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India-Japan Economic Relations: Focus on the DMIC

March 25, 2011

Chairperson: Professor V P Dutt
Discussant: Professor Mohammad Badrul Alam

The broad theme of Dr. Rajaram Panda’s presentation was India-Japan economic relations, while the key focus was on the Delhi-Mumbai Industrial Corridor (DMIC). At the outset, he made it clear that the paper would not attempt to examine India-Japan economic relations in detail, but only examine the development of the Delhi-Mumbai Industrial Corridor project since it is “singularly going to dramatically transform the complexion of India-Japan economic ties in the coming two decades.”

The DMIC is a hugely ambitious development project on either side of the Dedicated Freight Corridor (DFC) of the Indian Ministry of Railways with a band of 150-200 kms. It was conceptualised as a global investment and manufacturing destination with emphasis on expanding the manufacturing and services base, and establish DMIC as the global manufacturing and trading hub. The project, according to Dr. Panda, “is going to catapult the bilateral relations to a level that will be the envy of other nations in Asia.”

Calling DMIC “a unique application of the Public Private Partnership approach to infrastructural development in India,” Dr Panda added that a holistic approach towards the bilateral relationship is required to reap the benefits of the partnership. In that regard, materialisation of CEPA (Comprehensive Economic Partnership Agreement) will strengthen the DMIC, and India-Japan ties as well.

Points of discussion

  • While considering the advantages of DMIC, the government cannot afford to overlook issues such as land acquisition, adequate safety measures, and capability to save the project in case of natural disasters.
  • A close examination of links between DMIC and CEPA should be included so that it helps to understand Japan’s rationale for extending support for the project.
  • Explaining the role of DMIC and its contribution to overall India-Japan economic relations would add value to the paper. More attention, therefore, should be given to the tangible benefits the project accrues to the India-Japan economic relationship.
  • Recent incidents in Japan have certainly affected the Japanese economy, and it will be worthwhile to analyse its impact on the ambitious DMIC project.

Report prepared by Rahul Mishra, Research Assistant, IDSA.