The government is planning to help improve transport connectivity in South and Southeast Asia by renovating existing roads and building new ones, sources familiar with the matter said Monday.
The infrastructure support plan, aimed at strengthening economic ties within regions including India and Myanmar, is Japan's answer to Chinese-led projects launched to link southern China and South Asia by road and rail.
The Japan International Cooperation Agency will be responsible for drawing up the financing and construction plans. It will invite officials from Bangladesh, Bhutan, India, Myanmar, Nepal and Thailand to New Delhi in mid-January to brief them on site surveys, the sources said.
Japan expects to confirm a plan with India to proceed with road-building projects in January when Prime Minister Shinzo Abe visits the country, they said.
The Japanese projects are expected to improve road connectivity between Bangladesh, India, Myanmar and Thailand while giving Bhutan and Nepal better access to coastal areas.
Aging road infrastructure and constraints on its capacity and efficiency have become trade barriers between the countries. The economies of Bangladesh, India and Myanmar, for instance, would benefit from new roads in areas where the land transport infrastructure is underdeveloped or inefficient.
Japanese companies in the regions are also likely to profit from improved connectivity because it would improve their supply chains.
But such infrastructure development may not immediately lead to improved trade between countries with unresolved diplomatic issues.
Bangladesh, for instance, has limited cross-border trade with India and Myanmar due to diplomatic constraints.