India and Japan Binding Knot on $90 Billion Industrial Corridor Project

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Researched by Industrial Info Resources (Sugar Land, Texas). When Japan’s Prime Minister Shinzo Abe meets Indian Prime Minister Manmohan Singh in New Delhi in August investment in the $90 billion Delhi-Mumbai Industrial Corridor (DMIC) will be top of the agenda. This follows Singh’s visit to Japan in December 2006 and a recent top trade ministerial visit to India when the chairman of the board of the Tokyo Stock Exchange suggested deploying Japanese Deposit Receipts (JDRs) to tap into nearly $13 trillion of Japanese household savings for investment in India.

The development of clean coal and energy efficient technologies are on the agenda for discussion. The DMIC project entails development of infrastructure along the 1,483 kilometer dedicated freight corridor linking India’s top two metros. The project includes building airports, setting up several agro-processing parks and special economic zones (SEZs), constructing a 4,000 MW power plant and building ports in Gujurat and Maharashtra.

Indian commerce and industry minister said, “DMIC is one of the flagship projects of the growing partnership between India and Japan. This project would have world-class infrastructure with the potential to provide three million jobs in various sectors and tripling the industrial output.” He said that with the establishment of the corridor India could look forward to substantial, and a quantum jump in investments by Japanese companies that could total $10 billion in the next five years.

The first phase of the project is expected to be completed by 2012. A large number of Japanese companies are expected to invest heavily in the corridor and make it a hub for production and exports to Europe and West Asia. Small and medium companies are expected to feature in this process. The Delhi Metro and the Dedicated Rail Freight Corridor (DFC) are other major projects, in addition top the DMIC, into which India is hoping the Japanese will invest.

Another round of meetings and negotiations by stakeholders from both countries is scheduled in a fortnight’s time, ahead of Shinzo Abe’s visit in August.

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