28 December 2011

Introduction

• The Japanese and Indian business leaders welcome the fact that the India- Japan Comprehensive Economic Partnership Agreement (CEPA) came into force in August this year following the efforts of the two governments to respond to proposals made by business leaders.
• The Japanese side conveyed its appreciation for the assistance India provided following the Great East Japan Earthquake in March this year, including the first-ever overseas dispatch of a National Disaster Management Authority (NDMA) Response Force, provision of emergency supplies and the adoption of statements of solidarity by both Houses of Parliament. It also proposed sharing its experiences in restoring supply chains, rebuilding key infrastructure and responding to disasters.
• Business leaders of both countries share the perception that Asia serves as an engine for the world economy to overcome the challenging economic circumstances that we face today after the global financial crisis. The leaders agreed that the two countries, who share the same values of democracy, human rights, and compliance with international law, can contribute to stable and sustainable economic growth in this region as well as the global economy, by broadening and deepening the bilateral economic partnership.
• The Japanese private sector is showing growing interest in India and an increasing number of Japanese firms are expanding their operations into India, especially in the automotive and machine industries. As of October 2011, Japanese companies have 1,422 branches in India, an increase of 186 over the same month of the previous year.
• Following the 3rd meeting of the India Japan Business Leaders Forum in October 2010, Japanese and Indian business leaders once again exchanged views towards strengthening and deepening the economic engagement in trade and investment between Japan and India and the leaders submit the following Joint Report to the Heads of both Governments.

1. Promoting Utilization of the India- Japan CEPA for Improving the Business Environment

• CEPA, as an institutional infrastructure, is essential to further accelerate and consolidate business activities between Japan and India. The Japanese side outlined the rise in exports from Japan utilizing CEPA since the agreement came into force in August this year and requested for further efforts to facilitate smooth operation of CEPA by ensuring that Indian customs authorities are fully aware of its provisions.
• Active use should be made of the Sub-Committee on Improvement of Business Environment set up under the CEPA framework to facilitate the promotion of Japanese investments including the investments by Japanese SMEs into India. To strengthen competitiveness of the Indian industry, efforts should be made to consider issues like smooth land acquisition at reasonable cost for manufacturing, urbanisation and industrial growth; relaxation and deregulation of FDI restrictions in priority sectors; reforms in Tax system; early conclusion of Social Security Agreement; simplification and speeding up of Visa issuing procedures for business professionals and custom procedures.
• The Indian Services sector has a strong interest in the Japanese market, especially in fields such as IT, IT Enabled Services (ITES) and professional services. Indian pharmaceutical companies with strong global reputations and solid business results have also shown interest in accessing the Japanese market. The Indian side expressed hope that the Japanese government shall accord equal treatment to the applications of Indian companies as it accords to the applications of its own nationals to improve access to the Japanese market.
• Business leaders from both countries welcome expanding personnel exchange between the two countries. With this view in mind, we share the perception that the movement of people will be further accelerated by overcoming challenges such as simplifying and speeding up procedures for acquiring commercial and working visas.

2. Importance of Infrastructure Development in India and Promotion of India- Japan Cooperation

• Business communities on both sides share the view that development of industrial parks and logistics infrastructure including power supply, roads, railways, ports, and warehouses is an urgent issue in promoting industrialization in India, and appreciate the direction for infrastructure development set out in the Indian Government's 12th 5-year plan.
• Both sides also share the perception that swift and steady progress should be encouraged on the Dedicated Freight Corridor (DFC) between Delhi and Mumbai. We agree that fora such as ministerial-level Public-Private Policy dialogue, the DMIC-PPP Promotion Council, and sector-specific discussions should be utilized to promote ongoing steady progress of problem-solving efforts relating to the Delhi Mumbai Industrial Corridor (DMIC) project and projects proposed under the South India core nodal development concept, from the perspective of harnessing Japanese companies' technology, Japanese long-term funds and expertise in all aspects of infrastructure development.
• The Indian side informed that the DMIC concept will benefit immensely from the over-arching framework provided by the National Manufacturing Policy of the Government of India. The business leaders of both sides welcomed the progress made by the DMIC project and creation of the "Revolving Fund" for the project.
• Since private finance needs to be increasingly deployed in the Indian infrastructure development projects, an environment conducive to private-sector involvement needs to be created to enable Public-Private Partnerships (PPPs) to function effectively. Business communities on both sides agreed to request the governments of Japan and India to formulate frameworks to support infrastructure development through PPPs. Both sides recommend enhanced dialogue among themselves and with the two governments relating to relaxation of capital regulations, financial support and improving conditions for PPP participation.

3. Strengthening Cooperation in Strategic Areas

• Technology development and technology transfer are essential to make bilateral economic ties stronger. For example, the Indian and Japanese business leaders hope for steady progress in the India-Japan Energy Dialogue and welcome the Japanese proposal to promote new technology-based projects such as "Smart Communities" and "Eco Cities."
• In addition to manufacturing fields including automobiles, machinery and chemical industry, emphasis also needs to be given to electronic hardware manufacturing, telecommunication equipment, heavy industries, rail transit systems, cutting edge technologies in manufacturing and technological exchanges in sectors of agriculture and environmental management.
• As part of the improvements to infrastructure in the power sector in India, Japan-India cooperation in construction of nuclear power plants is strategically important. To facilitate this process, we request that our two governments work towards greater cooperation in this regard, including signing a nuclear power agreement.
• Given the global competition for scarce resources, new joint India- Japan initiatives are expected to develop strategically important resources such as rare earths in India.
• Development of high calibre human resources as a form of "soft infrastructure" will be essential for promoting joint projects in such strategic fields. The business communities of India and Japan agree on the importance of enhancing efforts to promote skill upgradation and skill development in both the public and private sectors through initiatives like skill training and certification, bilateral student exchanges and corporate internships.

4. India-Japan Cooperation in the Asia-Pacific Region

• Business Leaders of India and Japan share the perception that further efforts should be made to liberalize trade and investment in the Asia-Pacific region and more joint efforts by Japan and India would add impetus towards this end.
• The two countries also realize the importance of India-Japan Strategic and Global Partnership and its beneficial influence over economic development in the Asia-Pacific region.
• Indian and Japanese business leaders agree to take a joint initiative towards building the Comprehensive Economic Partnership in East Asia (CEPEA) (i.e., ASEAN+6) that embraces the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) and the ASEAN-India FTA. It will contribute to the expansion of production networks and strengthening of supply chains in the region.

5. 60^th Anniversary of Diplomatic Relations between India and Japan

• The business leaders agreed to organise activities like business seminars in India and Japan in 2012 to further energise business activities as well as public- and private-sector exchanges to commemorate the 60th anniversary of the establishment of diplomatic relations between the two countries.

Conclusion

• India and Japan have historically shared a cordial and friendly relationship and next year will celebrate the 60th anniversary of establishment of our diplomatic relations. In addition, both countries have great potential to develop strategic economic partnerships based on a mutually complementary relationship and also the geopolitical significance of this partnership. Partnership between India and Japan can also be effective in addressing the issue of piracy in the Indian Ocean and important for securing sea lanes.
• The India- Japan CEPA provides a platform for further establishing and developing the above partnership, and public and private enterprises in India and Japan need to make further concerted efforts to nurture this seed into a robust economic alliance from which businesses in both countries can benefit.
• Business Leaders of India and Japan wish to contribute to the stability and prosperity of the Asia-Pacific region through joint efforts by these two major democracies in Asia.
• Finally, members of this Joint Interaction meeting would like to record their appreciation for the trust reposed in them by His Excellency Dr. Manmohan Singh, Prime Minister of India and His Excellency Mr. Yoshihiko Noda, Prime Minister of Japan.