India Intelligence Report

   Bringing Economic Focus to Indo-Japan Ties



  • Unique Special Economic Zone for Japanese Small & Medium Enterprises

  • Japan lifting 20-year old ban on Indian mangoes

  • Japan Bank for International Cooperation to fund Pench Diversion Scheme in Madhya Pradesh

With Indo-Japan relations not growing at the right pace, both countries have signed an accord that will “meet the needs of Japanese investors” and “address India’s needs” to ensure “strategic importance of both countries” are met. The plan is to build special economic zones (SEZ) and industrial parks as a “support platform for a better trade and investment climate in India.” India and Japan are planning on a Comprehensive Economic Cooperation Agreement (CECA).

The Japanese conglomerate Mitsui has been awarded the charter to create a “Japanese city” which is being positioned as distinctly different from current SEZ. This “city” will cater to the needs of Japanese small and medium enterprises (SME) and will be located on a 2000 acre site in Haryana. Commerce and Industry Minister Kamal Nath said that “We are looking for a flow of investments from Japanese companies, especially the SME sector, which are a repository of technology but have been slow to invest in India.” While major Japanese companies like Honda and Suzuki have large investments in India, Nath said that “We are looking to scaling up their presence by setting up this industrial sector.”

In a major boost to agricultural exports, Japan is lifting a 20 year old ban on Indian mangoes because of a suspected fruit fly infestation in 1986. Fresh mangoes from Andhra Pradesh, Gujarat, Maharashtra,  Uttar Pradesh, and West Bengal will soon be exported to Japan.

Japan Bank for International Cooperation will fund the Pench Diversion Scheme for Irrigation in Chhindwara (Madhya Pradesh). This Rs. 564 crore (USD 122 million) project will irrigate 100,000 hectares.