Prime Minister of India - Dr. Manmohan Singh

PM's address to the Japanese Business Delegation

"It is a great pleasure and honour to welcome you all to this capital city of our country. I thank Prime Minister Abe for taking the initiative of bringing such a distinguished business delegation to India. I express my admiration for the ambitious vision that you have often set out in your speeches - of close economic engagement between India and Japan. I sincerely believe that such an engagement, between Asia's largest democracy and its most developed country, will create an 'arc of advantage and prosperity' through out Asia.

In December 2006, during my visit to Japan, Prime Minister Abe and I decided that the time had come for our two countries to raise our ties to the level of a global and strategic partnership. In today's changed international system, the political, economic and strategic interests of India and Japan have never been so convergent as they are today.

The core element of our global and strategic partnership is a comprehensive economic engagement between our two countries. To accelerate this process, we decided to establish a Special Economic Partnership Initiative. This initiative will focus on key projects in areas ranging from the transport sector to industrial infrastructure, technology and education.

There are enormous complementarities and commercial potential that exists in a strategic alliance between a technologically advanced, mature industrial economy like Japan's and a rapidly growing developing country like India's. The Japanese automobile industries like Toyota, Honda and Suzuki have located parts of their global production chains in India. We need more such models and examples of mutually beneficial collaboration in other sectors. We will do all that is in our power to facilitate their entry and also to ensure that they share our prosperity.

Today, the Indian economy is in a position to sustain GDP growth rates that are close to 9%. Foreign Exchange reserves stand at over US$ 200 billion. We expect to receive Foreign Direct Investment of about US$ 30 billion this year. Our savings and investment rates are close to 35% of our GDP. Our foreign trade constitutes 33% of our GDP, which is a testimony to India's growing integration into the global economy. We have a very favourable demographic profile and a strong educational system to support rapid industrialization.

It is our aspiration to reach and sustain double-digit rates of annual economic growth. The guiding principle will be to harness this growth towards employment generation, poverty reduction and human development. As businessmen, you will understand the implications of these policies in terms of their impact in the years ahead on our labour and consumer markets.

I do recognize that sometimes problems do arise in implementing some of the policies that we adopt. We much recognize the complexities of a large and diverse nation like India and the needs and aspirations of different sections of our people. But we have shown over the past many years that we can resolve and manage effectively these pressures and contradictions and build a durable and stable policy framework. I assure you that we will address your concerns in the same spirit of transparency.

We have seen and expect to further see a massive increase in investment, both public and private, domestic and foreign, in our infrastructure. The institutional architecture for sustained high levels of investment in infrastructure has been put in place - public private partnerships, systematic bidding systems, viability gap funding and other financing mechanisms and standardized approved procedures. These are already giving solid results. The increased investment in infrastructure is driving our growth as well as creating new demand.

It is the intention of our Government to create and sustain an environment conducive to risk taking and long-term investments in India. Over the past few years, our FDI regulations have also been made more liberal, transparent and investor friendly. A comprehensive review of the FDI policy was undertaken last year. We are working to ease the supply constraints in the availability of skilled labour. Even so, we are open to your suggestions and I promise you a very careful consideration of your concerns.

Japanese companies are known for taking a long-term view of their businesses. I believe that India has much to learn from your corporate philosophy and practice. We are keen to learn from you about how to build an environmentally sensitive industry; corporate involvement in skill development; socially responsible advertising and so many other issues that today's managers have to grapple with.

For far too long the economic engagement between India and Japan has lagged behind our political ties. We now have the opportunity to make up for lost time. We are discussing some very big flagship bilateral projects such as the Delhi-Mumbai Industrial Corridor and the Rail Freight Corridors. These projects will open up huge opportunities for the Japanese industry and I hope that you will actively partner the government in making a success of these gigantic initiatives.

It is against this backdrop that Prime Minister Abe and I have established the India-Japan Business Leaders Forum. At the end of the day it is business leaders like you who will give meaning and substance to our joint vision of a unique economic engagement between India and Japan.

On behalf of the Government of India, I once again welcome all of you to our country. I do hope that your visit and interactions will be productive and fruitful, and that you will avail of this opportunity to see first hand the new exciting opportunities India now offers today. I also hope that you will become part of India's growth story, as we shape an economy that reflects the aspiration and confidence of over a billion strong population."