Thursday, Aug. 23, 2007
Abe: India on FTA fast track
Investment surge pushed; U.S. nuclear deal not raised
Compiled from Bloomberg, Kyodo
NEW DELHI - Prime Minister Shinzo Abe called Wednesday for the rapid completion of a free-trade agreement with India and pledged to help finance a $90 billion freight corridor to spur a doubling of investment in the South Asian nation.
Addressing India’s legislature, Abe said the two nations would set up a research fund for work on a project to connect New Delhi and Bombay, its port and financial center.
India’s failure to match road, railway and port development with its economic growth would be a blow to Japanese companies, which are expanding manufacturing in the world’s second-most populous country. Abe’s government will help India move ahead with the infrastructure project by giving loans at reduced rates.
Abe held talks with Indian Prime Minister Manmohan Singh on Wednesday night.
India expects to complete a "comprehensive economic treaty" with Japan by year’s end, Trade Minister Kamal Nath said earlier in the day at a meeting of businesspeople from both nations in New Delhi. India wants to attract $5 billion in investment from Japanese companies, more than double the inflows in the past 15 years. The economic treaty will pave the way for a free-trade accord.
"The amount of trade between our countries will be increasing dramatically in the near future," Abe said in his address. "It would be no mistake to say that in only the next three years, we can expect it to reach about $20 billion."
Abe reiterated his beliefs that India-Japan relations are "blessed with the largest potential" of any bilateral relationship in the world and that a strong India is in Japan’s interest and vice versa.
On how to expand bilateral relations, the two countries must jointly consider cooperating in the security arena, particularly over their interests as maritime states near sea lanes, Abe said.
He also called on India to "work together" toward halving global greenhouse gas emissions by 2050, as proposed in his "Cool Earth 50" initiative to fight global warming.
In his speech, Abe refrained from touching on India’s civil nuclear accord with the U.S. But the issue is a focus of attention for the two leaders’ summit. Japan is critical of the accord because it allows nuclear-armed India, which is not part of the Nuclear Nonproliferation Treaty, access to U.S. atomic technology, undermining the global nonproliferation effort.