India Japan Trade Relations is as old as post world war II era. The trade relations between India and Japan flourished after the establishment of diplomatic ties, especially after the World War II. Japan resurrected form the debacle of the World War II loss with the help of India’s iron ore export. Japan reciprocated India by providing yen loans to India in 1958, first of its type, by Japanese government. And as a matter of fact since then, Japan is India’s largest aid donor.
The present robust economic growth of India got caught on Japanese investment radar. As a result of good India Japan Trade Relations,India is the largest recipient of Japanese official development assistance (ODA).As of 2013, bilateral trade between India & Japan stood at US$16.31 billion & is expected to reach US$50 billion by 2019-20. Although, Japans contribution to India’s FDI inflow is around 7% but the quantum is rising steadily, especially in the Indian Financial Market.India Japan Trade Relations ranks fifth amongst all trading partners that India have. The positive part of the India Japan Trade Relations have facilitated growth in presence of Japanese companies in India. To complement such growth a good number of Indian companies have also opened their shops in Japan and the numbers are rising steadily.Japanese companies, such as Sony, Toyota, and Honda, have manufacturing facilities in India, and with the growth of the Indian economy, India is a big market for Japanese firms.
A few notable agreements and convention signed between India and Japan to further cement the cordial relations between the two countries are –
Culture and heritage,
Avoidance of Double Taxation,
Cooperation in the field of Science and Technology,
Students exchange programme.
Recent developments in relation
India and Japan inked a number of pacts in key areas of transportation, defence and nuclear energy. India’s first bullet train network will come up between Mumbai and Ahmedabad at a cost of Rs 98,000 crore.
The strategic pacts were inked after the summit between Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe during which they also discussed international and regional issues of mutual importance including UN security reforms.
High-speed rail network, will be built on the Shikansen model known for its reliability and safety.Japan will provide extraordinary package of approximately $12 billion and technical assistance, on very easy terms for the project.
Bullet train between the two cities will cut travel time on the 505 kilometre route from eight hours to around three. The approx. cost of the project is estimated to be around Rs 98,000 crore. In the hope of attracting investments as well as greater number of tourists from Japan, PM Modi announced that ‘visa on arrival’ will be extended to all Japanese citizens from March 1, 2016. The two sides also inked agreements – one concerning the Transfer of Defence Equipment and Technology and another related to Security Measures for Protection of Classified Military Information. Terming defence pacts as “decisive steps in our security cooperation”,will deepen the defence relations and promote defence manufacturing in India. “This builds on our decision to expand staff talks to all three wings of the Armed Forces and make Japan a partner in Malabar Naval Exercises”.
A joint statement on ‘India and Japan Vision 2025: Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World’was also issued.