New Delhi, Aug. 31: India will be seeking greater market access from Japan during Prime Minister Narendra Modi’s visit in return for enclaves along the Delhi-Mumbai Industrial Corridor and a joint venture to run bullet trains.
Commerce minister Nirmala Sitharaman told The Telegraph: “We are asking for greater access to their market so that Indian goods such as gems and jewellery, pharmaceuticals and textiles can be exported.”
The Indian pharma industry, whose growth has slowed down to 1.2 per cent at $14.84 billion last financial year, has been trying to prise open the tightly controlled Japanese drug market.
With rising costs of healthcare for the Japanese population, the country is slowly opening up to generic drug imports and foreign healthcare professionals.
India will also be looking to sign a deal between state-run Indian Rare Earths (IRE) and Japanese trading house Toyota Tsusho. IRE will make mixed rare earth material from uranium and thorium, which Toyota Tsusho will use to produce neodymium for electric and hybrid cars.
Annual production will be about 2,000-2,300 tonnes, which is around 15 per cent of Japan’s demand; around 2,000 tonnes a year can be exported to Japan from as early as next year.
Sitharaman said the “Japanese are interested in some of the rail corridors”.
India has long been considering a high-speed railway network, but felt constrained by the high costs.
Plans to set up around six such corridors, conceived during Mamata Banerjee’s tenure as the railway minister, were quietly buried after the political leadership realised the cost implications. For instance, a 550km line between Mumbai and Ahmedabad will cost Rs 60,000 crore.
Officials said the Narendra Modi-government was also working on a plan to give single-window clearances at the central and state levels for the six mega industrial zones it wants to promote along the Delhi-Mumbai Industrial Corridor. At present, a business has to take an average 38 permissions from different agencies to set up a factory.
The aim is to funnel both foreign direct investment as well as domestic funds into the corridor to be set up at a cost of $90 billion.
The zones are expected to attract more than half of the foreign direct investment into India. Foreign fund inflows into India had dropped from an all-time high of $46.6 billion in 2011-12 to $36.4 billion in 2013-14.
Several big Japanese groups have already become anchor clients, including Suzuki, Mitusbishi, Toshiba, Mitsui and Kansai.
The proposed industrial regions, which want to avoid the pitfalls of taking over or buying of contiguous land, aims to declare a part of a state or even a group of states as a manufacturing investment region and give them world-class facilities, while allowing the industry decide where to buy the land.
The idea of special investment regions had come from a group of non-resident Indian CEOs who had floated the concept in 2004 when the Manmohan Singh-government came to power.
The scheme with suitable modifications, will now be rolled out by the Modi government.