Strengthening India-Japan Economic Ties
India and Japan have long enjoyed a strategic partnership that is recognized globally. This relationship is built on shared values of democracy, culture, and economic cooperation. Union Minister of Commerce and Industry, Shri Piyush Goyal, emphasized these points during his keynote address at the India-Japan Economy and Investment Forum. He highlighted the deep-rooted cultural ties between the two nations, noting that the Seven Lucky Gods of Japan have origins in Indian tradition. This connection reflects the unique blend of cultures, much like the fusion of sushi and spices. As India continues to grow economically, Japan remains a vital ally, contributing significantly to India’s development through foreign direct investment (FDI) and collaborative projects.
Economic Contributions and Investments
Japan has played a crucial role in India’s economic growth, with FDI from Japan exceeding $43 billion from 2000 to 2024. This investment makes Japan the fifth-largest source of foreign investment in India. The Comprehensive Economic Partnership Agreement (CEPA), signed in 2011, has further strengthened bilateral trade. Currently, over 1,400 Japanese companies operate in India, with 11 industrial townships established across eight states. These enterprises are involved in various sectors, contributing to job creation and economic development.
Major infrastructure projects illustrate Japan’s active participation in India’s growth. Notable examples include the Mumbai-Ahmedabad High-Speed Rail and metro systems in cities like Delhi, Ahmedabad, Bengaluru, and Chennai. These projects not only enhance connectivity but also showcase the technological expertise Japan brings to the table. Minister Goyal expressed optimism about the upcoming Shinkansen bullet train service between Mumbai and Ahmedabad, which is expected to revolutionize travel in the region. This partnership reflects a commitment to mutual growth and development, paving the way for a prosperous future.
Boosting Manufacturing and Innovation
Under Prime Minister Narendra Modi‘s leadership, the ‘Make in India’ initiative launched in 2014 has significantly boosted the manufacturing sector. Minister Goyal highlighted the collaboration between India and Japan in building globally competitive brands. A prime example is Maruti, which exports vehicles to various countries, including Japan. The goal is to increase the manufacturing sector’s contribution to India’s GDP to 25%, with Japan playing a vital role in achieving this target.
To foster innovation, India is committed to creating a business-friendly environment. Improvements in the ease of doing business are being implemented at both central and state levels. The government is focusing on infrastructure development, public-private partnerships in innovation, and strengthening the research and development ecosystem. Recent budget announcements support these initiatives, reflecting a strategic focus on economic growth. With the world’s largest number of STEM graduates, India boasts a skilled workforce, with women making up 43% of this demographic. This talent pool is essential for driving innovation and meeting the demands of a rapidly evolving global economy.
Quality Standards and Future Collaborations
Minister Goyal emphasized the importance of quality standards in manufacturing, citing Japan as a benchmark for excellence. India aims to adopt similar high standards to enhance its manufacturing capabilities. Indian manufacturers are encouraged to embrace principles like ‘Kaizen’ (continuous improvement) and Lean Six Sigma to improve quality and efficiency. This focus on quality will help balance trade between India and Japan, ensuring reciprocal benefits for both nations.
The Minister invited Japanese businesses to participate in India’s growth story, particularly in sectors like green energy, renewable energy, high-tech manufacturing of semiconductors, electronic goods, and artificial intelligence. Digital technologies are expected to drive progress toward prosperity, reinforcing India’s commitment to innovation and sustainable development. As India continues to evolve as a global economic powerhouse, the partnership with Japan will play a crucial role in shaping its future.
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