Australia looks to boost trade with India after relations with China sour

Source: Financial Express, Sept 15, 2020

Australia’s escalating tensions with Beijing have shown up its reliance on China trade and propelled a push to increase links with Asia’s other giant economy, India. New enrollments of international students from India expanded 32% in 2019 from a year earlier and it’s the fastest growing major market for Australian services. India has overtaken China as the largest source of net migration to Australia, and its diaspora is the third largest Down Under, just behind China and the U.K.

India’s swelling population — set to overtake China’s in 2027 — suggests ongoing opportunities for Australia to diversify a trade portfolio that currently makes it the developed world’s most China-dependent economy. The need to switch things up has accelerated as ties sank to their lowest ebb in 30 years after Canberra’s calls for an international inquiry into Covid-19’s origins was taken by Beijing as a political attack, with China imposing barriers on barley, beef and wine from Down Under.

This has Australia looking to its democratic, cricket-loving ally to fill the void. Prime Minister Scott Morrison held a virtual summit with his Indian counterpart Narendra Modi in June and the two signed a defense agreement and upgraded ties to a Comprehensive Strategic Partnership. The trade ministers of Japan, India and Australia recently agreed to work toward achieving supply chain resilience in the Indo-Pacific region.

“We can sell India education, health care, and there’s potential in science and technology,” said Ian Hall, a professor of international relations at Griffith University in Queensland. “It’s much more the consumer market of India’s growing middle class than goods.”

Yet trade with India has its own challenges. Its government is wedded to economic nationalism, as showcased last year when it pulled out of the Regional Comprehensive Economic Partnership designed to free up trade.

Delhi wants to send lots of people to Australia on work visas and doesn’t want to reduce tariffs, according to former Australian Trade Minister Craig Emerson, who initiated the Australia-India free trade negotiations in 2011, resulting in a two-way trade around just one tenth of China-Australia shipments.

“India is highly concerned about its trade deficit,” said Lai-Ha Chan, a political scientist at the University of Technology in Sydney, who notes that after signing free trade agreements with South Korea and Japan, India’s trade deficit with those nations ballooned. “It would be very worried about Australian farm products, like dairy, harming Indian farmers.”

Australia’s most valuable export — iron ore — hasn’t been caught in China’s cross hairs yet, perhaps due to a lack of alternative suppliers. Yet Beijing appears to be giving itself greater flexibility, with Emerson noting that China is buying ore carriers that improve the economics of long-distance shipping from Brazil and purchasing Guinea mines.

“It’s entirely possible China, once it gets all three mineral provinces in a row — Guinea, Brazil and Australia — will play one off against the other to get a better price,” he said. “If you’re China, you’d say ‘where’s our vulnerability? Iron ore. So let’s diversify, let’s fix that.’ They may never need to activate it, but it’s there, it’s available.”

What Bloomberg’s Economists Say Australia’s services exports have been experiencing a quiet tectonic shift over the past 18 months. In education, growth in Indian enrollments has seen the number of Indian student visa holders eclipse Chinese students. While China’s dominance of Australia’s goods exports reflects commodities demand, in the employment-intensive services sector China’s importance has been challenged by a doubling of services exports to India over the past two years.

India, Russia explore partnership in agri, health, IT, Arctic and connectivity projects

Source: The Economic Times, Sept 06, 2020

India and Russia apart from traditional pillars of partnership are exploring potential areas of cooperation in including agriculture, coking coal, pharma & health sector, digital & IT sectors besides connectivity projects.

“Apart from the traditional pillars, we are working together to explore potential areas of cooperation in areas like agriculture, coking coal, pharma & health sector, digital & IT sectors, exchange of skilled manpower, cooperation between the regions including in the Far East, cooperation in the Arctic, logistics and connectivity. Our joint efforts towards gradual reduction of trade barriers and forging free trade agreements would have a multiplier effect in this direction,” suggested MoS External Affairs V Muraleedharan in his message for India-Russia Young Scholars International Conference 2020 held on Friday.

“Over these glorious 20 years of collaboration, our traditional pillars of cooperation – defence, energy, nuclear and space have done exceedingly well and are poised to do even better as we are looking forward to investments, partnerships and joint production in these areas,” he said, adding, “Our joint efforts have led to more than 40% increase in mutual trade with an upward trend in both imports & exports. This upward trajectory was challenged by COVID imposed restrictions, but we are seeing a gradual recovery.”

“Strengthening of our bilateral relations is a foreign policy priority for both our countries. We have great geopolitical complementarities and synergy on global issues,” the MoS said as he referred to India’s election to the non-permanent seat of UNSC that would provide Delhi and Moscow additional opportunities to coordinate efforts on most pressing issues of global concern.

“These years have also seen a great deal of domestic developments in both the countries. As the largest democracy, India has made its way to the fifth largest economy in the world. Today, we focus on taking India to new heights, to build a new India – an Atma-Nirbhar (self-reliant) India. India is making efforts to be self-reliant by re-orienting its terms of engagement to become part of global value chains – “Make in India” to “Make for the World”. We look forward to close cooperation with Russia as we make strides in our efforts,” the Minister said as he hinted at joint efforts under Make in India program.

“The world is changing in various ways, but one constant factor is the strength of our bilateral relations,” Muraleedharan emphasised.

Rajnath meets Russian counterpart, discusses ways to deepen defence ties

Source: Business Standard, Sept 04, 2020

Defence Minister Rajnath Singh on Thursday met his Russian counterpart General Sergey Shoigu in Moscow wherein the duo discussed about strengthening defence and strategic cooperation between both the two countries.

“Excellent meeting with the Russian Defence Minister General Sergey Shoigu in Moscow today. We talked about a wide range of issues, particularly how to deepen defence and strategic cooperation between both the countries,” said Rajnath Singh in a tweet.

Singh reached Moscow on Wednesday on a three-day visit to Russia to attend the combined meeting of Defence Ministers of Shanghai Cooperation Organisation (SCO).

Meanwhile, Defence Secretary Dr Ajay Kumar held a meeting with Dmitry Shugaev, Director, Federal Service of Military-Technical Cooperation, Russia.

According to a tweet by Russian Embassy in India, Russian Defence Minister Sergey Shoigu thanked Defence Minister of India Rajnath Singh for visiting Moscow in June and highlighted colossal potential of collaboration between Russia and India. “Military and military and technical cooperation were discussed.”

Minister of State for External Affairs, V Muraleedharan spoke at the India-Russia Young Scholars International e-Conference 2020 on the 20th anniversary of India-Russia Strategic Partnership.

“The time tested India-Russia relationship is based on unparalleled mutual trust and respect, common interests and concurrence on fundamental issues of global affairs,” he said in a tweet.

“The dynamism of the India-Russia relationship has propelled the bilateral cooperation beyond the traditional areas to almost all sectors of the economy benefitting the people of both countries. Our trade has also increased by 40,” he added.

India seeks stronger rules of origin as it urges ASEAN for FTA review

Source: Business Standard, Aug 31, 2020

New Delhi: India has pitched for stronger provisions in the rules of origin, removal of non-tariff barriers and better market access in the existing existing Free-Trade agreement (FTA) with the the Association of Southeast Asian Nations (ASEAN), arguing the changes should kick off sooner rather than later.

At the 17th Asean-India Economic Ministers Consultations held virtually on Saturday, Commerce and Industry Minister Piyush Goyal reiterated India’s consistent position that the review of the current FTA, in effect since 2010 has, has been inordinately delayed.

Goyal batted for closer engagement towards finalisation of the scoping exercise, before the ASEAN-India Leaders’ Summit scheduled in November 2020, and to start the full review before the end of this year. He said the review should make the Free Trade Agreement more user-friendly, simple, and trade facilitative for businesses.

Now, all sides have decided to direct senior officials to, “start the discussions to determine the scope of the review at the earliest”, a statement by the government said on Sunday. “The review will make the agreement modern with contemporary trade facilitative practices, and streamlined customs and regulatory procedures,” it added.

The Ministers also reaffirmed their commitment to take collective actions in mitigating the economic impact of the pandemic and resolved to ensure macroeconomic and financial stability. Crucially, the nations pushed for strengthening supply chain connectivity, particularly the unimpeded flow of essential goods and medicines in the region, in compliance with World Trade Organization rules.

Long time coming
The FTA with the 10-nation Asean bloc (Indonesia, Thailand, Singapore, Malaysia, The Philippines, Vietnam, Myanmar, Cambodia, Brunei and Laos) came into effect on January 1, 2010. Last year, in September, both sides agreed to review the agreement amid criticism from the domestic industry that the deal was helping imports rise much faster than exports.

Trade with Asean, which had consistently seen the best growth for Indian exports sank 10 per cent in 2019-20. Exports to the bloc stood at $31.54 billion, down by more than 15 per cent from $37.4 billion in 2018-19. Imports however remained much higher at $55.36 billion, albeit reducing from $ 59.32 billion, a 6.6 per cent fall. Imports from the region had recently been on the upswing since 2018-19 due to Chinese shipments being moved through the region, particularly Vietnam, government estimates say. But the latest pandemic and India’s skirmishes with China along the Ladakh border has now restricted the flow.

“The government has critically analysed a wide number of tariff lines after consulting with industry bodies, and prepared its future vision of the deal may be asked to provide their input. All that is left now is to negotiate our position with the Asean,” a senior government official said.

India believes the deal has been instrumental in connecting Indian businesses to their South East Asian counterparts and domestic industry needs to better utilise the concessionary rates available to them. But the cost of such access has also been heavy. According to a study by the NITI Aayog, the utilisation rate of regional trade agreements (RTAs) by Indian exporters is very low (between 5 per cent and 25 per cent). Sectors where trade deficit has worsened account for 75 per cent of India’s exports to Asean, while trade surplus sectors have also shown only marginal improvement, it had added.

Also on Saturday, industry body Ficci, as the Indian secretariat of ASEAN India Business Council (AIBC) recommended an open approach to collaborate and increasingly operate in the services sector, a core component of economies in the region which has been hit hard by the pandemic. This comes in the backdrop of India-ASEAN trade target of US$ 200 bn trade by 2022, which now looks difficult, Ficci said. recommended to the ministers that ASEAN should consider introducing business travel cards with at least 90 days validity. Sangita Reddy, Co-Chair AIBC (India) said for special incentives for Indian pharmaceutical companies should be introduced for setting up plants in dedicated ASEAN zones.

Indo-Japan Mutual Logistics Pact can enable Navies access to Djibouti & Andamans

Source: The Economic Times, Aug 27, 2020

NEW DELHI: The Acquisition and Cross-Servicing Agreement (ACSA) expected to be concluded at next month’s annual summit between PM Narendra Modi and his Japanese counterpart Shinzo Abe would give the Indian Navy access to the Japanese military base in Djibouti and the Japanese Navy access to Andaman and Nicobar Islands.

The ACSA (commonly referred to as Mutual Logistics Services Pact) would permit the Indian Navy access to a Japanese base in Djibouti. The Japan Maritime Self Defence Force (JSDF) would be permitted to use India’s military installations in the Andaman and Nicobar Islands, ET has reliably gathered. India currently has such pacts with the US, Australia, France and is likely to sign one with Russia later this year.

Delhi has since long been keen to get a presence in Djibouti as part of its Indian Ocean outreach.

Djibouti, wedged between the Gulf of Aden and the Red Sea, is a natural gatekeeper to a vital and extremely bustling sea-lane. The base in Djibouti is the JSDF’s first full-scale, long term overseas base.

Similarly, Andaman and Nicobar is critical for the Japanese Navy in the Bay of Bengal region. The ACSA aims to expand Indo-Japanese strategic partnership amid an ambitious China whose aggression has unnerved many countries in Asia.

Indo-Japanese defence ties have been growing over the past few years. At the end of the bilateral 2018 summit meeting in Tokyo attended by the two leaders, both countries had agreed to begin formal negotiations on ACSA.
“The two leaders welcomed the joint exercise between each of the three services and the commencement of negotiations on the ACSA, which will enhance the strategic depth of bilateral security and defence cooperation,” according to the joint statement issued after the 2018 summit.

The joint statement said, “recognising that enhanced exchanges in expanding maritime domain awareness (MDA) in the Indo-Pacific region contributes to regional peace and stability, they welcomed the signing of the Implementing Arrangement for deeper cooperation between the Indian Navy and the Japan Maritime Self-Defence Force.”

ACSA will require the armed forces of India and Japan to help each other with logistic support, including food, water, billet, transport, petroleum, oils, lubricants, clothing, communications, medical services, base support, storage, use of facilities, training services, spare parts, repair and maintenance and airport and seaport services.

The Summit is being planned in the backdrop of the Japanese Defence White Paper 2020 (JDWP) released on July 14, which had more criticism of China, than before. It is the first time that a JDWP has characterised China’s actions around the Senkaku Islands as “relentlessly seeking to affect Japan’s control over them at the time of the Covid crisis”.

Widening the scope of Indo-Pacific partnership, including third country projects, are also on the cards, ET has learnt. Japan has decided to increase its investments in two of India’s key neighbours –– Bangladesh and Myanmar.

Increase in Japanese FDI into India, including Japanese companies planning to shift to India from China, and incentives for these business enterprises will be discussed by the two leaders at the Summit, sources informed.

Simultaneously, India and Japan will work to have technology companies build platforms that help emerging nations put government services online, taking ideas from Delhi’s all-in-one digital infrastructure which allows access to various public services.

Abe was scheduled to travel last December for the annual summit but had to postpone it due to protests in Guwahati. He had planned to visit Delhi in April which was postponed due to Covid.

India-Vietnam agree to strengthen Indo-Pacific partnership; explore closer co-op in nuclear energy & space

Source: The Economic Times, Aug 25, 2020

New Delhi: India and its key SE Asian partner Vietnam on Tuesday decided to explore closer cooperation in emerging areas — civil nuclear energy, space, marine sciences and new technologies and decided to expand their Indo-Pacific partnership.

India and Vietnam agreed to enhance their bilateral cooperation in line with India’s Indo-Pacific Oceans Initiative (IPOI) and the ASEAN’s Outlook on Indo-Pacific to achieve shared security, prosperity and growth for all in the region. India invited Vietnam to collaborate on one of the seven pillars of the IPOI. This is significant in the backdrop of Chinese aggression in the Indo-Pacific region including South China Sea region.

The outcomes were result of the 17th Meeting of the India-Vietnam Joint Commission on Trade, Economic, Scientific and Technological Cooperation co-chaired by Dr. S. Jaishankar and Pham Binh Minh, Deputy Prime Minister and Foreign Minister of Vietnam. The meet was held via video-conference on Tuesday.

On the occasion the two sides signed MoU for “cooperation between Sushma Swaraj Institute of Foreign Service (SSIFS), New Delhi and Diplomatic Academy of Vietnam, Hanoi” and “MoU between National Maritime Foundation, New Delhi and Scientific Research Institute of Sea and Islands, Hanoi” were also signed on the margins of the Joint Commission Meeting.

During the meeting, both sides reviewed the recent developments in India-Vietnam Comprehensive Strategic Partnership and discussed the future trajectory of their wide-ranging engagement. They agreed to add new momentum to the economic and defence engagement between the two countries and to explore closer cooperation in emerging areas such as civil nuclear energy, space, marine sciences and new technologies, according to a MEA statement.

The co-chairs exchanged views on regional and international issues of mutual interest, especially in the context of the outbreak of COVID-19 pandemic. Jaishankar underlined Prime Minister’s vision of Atmanirbhar Bharat for enhancing resilience through self-reliance and human-centric globalization as the basis for India’s economic revival. He invited Vietnam to take advantage of India’s new economic capacities and demands, the MEA statement informed.
Jaishankar reaffirmed India’s development and capacity building assistance to Vietnam through initiatives such as Quick Impact Projects(QIP), ITEC and e-ITEC initiatives, PhD fellowships, as well as projects in water resource management in Vietnam’s Mekong Delta region, SDGs, digital connectivity and heritage conservation. 12 QIPs for implementation in Vietnam have been approved by the Government of India, including 7 QIPs in water resource management in Vietnam’s Mekong Delta Region and 5 QIPs related to construction of educational infrastructure in Vietnam.

Based on their strong convergence of views on many global and regional issues, both sides agreed to coordinate closely at multilateral forums, including at the UN Security Council, where both India and Vietnam will serve concurrently as non-permanent members in 2021. They also agreed to step up cooperation and coordination at important regional forums under the ASEAN framework.

Jaishankar expressed India’s full support to Vietnam’s chairmanship of ASEAN this year and appreciated the positive leadership provided by Vietnam to ASEAN in a year when the world is faced with the COVID-19 pandemic.

India, Nepal to expand energy cooperation, explore new pipeline

Source: Business Standard, Aug 24, 2020

New Delhi: The atmosphere of mistrust between India and Nepal over border issues has not impacted energy sector cooperation between the two countries as both have decided to explore the possibility of another petroleum pipeline to feed the growing fuel demand in the Himalayan nation.

The existing Motihari-Amlekhgunj petroleum products pipeline has become the lifeline for Nepal for meeting its energy needs. The two sides are now exploring whether state-owned Indian Oil Corporation could look at another product pipeline running into the northern and eastern parts of the country.

The discussion on extending the network of petroleum pipeline and setting up new pipelines was discussed during the meeting of a joint working group early this month. The meeting organised through video conferencing was attended by top government officials from the Indian side including representatives from IndianOil, GAIL, and HPCL.

The Nepalese side was represented by the Ministries of Finance and Foreign Affairs of Nepal and Nepal Oil Corporation (NOC).

“A team of officials would soon visit Nepal to explore the possible routes for a new product pipeline. This would be followed by establishing feasibility studies before investment decisions are worked out. There is potential for expanding the pipeline network that would bring a lot of savings for the Himalayan country,” said an official of a public sector oil company asking not to be named.

The existing pipeline between the two countries was inaugurated in September last year by the Prime Ministers of India and Nepal. The 69-km pipeline, which starts from Motihari in India and ends at Amlekhgunj in Nepal, is the first of its kind in south Asia.

Indian Oil Corporation Ltd, India’s largest refiner, built the pipeline, with an investment of over Rs 324 crore, in collaboration with Nepal Oil Corporation Ltd, fulfilling the commitment made under an MoU signed in August 2014.

Before the opening of the pipeline, petroleum products were being transported from India to Nepal by tankers/trucks at 13 pick-up points (7 for products and 6 for LPG). The Raxaul-Birgunj was the most important trade point between the two countries but the pipeline has reduced the movement of tanker trucks from these points to consumption centres in Nepal. The JWG also discussed a larger role for India in building oil production storage capacities in Nepal. It is envisaged that Indian and Nepalese companies may cooperate towards this end as well.

India, Bangladesh explore new areas of cooperation in advanced tech, AI, ecology & vaccines

Source: The Economic Times, Aug 19, 2020

New Delhi: India and Bangladesh have decided to explore new areas of cooperation including latest technologies, disaster managementartificial intelligenceecology and conservation and greater youth to youth engagement to give further momentum to their burgeoning ties. In keeping with India’s Neighbourhood First Policy Bangladesh will also be accorded priority in the areas of vaccines and therapeutics.

These among other issues of mutual benefit were discussed when Foreign Secretary Harsh Vardhan Shringla, called on the Prime Minister of Bangladesh Sheikh Hasina in Dhaka on Monday.

The visit of Foreign Secretary to Dhaka occurred in the context of developing a roadmap for jointly commemorating the 100th anniversary of Bangabandhu Sheikh Mujibur Rahman and the 50th anniversary of the establishment of diplomatic ties between India and Bangladesh and the liberation of Bangladesh.

Bangladesh observes the month of mourning in August in the memory of Bangabandhu whose values and life are equally regarded and cherished in India as in Bangladesh.

In this historic year of Mujib Barsho, India will be issuing a commemorative stamp as their tribute to Bangabandhu . Both sides will also be holding a series of other events celebrating the life and values of Sheikh Mujib. The next year is equally special as both sides will honour their martyrs who had sacrificed their lives for a noble and a just cause.

The leadership on the two sides have remained in regular touch through phone calls and exchanges, which has helped ensure that the cooperation even during the Covid times has continued uninterrupted. To sustain this momentum, the two Foreign Ministers will also be holding their next joint consultative commission meeting, ET has learnt.

Shringla conveyed warm greetings to the Prime Minister from PM Narendra Modi. Prime Minister Modi was scheduled to visit Dhaka to attend the inaugural Mujib Borsho celebrations earlier in March this year. With his visit deferred due to the Covid pandemic, PM Modi had shared a video message paying his tributes to Bangabandhu on the occasion.

The Foreign Secretary briefed Hasina on India’s ongoing efforts in the wake of COVID-19. On vaccine development, he informed that testing for the three vaccines was in different stages and that India would be launching a massive production exercise once a go-ahead was received from the scientific community, highly placed sources told ET.

He informed Hasina that India had already drawn up an outline to ramp up the production of the vaccines and to make it available to each and every person in the shortest possible time. India had provided timely Covid related assistance to Bangladesh including providing testing kits, medicines, surgical gloves and other equipment. India has also been conducting training for the Bangladeshi medical professionals in Bangla language.

India’s ongoing projects in Bangladesh are aimed at improving infrastructure in sectors like ports, power, railways and roads making the investment environment all the more conductive in Bangladesh. India is also developing Indian Economic Zones in Mirasarai and Mongla Next year as both countries celebrate the 50th anniversary of diplomatic ties, some strategic projects will get inaugurated like the Akhaura -Agartala rail link and Maitree power project, sources told ET.

India through its High Impact Community Development Projects ( HICDP) has also undertaken over 40 social economic projects in areas relating to sanitation, waste management, restoration, health etc. under grant-in-aid.

On the trade front, Bangladesh’s exports to India have crossed 1 billion making India the second country in Asia after Japan where its exports have crossed a billion mark. Currently, India trades more with Bangladesh than any other South Asian neighbour. Contours of a comprehensive economic partnership agreement are being discussed between the two sides, sources informed.

Cooperation in security has remained a vital component of bilateral engagement. Both sides have a robust ongoing cooperation in security matters and counter terrorism and have also intensified their exchanges and sharing of information in the area in the area of anti-radicalization and counterterrorism.

There has also been good cooperation in power and energy. India’s supply of 1160 MW of power at reasonable cost is over 9 % of the maximum power demand in Bangladesh. India is also constructing a 1320 MW powerplant plant in Khulna under its concessional financing scheme.

The cooperation in the area of nuclear energy has also seen significant progress. India is offering capacity building programmes or the Bangladesh nuclear scientists.

In view of the close people to people ties, both sides are in active discussion on commencing air bubble flights, sources informed. This will help the business and the student community on the two sides and will also facilitate the travel of people seeking medical assistance. Last year alone , 1.6 million visas were issued to the Bangladeshi nationals, making our visa operations largest in Bangladesh .

Both sides recognize that increasing connectivity through air, water, rail, road offers mutually beneficial opportunities for augmenting economic cooperation between Bangladesh and India particularly with the North Eastern States of India .Connectivity received a big boost when for the first time ever Indian cargo from Kolkata to Agartala moved via the Chattogram Port. India also recently handed over 10 locomotives to Bangladesh to strengthen its freight and passenger connectivity.

The signing of a second addendum to the Protocol on Inland Water Trade& and Transit has contributed to the future strengthening of the regional connectivity comprising hinterland states of East India with Bangladesh and the North East India. The commencement of parcel and container train services between the two countries have helped in a cheaper, more efficient and friendly mode of trade between the two sides.

India-Japan-Australia supply chain in the works to counter China

Source: The Economic Times, Aug 19, 2020

NEW DELHI: India, Japan and Australia have begun discussions on launching a trilateral Supply Chain Resilience Initiative (SCRI) to reduce dependency on China, necessitated by Beijing’s aggressive political and military behaviour.

The initiative, first proposed by Japan, is now taking shape, ET has learnt. Dates are being worked out to hold the first meeting of the commerce and trade ministers of the three countries by next week.

Japan through its Ministry of Economy, Trade and Industry approached India recently and pressed on the urgency to take the initiative forward, according to people in the know. Tokyo was in favour of launching SCRI by November, sources said. Read the rest of this entry »

Japan to provide financial assistance to 10 Japan-India tech tie-ups

Source: The Hindu Business Line, Aug 12, 2020

In a move to step up Indo-Japanese digital partnership, the Japanese government has decided to grant financial assistance to around 10 of its companies, including automobile major Suzuki Motor Corp and optical device manufacturer Olympus Corp, for investing in innovative solutions in India in tie-ups with Indian IT firms, an official has said.

The subsidy totalling around ¥ 100 million (about $1 million), is part of Japan’s Covid-19 economic recovery measure, an official told BusinessLine.

The collaborations that have been approved are in areas ranging from health and transport to agriculture and equipment, most of them aimed at enhancing the welfare of common people and serve the social agenda, the official said.

“Right now it is too early to disclose the names of the companies involved but the project plans are all ready which was a necessary condition to apply to this subsidy scheme,” the official.

Two of the Japanese companies involved are Suzuki Motor and Olympus while one of the Indian companies is IT major HCL, another source said.

The projects short-listed for financial assistance all use technology to solve daily problems being faced by people.

Three of the collaborations are in the area of health. One is for development of an online ‘Doctor to Doctor’ communication platform. A medical equipment will be developed to detect digestive system disorder at lower cost by utilising cloud and Artificial Intelligence (AI) system.

The second collaboration on health is between an Indian textile company and a Japanese IoT (internet of things) company that will develop a wearable device and an app to enable a remote health monitoring solution to hospitals taking care of Covid-19 patients.

Another collaboration is in the area of mental health where technology will be used for analysing voices and for tele-diagnosis to provide psychiatric care, the official said.

To provide safe and cheap transportation in rural areas, a collaboration between an Indian IT company and a Japanese auto company to develop a smart phone app matching passengers and buses, will also be financed.

The other collaborations short-listed for financing include analysing agriculture and satellite image, providing digital advertisement for three-wheelers, utilising drone technology, using robotics for photovoltaic cleaning, working on surveillance camera using AI analysis and aggregating the demand of machineries for prototypes.

“Although, as of now, it is a Japanese government initiative, but, case by case, the Indian government’s support too is likely to be sought. For example, when a new service or product is successfully developed, the companies may need to get approval from Central government or related organisations,” the official said.

In 2018, India and Japan had established a digital partnership, and the recent initiative of Japan is being seen as a move to strengthen it.

Japan was the fourth largest investor in India, after Mauritius, Singapore and The Netherlands, accounting for cumulative Foreign Direct Investments (FDI) of $33.5 billion in 2000-20 period accounting for 7.2 per cent of India’s total inflows.