interest of overseas companies in establishing production centres in India. Factories for Suzuki, Mitsubishi, Toyota, Honda, Asahi and others are going online rapidly, making a range of products for domestic as well as international sales.'' MORE UNI