NEW DELHI – In their first bilateral economic talks ever, Japan and India agreed Monday to strengthen joint efforts to develop India’s infrastructure and will try to forge a specific plan by winter, Japanese officials said.
Foreign Minister Koichiro Genba, trade minister Yukio Edano and Financial Services Minister Shozaburo Jimi participated in the economic dialogue in New Delhi with Indian External Affairs Minister S.M. Krishna and Commerce and Industry Minister Anand Sharma.
The agreement follows one made in December by Prime Minister Yoshihiko Noda and Indian Prime Minister Manmohan Singh to jointly invest $9 billion in the Delhi-Mumbai Industrial Corridor, a project aimed at building a freight railway and other infrastructure.
They also agreed broadly that India would start exports of rare earth metals produced from the joint project to Japan around August.
The project, which involves Toyota Tsusho Corp. and Indian Rare Earths, a state-run company, will provide Japan with about 4,000 tons of rare earths a year, accounting for about 14 percent of its annual demand for the strategic elements, which are needed to make all sorts of electronic gadgets and appliances.
Edano said at a news conference after the talks that the exports will be a welcome development for Japan at a time when it has grown heavily reliant on imports from China, which commands an overwhelming share of the world’s known rare earth resources.
The agreement is a “significant accomplishment because diversification (of our sources of rare earth metals) is an important issue,” Edano said.
The two countries will start selecting infrastructure projects to invest in while India mulls whether to relax financial regulations to promote financing by Japanese banks, officials said.
Any financial deregulation is expected to exempt Japanese banks from having to reach lending targets for small enterprises and other sectors in India.
In a separate meeting between Genba and Krishna, they agreed to set up a framework to discuss maritime issues, including security, measures for dealing with cyberattacks, and continue negotiations on a nuclear cooperation agreement.