32rd Joint Meeting of India-Japan Business Cooperation Committees
November 1, 2004 New Delhi

His Excellency Mr. Kamal Nath, Honorable Minister for Commerce and Industry
His Excellency Mr. Enoki, Japanese Ambassador to India,
Mr. Onkar Kanwar, Sr. Vice President of the Federation of Indian Chambers of Commerce and Industry.
Mr. Vellayan, Chairman of the India-Japan Business Co-operation Committee,
Mr. Ashok Jha, Secretary , Ministry of Commerce and Industry,
Mrs Greetanjali Kirloskar, Co-Chairperson of the India-Japan Business Cooperation Committee,

Ladies and Gentlemen:

As the representative of the Japanese delegation, I would like to offer a few remarks on the occasion of the opening of the 32nd Joint Meeting of the Japan-India Business Co-operation Committee.

First of all, I would like to express my heartfelt thanks for the warm and gracious hospitality extended to us by our hosts here in India.

In November of last year, I had the honor of succeeding Mr. Kawamoto of Honda Motor Co., Ltd. as chair of this committee. Accordingly, I have visited India three times this year, once in February, once in August and on this occasion. In just these three visits over a short period of time, I have directly witnessed the changes occurring in India in both the political and economic spheres. I can truly perceive the winds of changes blowing across the country.

The 31st Joint Meeting of the JIBCC and IJBCC was held in Bangalore in December 2002, and the past two years have certainly been a period of rapid changes in the world. India experienced major political changes this year, while the international community strove to achieve a new order amidst major political and economic shifts that have occurred since the beginning of the war in Iraq last year. In the area of politics, world peace remains under the threat of terrorism. In the areas of industry and the economy, China is becoming an increasingly important presence, and this has sparked talk of the risk of over-concentration in China. There have also been substantive moves toward bilateral and multilateral regional economic alliances among the nations of Asia. In an era of rapid change such as this, it is necessary for private-sector organizations like the JIBCC to promote cooperation and harmony by sponsoring personal and business exchanges.

Throughout the 1990s, Japanese participants in these meetings were rarely able to speak optimistically, but in the past two years, the Japanese economy has begun to regain some of its vitality. I would like to explain a little bit about this vitality. Our GDP recorded a growth rate of 3.3 percent in 2003 and the IMF predicts that it will grow 4.4 percent this year. Behind this recovery lie four factors, which I will describe.

First of all, exports, especially to China and the United States, have continued at a favorable pace in both 2003 and 2004. Exports to China in particular amounted to $87 billion in 2003, and in the first six months of 2004, we have already exported $52.2 billion worth of products to China. Second, this favorable trend in exports has been accompanied by an increase in individual consumption. I believe that this is because we are producing products that consumers want to buy- such as flat screen televisions and smart household appliances- and putting them on the market at prices that consumers can afford. The third factor is that these first two factors have led to improved company performance. This is the first time that manufacturing industries have been able to remain profitable amidst rising energy prices. The fourth factor is that favorable company performance has spurred investment in facilities and equipment. Despite all this, there are worries that the rapid rise in crude oil prices in the second half of this year will cast a shadow on the world economy. Some analysts say that each price increase of $10 per barrel leads to a 0.4 percent drop in Japan's GDP.

Turning our attention to relations between Japan and India, we find that the ties between our two countries have grown stronger in the past two years. Events such as then Foreign Minister Kawaguchi's second visit to India in August of this year are leading to ongoing dialogue between Japan and India on becoming global partners and building a foundation for cooperation in a wide range of areas, including politics, economics, culture, security, and global environmental problems. This is an extremely fortunate and promising development.

This has been an especially important year with respect to industrial and economic relations. As you know, our minister of economy, trade, and industry. Shoichi Nakagawa, joined with representatives of the major member companies of the JIBCC to visit India for the first time. During his visit, Minister Nakagawa proposed a framework for policy-related dialogue between the two governments, and I understand that the first meeting under this framework will take place this year. I believe that the JIBCC will take advantage of the opportunity presented by this meeting and work proactively to invigorate economic relations between our two countries. In fact, JETRO's President Tsukamoto is scheduled to speak about this area, focusing on the current situation in Japan, at the second plenary session.

You will have many opportunities to learn about economic relations between our two countries in the subsequent sessions, but i would like to touch upon a few points.

First we must mention India's advances in information technology. This industry has grown so rapidly that we can almost say that the worldwide IT revolution is supported by the efforts of Indian software technicians. Yet it has long been pointed out that Indian software has not made many inroads into Japan, which has the world's leading information service industry with high demand for software.

This committee intends to continue to move forward with programs necessary for making use of Indian software and the people who develop it. This will be one of the issues discussed in the second plenary session.

Viewed in terms of its potential market, India presents immense business opportunities and possibilities. Japanese companies are extending their reach into India slowly, but on the whole, the number is increasing, and at present, about 230 companies are doing business here. However, I believe that the lack of sufficient infrastructure is preventing any major increases in investment and I also think that Japan can offer significant cooperation in that respect. In Fiscal 2003, the Japanese government decided to offer India Y25 billion in yen loans. We anticipate that applying these loans to the construction of electrical power, transport and communication facilities will lead to a gradual improvement in the investment climate.

The most important factors in building friendly relations between countries are contacts among their people and the deepening of mutual ties.

I hope that all committee members in attendance from both countries will, express their frank opinions and actively make proposals during the sessions. There will be further opportunities for interaction during the tea breaks, luncheon, and dinner. I hope that these occasions for discussion, informal talks, and friendly conversations will lead to deeper ties of mutual understanding and friendship.

In closing, I would like to express my sincere hope that this joint meeting will contribute to future business relations between our two countries and that economic relations between Japan and India will continue to grow and develop.

Thank you.