The Japanese and Indian business leaders welcome the fact that both governments reached an agreement in principle in negotiations for the India-Japan Comprehensive Economic Partnership Agreement (CEPA). We appreciate the concerted efforts of both governments to realize a mutually beneficial CEPA, an early conclusion of which was also recommended by the India-Japan Business Leaders Forum (BLF).
Business leaders of both countries share the perception that Asia serves as an engine for the global economy to overcome the challenging economic circumstances that we face today after the crisis. Above all, the two countries who have shared the same values of democracy, human rights and compliance with international law, could contribute to stable and sustainable economic growth in this region as well as the global economy, through broadening and deepening the bilateral economic partnership.
The interest of Japanese private sector in India is rising, and, currently, 627 Japanese companies have branches in India as of October, 2009. Japan's direct investment in India in 2008 is about 542.9 billion yen and this is a substantial increase compared to previous year which was about 178.2 billion yen.
The Japanese and Indian business leaders, following the 2nd meeting of the Forum in October, 2008, 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.
Since CEPA is essential as an institutional infrastructure to further accelerate and consolidate business activities, we urge both governments to enter into India-Japan CEPA as soon as possible and also ensure its proactive implementation.
Continuous improvement in the investment and business climate in India is important even after the implementation of CEPA to strengthen the competitiveness of business in India. There should be more emphasis on areas such as land acquisition system, taxation system, relaxation and deregulation of FDI restrictions for retail and financial services and creation of an enabling environment for FDIs in other priority sectors. As provided within the CEPA framework, we recommend setting up of a Committee, jointly represented by public and private sectors of both countries, to discuss the above agenda.
Indian Services sector especially IT, ITES (Information Technology Enabled Services) and professional services, have a strong interest in the Japanese market. While the CEPA is expected to open up such markets for Indian entrepreneurs, there is also a need for greater interaction at Business-to-Business levels to enhance mutual trust and confidence. Similarly, Japan must also allow access to Indian pharmaceutical companies who have already earned a very well established reputation and business globally.
Both business leaders 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 the existing challenges in both countries such as the simplification of working visa procedures.
Business communities on both sides conclude that the Delhi Mumbai Industrial Corridor (DMIC) project provides a unique opportunity to India to develop new generation greenfield manufacturing cities in a sustainable manner. This partnership project with Japan would enable India to converge technologies and expertise of Japanese corporates, across infrastructure sectors, to create Smart Cities of future.
The Japanese side affirms the importance of increased assistance to infrastructure projects through effective Public-Private-Partnerships (PPPs) between ODA and private investment. Since India requires huge and rapid development of infrastructure, it is important to build an environment where the private sector can easily participate in effectively promoting PPPs. Both businesses recommend enhanced dialogue amongst themselves and with the two governments for formulating bidding conditions, suggesting risk management techniques and structuring of PPPs. This would help to accommodate advanced technologies and also make PPP schemes more feasible.
Technology development and technology transfer are essential to make bilateral economic ties stronger. For example, the Japanese and Indian business leaders hope for a steady progress in the India-Japan Energy Dialogue and welcome the Japanese proposal to promote new technology based projects such as "Smart Communities" or "Eco Cities".
Besides focussing on consumer intensive sectors such as manufacturing and automobiles, emphasis also needs to be given to technological exchanges in sectors of agriculture and environmental management. Environmentally friendly technologies from Japan in these sectors will contribute immensely to a comprehensive social and economic development of India.
As part of the improvements in infrastructure in the power sector in India, India-Japan cooperation in nuclear power plants is strategically important. To facilitate this process, both business leaders request the two governments to work towards greater cooperation in this regard, including signing of any agreement, if necessary.
Given the global competition for scarce resources, new joint India-Japan initiatives are expected to develop strategically important resources such as rare earth in India.
The India-Japan Business Leaders Forum shares the perception that further efforts should be made to liberalise trade and investment in Asia-Pacific region, and more joint efforts by Japan and India would add impetus towards this end.
As India and Japan strengthen their economic relations, the two countries also realize the importance of giving a strategic orientation to their bilateral partnership to be able to cast a beneficial influence over economic development in the Asia-Pacific region.
Japan will host the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting in Yokohama in November, 2010. We acknowledge that the visit of Indian Prime Minister before this event is a good opportunity to exchange views on the prospects of Asia-Pacific region as well as bilateral relations. The Japanese business community welcomes greater involvement of India in regional framework.
In addition, the Japanese and Indian 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 network and strengthening of supply chain in this region.
Japan and India have shared a cordial and friendly relationship historically. In addition, both countries have great potential to develop strategic economic partnerships based on mutually complementary relationship and also the geopolitical significance of this partnership.
The India-Japan CEPA is the corner stone to further evolve and establish the above partnership. However, the public and private enterprises of India and Japan need to put in further concerted efforts to nurture this seed into a robust economic alliance from which both businesses benefit.
The India-Japan Business Leaders Forum wishes that India-Japan CEPA will deepen bilateral economic ties and contribute to the stability and prosperity of the Asia-Pacific region through joint efforts of these two major democracies in Asia.
Finally, members of the India-Japan Business Leaders Forum would like to record their appreciation for the trust reposed in them by His Excellency Mr. Naoto Kan, Prime Minister of Japan, and His Excellency Dr. Manmohan Singh, Prime Minister of India.
Mukesh D. Ambani
Chairman & Managing director
Reliance Industries Limited
Co-Chair, India-Japan Business Leaders Forum
Chairman, Nippon Keidanren
Chairman, Sumitomo Chemical Co., Ltd.
Co-Chair, India-Japan Business Leaders Forum