Singh in Tokyo on Thursday. (PTI)

Tokyo, Dec. 14: A new partnership between India and Japan can lay the foundation of an Asian economic community, Prime Minister Manmohan Singh said here today.

Addressing a joint session of the Japanese parliament, known as Diet, Singh outlined a new Asian initiative, in which the two countries could work together on economic, strategic and global issues.

The partnership has the potential to create an “arc of advantage and prosperity across Asia”.

Singh admitted that the trade and investment ties between the countries were “well below the potential”.

He compared India’s trade with China and South Korea — which, according to him, was “booming” — to the slow growth of India’s economic ties with Japan. China’s trade with India is nearly three times India’s trade with Japan, and South Korea’s is almost equal to Indo-Japanese trade. “This must change,” he told Japanese parliamentarians.

Tomorrow, he meets his Japanese counterpart, Shinzo Abe, to launch negotiations that will lead to a comprehensive economic partnership agreement. It aims at encouraging a greater flow of trade, investment and technology between the two countries.

Singh used both history and the present times to woo Japan. He referred to old cultural ties between the two countries and gratefully recalled Japan’s help to India during the latter’s balance of payments crisis in 1990.

If the members of the Diet applauded him over his reference to Radha Binod Pal, whom the Japanese of the older generation fondly remember for his dissenting judgment in the Tokyo Trials after the Second World War, they did so also when Singh outlined India’s growing stature as an economic power.

Rounds of applause greeted Singh when he told his audience that young Indians were learning the Japanese language and taking to Japanese delicacies like sushi and tempura.

Later, at a function to unveil a festival of India in Japan and to launch the Japan-India Friendship Year in 2007, Abe called Singh’s speech at the Diet “historic”.

He was particularly impressed, he said, with Singh’s reference to Pal. Abe also described the emerging partnership between the two countries as “the most important bilateral relation for Japan in the world”.

But it was with the image of a new India with a liberalised economy and a high-tech society that Singh sought to woo Japan more.

Today, India has emerged, he said, as an important player in knowledge-based sectors such as information technology, biotechnology and pharmaceuticals.

If India’s poor infrastructure facilities have been a major concern for Japanese investors, Singh sought to assure Diet that things were improving on that front.

Massive investments were being made, he said, for the expansion and modernisation of roads, railways, telecommunications, airports and seaports.

India’s GDP, which had been growing at 6 per cent for many years, was now growing at 8 per cent a year.

Commerce minister Kamal Nath, who met his Japanese counterpart and other ministers, mooted the idea of a Japan-India infrastructure fund. He told the Indian journalists visiting here that the fund could be used for the Delhi-Mumbai-Calcutta freight corridor, the Delhi-Mumbai industrial corridor and for new special economic zones being planned in different parts of India.

Other than the mega projects, in which the Japanese were showing interest, India is keen to engage Japan in small and medium enterprise, in which the latter has expertise. India would like Japan to be the “focal point in our Look East policy”, Nath added.