Calcutta, Dec. 10: India may soon overtake the United States in bilateral trade with Japan and become one of the hotspots of Japanese foreign direct investment.

The value of trade between India and Japan now stands at $168 billion. “It will exceed the Japan-US trade in the current year,” said Hiromichi Fujita, chairman of Japan-India Cultural and Economic Committee of Friendship Exchange Council (FEC). He was speaking at the consular corps business seminar organised by the West Bengal Industrial Development Corporation (WBIDC) here today.

Fujita actually echoed the view expressed by Yashikazu Takeuchi, consul general of Japan in Calcutta, at a meeting yesterday where he said, “The number of Japanese corporations setting up operations in the country is on the increase and private sector investment has risen rapidly.”

While speaking at a session on Indo-Japanese trade relations organised by the Bengal National Chamber of Commerce and Industry, Takeuchi said, “Bengal ranks second on the foreign direct investment list of Japan in India.” The Bengal chamber also signed a memorandum of understanding with FEC during the session.

The industry sectors that have so far attracted the most of the Japanese investments in India include transportation (28 per cent), telecommunications (18 per cent), fuel (13.5 per cent), chemicals (12.17 per cent) and trading (6 per cent).

Over the last few years, the economic co-operation between the two nations has also increased manifold with Japan’s total loans to India amounting to $ 4,329 million in 2004, grant-in-aid topping $ 399.2 million and technical co-operation totalling $ 179.5 million.

These loans are aimed at upgrading the basic economic infrastructure, alleviation of poverty, improving public health and medical care, and agricultural and rural development. Japan also gives loans to support small businesses and for environmental conservation.

Japan is the second largest importer of Indian gems and jewellery, marine products, iron ore and cotton yarn. “India is also a major importer of goods from Japan, which includes plant and machinery, transport equipment and electronic goods,” said Takeuchi.