I am glad to return to the precincts of Nippon Keidanren. I have always valued this opportunity to interact with business leaders and share my thoughts on India Japan economic cooperation.

Japan’s contribution to India’s economic development has been enormous. For many years, Japan has been our largest bilateral donor and we are grateful for the assistance we have received. Japanese assistance has financed some of our most iconic infrastructure projects such as the Delhi Metro and now the Dedicated Freight Corridor.

Japan has also been a major player in the modernisation of Indian industry in the period after economic reforms. The Maruti-Suzuki partnership is a household name in India. There are other similar examples.

Since my last visit to Japan in October 2010, both our economies have coped with exceptionally difficult situations.

Japan experienced an unprecedented calamity in Fukushima. You met that challenge with characteristic resolve and determination, and your handling of the problem is the subject of much admiration. On the economic side, the latest economic forecasts and the rise in business confidence in Japan are positive developments. India and the world have a strong economic and strategic interest in Japan’s success.

India too has been affected by the difficult circumstances in the world economy. Our growth rate came down to 5% last year due to a combination of global factors and domestic constraints. We cannot do much about the global economy. But we have reacted with determination to overcome domestic constraints on economic growth.

The 5% growth witnessed last year should be seen as a temporary slow down. The Indian economy grew at an average of 8% per year over the past decade, including the last year of 5% growth. The economic fundamentals which made that possible are still intact. We are confident therefore that we can return to the growth path of 8%.

India’s Twelfth Five Year Plan outlines the many things we have to do to realise our full growth potential and to make that growth inclusive and sustainable. Our people have tasted the benefits of rapid growth and they will not settle for less. I want to assure you that our government is committed to take hard and difficult decisions in the long term interest of our economy.

In recent months, we have taken a number of steps to revive the economy. We have started to bring the fiscal deficit under control and also outlined a medium term path for fiscal consolidation. We have accelerated the implementation of large infrastructure projects by setting up special mechanisms to ensure that various regulatory clearances do not lead to delays. We have taken tangible steps to enhance incentives for investments. We have liberalised foreign investments in areas like multi-brand retail, power exchanges and civil aviation and further rationalisation and simplification is being planned. We have introduced further reforms in the financial markets. The Central Bank has indicated that it will start the process of expanding grant of new bank licenses.

As a result of these efforts, we expect that growth in 2013-14 will be much better than in the previous year, hopefully around 6% or so. We will do even better in 2014-15.

Our strategy for growth involves heavy investment in infrastructure. Lack of quality infrastructure is the single biggest obstacle to achieving higher levels of competitiveness in India. We have targeted an investment of around 1 trillion US dollars in infrastructure over the Twelfth Plan period, with half of it coming from the private sector and public-private-partnership.

India’s growth will provide expanding opportunities for foreign investment. We welcome foreign investment in the development of our economy and especially so in the critical infrastructure sector. I hope Japanese business will pick up a large share of the investment opportunities that India offers.

The scope for expanding economic co-operation between our countries is enormous. As Asian democracies, we have shared values. We have a very comfortable relationship between the two governments. There is also great public goodwill in both countries.

Given these commonalities, I believe we should have done much more than we have. I am told that Japanese companies rank India the most promising long term destination. However, India accounts for only 4% of total Japanese outward investment flow into Asia. I am sure you will agree that this percentage should be much higher. We on our part will work hard to turn promise into reality.

Let me touch on some areas where India and Japan are collaborating, and which can be the basis for expanded engagement.

The two ongoing flagship projects of the India Japan partnership are the Western Dedicated Rail Freight Corridor between Mumbai and Delhi and the associated Delhi Mumbai Industrial Corridor. Both are making good progress.

The Western Dedicated Freight Corridor between Delhi and Mumbai is scheduled for completion as planned in 2017. The procurement of civil works for Phase-I of the project is in an advanced stage and construction is to begin soon. The Engineering Service Consultants for Phase-II of the DFC project are already in position. I hope Japanese construction companies will participate strongly in both phases.

The Delhi-Mumbai Industrial Corridor project is also making good progress. It has moved from the planning to the implementation stage. I am happy to say that many of the recommendations you made have been implemented. JICA has committed 1.5 billion dollars for the project and JBIC has committed 3 billion dollars. JBIC has been given 26% equity in the DMIC Development Corporation, making it a global strategic partner in this iconic project. This is a project in which Prime Minister Abe has expressed great interest. I am confident it will develop futuristic, smart and sustainable industrial cities which will help address challenges of industrialisation, urbanisation and creation of job opportunities for our young population.

A number of priority projects for implementation from the first tranche of 4.5 billion US dollars provided by Japan for the project have been listed. We have resolved the issues of priority sector lending treatment to DMIC projects. Restrictions on foreign currency borrowings have been relaxed. I understand a few problems remain relating to long term swap arrangements. We are willing to consider innovative suggestions to resolve these problems. I am also happy to say that Japanese banks are being given licenses to open branches in metropolitan areas.

I understand that Japan has also offered financial and technical support for a Detailed Project Report for the Mumbai-Ahmedabad High Speed Railway route. This is an ambitious project and we will need to take a holistic view, based on our infrastructure needs, commercial viability, overall national priorities and the availability of financial resources. We are willing for Japan and India to co-finance a joint feasibility study on this.

The Chennai-Bengaluru Industrial Corridor is the base for many Japanese companies in India. It provides another focus for expanded Japanese industrial cooperation in future. I am pleased that the Preliminary Study for a Comprehensive Integrated Master Plan for this corridor has been completed, and the second phase of the project is about to commence.

The present bilateral trade of 18 billion US dollars does no justice to our potential. We must harness the full potential of our Comprehensive Economic Partnership Agreement to expand our trade and make it more broad-based and balanced. I hope that Japan would be more open and accessible for Indian companies in our areas of strength, such as pharmaceuticals and IT services. I am happy to say that the Social Security Agreement we concluded in November 2012 would be of great benefit to the growing number of Indian and Japanese professionals who live and work in each other’s country.

For the past few years, we have been engaged in an India-Japan Energy Dialogue to address some of our shared challenges in the area of energy security, including the issue of access to assured, reliable, secure and affordable supply of hydrocarbons. Japanese investments in India in the areas of solar power generation, clean coal technologies and upgrading of brown coal would be greatly welcome. We also look forward to Japanese involvement in the setting up of a gas hydrate R&D Centre.

One of the outcomes of the Energy Dialogue is that an exhibition on clean and renewable energy technology from Japan will be held in India in September this year. I hope this will be an opportunity for a large number of Japanese companies to display their products and technologies, and for Indian companies to build partnerships in this very important area.

India and Japan are both major importers of Liquified Natural Gas (LNG). I am happy that a study is being conducted by research institutions in India and Japan on LNG pricing for Asian importers and will be ready by the end of the year.

Skill development is a key national priority in India to power our industrial growth and to create opportunities and employment for India’s vast youth population. We look to closer partnership with Japan in setting up skill development centres in India, just as we are also collaborating on a new generation Indian Institute of Technology in Hyderabad.

The India-Japan partnership has never been more important to our two countries than it is today. It is rich with possibilities. A stronger commercial partnership between our two countries should be the corner stone of our relationship. It would not only contribute to each other’s economic growth, but will also be in the strategic interest of India and Japan. It will also contribute to wider and enduring prosperity in Asia and beyond.

I thank Nippon Keidanren for all that you have done in the past to further India Japan co-operation and I urge you to continue to make your contribution to this cause which is of mutual benefit for our two countries.