India and Japan signed a $75 billion bilateral currency swap agreement, as Prime Minister Narendra Modi wrapped up his fifth summit with his counterpart, Shinzo Abe. The agreement is expected to bring greater stability to the rupee and capital markets in India. With greater strategic convergence coming into sharp relief, the two countries also agreed to start a 2+2 dialogue at the foreign and defence ministers’ level as well as work together on infrastructure projects in Bangladesh, Myanmar and Sri Lanka, giving substance to Indo-Pacific policies. The swap agreement, a finance ministry release said, “will enable the agreed amount of foreign capital being available to India for use as and when need arises.” In 2013, India and Japan worked out another swap agreement, increasing it from $15 billion to $50 billion, when the rupee had been under stress.
An India-Japan vision statement issued after the summit-level meeting between the two leaders welcomed the swap agreement. Officials said the currency swap agreement will have a positive impact on financing the current account deficit. “A strong signal to our financial and currency markets,” Shaktikanta Das, a member of the 15th finance commission, tweeted.
The summit, marked by a full day of informal meetings and deep conversations on Sunday, as well as delegation-level talks and industry outreach, saw the vision statement announce a “new era in India-Japan relations,” which will enable them to “cooperate for peace, stability and prosperity of the Indo-Pacific.” Based on their shared vision, the two Prime Ministers reiterated their unwavering commitment to working together towards a free and open Indo-Pacific. The two leaders also affirmed that Asean unity and centrality are at the heart of the Indo-Pacific concept, which is inclusive and open to all. They shared willingness to expand concrete cooperation with the US and other partners.”
In comments to the media, Modi said, “Without the cooperation of India and Japan, 21st century cannot be a century of Asia. Shinzo Abe and I have agreed to the 2+2 dialogue between our foreign and defence ministers. Its purpose is to promote peace and stability in the world. We both agree that from digital partnership to cyber space, from health to protection, and from sea to space, in every field we will strengthen our partnership,” he added.
India and Japan also exchanged a Notes and Loan Agreement for the second tranche of Japanese official development assistance loan for the Mumbai-Ahmedabad high-speed railway project. Modi appreciated Japan’s role in promoting connectivity through quality infrastructure projects such as the Western Dedicated Freight Corridor and the Delhi-Mumbai Industrial Corridor. Japan is funding 80% of the Mumbai-Ahmedabad bullet train project through a soft loan of £7.90 billion at an interest rate of 0.1%, with a tenure stretching over 50 years and a moratorium period of 15 years.
“The two leaders reaffirmed their shared commitment to the total elimination of nuclear weapons and remained resolute in the task of strengthening international cooperation to address the challenges of nuclear proliferation and nuclear terrorism,” the vision statement said.
The two sides also signed an agreement on the implementing arrangement for deeper cooperation between the Indian Navy and the Japan Maritime Self-Defence Force.
Modi invites Japanese businessmen
Modi invited Japanese businessmen to engage more with India to speed up the investment process in New Delhi. "I always talk about 'strong India strong Japan'. On this occasion, I express my gratitude to Japanese businessmen for showing their faith in India. I invite you all to engage with India to speed up the investment process there," Modi said while interacting at the Business Forum Summit.
The Prime Minister highlighted "low cost manufacturing" in India as a major benefit for businesses. Talking about his government's efforts in the "ease of doing business" front, he said: "India has started ranking its 36 states and Union Territories on the ease of doing business. This has resulted in a healthy competition among them for investment and led to better results."
On industrial progress, he said India was moving rapidly towards "Industry 4.0" because of inventions in the field of technology like Artificial Intelligence (AI), Internet of Things (IoT), 3D printing and robotics. Highlighting the achievements of his government in the last four years, the Prime Minister said India was continuously working with the spirit of "Indian Solutions-Global Applications."
