Japan ready for currency swap with India

New Delhi, Aug 22 (UNI) Japan today said it has drawn up a basic structure for currency swap agreement with India which will cater to short-term liquidity and complement foreign exchange norms.

''To strengthen economic ties between the two nations, the basic framework of the currency swap agreement has been drawn up,'' Japan Prime Minister Shinzo Abe said here at a joint business meeting organised by CII, FICCI and Assocham.

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.

The PM also said Japan is attaching great importance to the Delhi-Mumbai freight corridor and will contribute to strengthening of the Indian infrastructure so that it also benefits the Japanese companies operating out of India.

Mr Sakaba said the Japan International Co-operation Agency (JICA) had been conducting feasibility study for the corridor and that the Japanese government was eagerly waiting for the final report by JICA on the project.

''We foresee a possibilty of soft loans through yen loans for funding this project. India has also proposed for a Project Development Fund whereby the feasibilty study of any project to be undertaken is enhanced and expedited,'' Mr Sakaba said.

The Japanese prime minister had also said that bilateral relations between the two countries have increased leaps and bounds, adding that the number of Japanese companies operating out of India has increased by 50 per cent to 480 over the last year. Mr Abe said now his country envisages a trade of 20 billion dollars in the next three years with India.

Earlier, Industry and Commerce Minister Kamal Nath said that Japan External Trade Organisation has already signed an MoU on strengthening business engagement between industry leaders of both side. In particular, he said the MoU centers around bringing together the SME sectors of both countries.

Mr Nath also informed that Japanese financial institutions has invested in India close to 8.2 billion dollars in March 2007 through Indian Portfolio Funds.

Meanwhile, CII President Sunil Mittal has called for a strong leverage of the bilateral trade relations between the two countries, saying that an open sky policy was required for the purpose.

He said the two countries can cooperate for not only for supply of nuclear energy but also for the coal energy. ''We need production of clean coal energy and for that we should encourage startups from Japan to untilise India's coal reserves,'' Mr Mittal said.

Mr Mittal also added that the countries need to actively participate in education and cultural programmes of each other.

UNI