India seeks Japanese investment

New Delhi: The Confederation of Indian Industry has sought Japanese investment in infrastructure, as India and Japan are set to steer the next round of talks under the Comprehensive Economic Partnership Agreement end of the month.

“India needs $500 billion in investment over the next five years of which $320 billion would be required for infrastructure alone. There is a vast potential for high level Japanese investment in infrastructure, power and telecom,” said the CII.

The negotiations for a CEPA between both the countries started in January 2007 and there has been five rounds of discussions so far.

Bilateral trade:

With the next round of talks just a few days away, the CII has proposed that the bilateral trade should be based on foreign direct investment and not on official development assistance. It has cited that Japan’s contribution to the overall FDI in India from April 2000 to October 2007 stood at $1.89 billion, making it 4.56 per cent of total amount invested.

The industry chamber has suggested Japanese investors to tap the special economic zones to establish manufacturing facilities at competitive prices.

Concerned over India’s declining exports to Japan and an increase of trade deficit by 60.53 per cent in 2006-07, the CII has sought the need to eliminate technical barriers to trade and tariff liberalisation in a manner that it would offer “real market access” opportunities to both the countries.

On rules of origin, contradictory to Japanese preference for a single criteria, the CII has argued for a dual criteria. “Dual criterion, which includes change in tariff heading or CSTH and value addition is more acceptable to the Indian industry in determining the value added in the country of origin for the textile, chemicals and the automobile sector,” said the industry chamber.