'B'lore is a very attractive destination for Japanese investments'

In an interview with Anirban Bhaumik of Deccan Herald, ambassador Saiki, who is now on a visit to Bangalore, however, says that Japan would remain firm in its commitment to help an ‘old friend’ like India to build infrastructure, although the bilateral talks on civil nuclear cooperation have slowed down after the crisis in Fukushima. Excerpts:

Can you give a overview of the Japan-India relations and its prospects?

The year 2000 visit of the then Japanese prime minister Yoshiro Mori to India in fact marked a new beginning in bilateral relations. It reaffirmed that we two are strategic partners. Since then we have been making every effort to strengthen bilateral relations in political, economic and cultural areas. Despite the distance, we are important to each other from the geo-strategic viewpoint. We have a giant neighbour in common. It is only natural that the two of us come closer at the strategic level. There are many levels of dialogues between Japan and India. We are looking forward to intensification of consultations at all levels.

India has been the top recipient of Japan’s Overseas Development Assistance. Do you think that the recent earthquake and tsunami will have an impact on the ODA inflow to India?

No. India has been the top recipient of ODA from Japan for eight years. And for 2011-12, we have received Indian government’s request for the ODA and we are examining it. We have just exchanged notes for formalising soft loan assistance worth 155, 549 million yen (Rs 8,632 crore) to seven projects in India. This includes 19,832 million yen for the second phase of Bangalore metro. We have extended the loan without any deduction from its original commitment to India. I don’t think there will be any reduction in future ODA inflow from Japan to India. You can count on us.

India has been urging Japan to ease its export control laws to facilitate high-technology trade. Has there been any progress on this?

I see a promising picture of future economic relations. Bilateral trade volume has doubled in the last five years. The number of Japanese companies doing business in India also doubled in the last three years from 362 to 725 and it is still increasing. The two countries signed a Comprehensive Economic Partnership Agreement on February 16 last and it will come into effect on August 1. Under it, the import duty will be zero on 90 per cent of products coming from Japan to India and on 97 per cent of exports from India to Japan in 10 years. Indian companies will have more opportunities in Japan, particularly in pharmaceuticals and services sectors. We have quite rigid export control laws on high-tech trade. There have been relaxations, which are taking place every year.

Can you update us about the status of the Dedicated Freight Corridor and the Delhi-Mumbai Industrial Corridor?

Japan is committed to the western DFC, between Delhi and Mumbai. For the first phase of DFC,  we have already committed to the loan agreement and notes have been exchanged in March last year. The main loan amount is about 90 billion yen. Engineering service loan agreement for the second phase has also been signed. On the DMIC, some companies may have mentioned about the problems of financing in rupee terms. It’s being worked out with the cooperation of Indian government.

As you are on a visit to Bangalore, how do you view the future of Japan-India cooperation in the IT sector? Has there been any progress on Karnataka government’s plan to set up an industrial park exclusively for Japanese companies near Bangalore?
Bangalore has been very famous as an IT hub. Bangalore metro is one of the projects that received Japanese ODA. As many as 74 Japanese companies, including Toyota, Nissan and Komatsu, have presence in Bangalore and more are coming. Bangalore is a very attractive destination for investments from Japan. We in Japan are keenly interested in strengthening our cooperation with India in the IT sector. Karnataka government planned to set up an industrial park for Japanese companies near Bangalore. Many Japanese companies are interested to go there. The problem is that the land acquired by the State government needs to be developed. We are hoping that we will be able to find reliable, good developer.

Did the mishap at Fukushima and the tsunami slow down the Japan-India talks on civil nuclear cooperation?

Yes, our talks on civil nuclear cooperation did slow down to some extent. We certainly have to take into account what happened at Fukushima. We have to look into the safety standards. Both Japan and India are reviewing safety standards at nuclear facilities.

Unless we are more comfortable and certain that we can sit down again and talk about civil nuclear cooperation we don’t want to rush to the negotiating table. But we do recognise that we are becoming more and more dependent on nuclear energy. The core issue is how to make the nuclear facilities safer.