MUMBAI - The Indian government has
confirmed a deal for a US$50 billion industrial
corridor, to be built along the lines of the
successful Tokyo-Osaka industrial belt in Japan.
To be established with Japan's participation, the
industrial corridor will be situated beside the
proposed Mumbai-Delhi dedicated rail freight
corridor.
India's Commerce Ministry
expects the Mumbai-Delhi industrial corridor to
deliver, within five years of its completion, a 15%
increase in employment, a 28%
increase in industrial output and a 38% increase
in exports.
The corridor is based on the
Tokyo-Osaka industrial corridor, which has been
operating successfully for 30 years and which is
said to have contributed two-thirds of Japan's
gross domestic product.
The Delhi-Mumbai
industrial corridor will cover an area housing 180
million people. To put the size of the project in
perspective, India's entire foreign direct
investment (FDI) in the current fiscal year is
expected to be about $25 billion, according to
Indian Commerce Minister Kamal Nath.
Japan
agreed to partner the corridor project during
Indian Prime Minister Manmohan Singh's visit to
Tokyo last December. Besides the gift of a grant,
Japan will also invest heavily in the project.
Ajay Dua, secretary of the Department of
Industrial Policy and Promotion (DIPP), said in a
presentation organized by the Confederation of
Indian Industry in New Delhi that the industrial
corridor will have three ports, six airports and a
4,000 megawatt power plant to serve it.
The DIPP, under the Ministry of Commerce
and Industry, facilitates investment and
technology flows and monitors industrial
development in India. The department is also
responsible for facilitating and increasing FDI
inflows to the country.
With the new
industrial corridor, Japan re-affirmed its growing
status as one of India's major business partners.
The DIPP in fact has a separate branch for
Japanese investors.
According to DIPP
figures, FDI inflows from Japan (as of November
30, 2006) were $46.13 billion, ranking fourth in
overall FDI inflows. The $50 billion project is
expected to further boost economic ties between
India and Japan, which is already the largest
contributor of overseas development assistance to
the South Asian country.
Japan has also
expressed a commitment to develop India's
infrastructure by way of investing and helping to
build roads, ports and industrial parks within the
corridor. A high-powered Japanese business
delegation is also expected to visit India in July
to look for more such opportunities.
The
industrial corridor will be built as a
public-private partnership, which is the norm now
in mega infrastructure projects in India. With an
initial investment of $2 billion from the Indian
and the Japanese governments, the industrial
corridor will emerge within 150km of the 1,483
railway freight corridor that will cover six
Indian states of Delhi (22km), Maharashtra
(148km), Gujarat (565km), Haryana (148km), Uttar
Pradesh (22km) and Rajasthan (578km), states that
include the most populated and most industrialized
regions in the country.
For better policy
cohesion, the DIPP will also review the fiscal and
industrial policies of the six states, as compared
to central government policies.
The
Delhi-Mumbai Industrial Corridor Development
Corporation will create the corridor by floating
special-purpose vehicles to implement the
component projects. The concept design could be
finalized this summer, and the corridor project is
expected to be completed in 2015.
After
the raging controversies over special economic
zones, Nath hastily pointed out that the
government will not be responsible for acquiring
any land for the corridor. "The companies [that]
come to set up units in the corridor will have to
look for land and procure it themselves," Nath
told the media. "But land should not be a problem
because the corridor is spread over a large area.
Some Japanese companies are already interested in
it."
The corridor could serve as a
prototype for similar projects in the country. The
Telegraph, a Kolkata-based newspaper, reported
that the central government will also develop the
Delhi-Kolkata freight route into an industrial
corridor. Initial studies on the proposed eastern
India corridor will begin in early 2008.
The new Delhi-Kolkata freight corridor,
with a railway and highway link, will link New
Delhi to Bengal via Uttar Pradesh and is expected
to cost about $4.7 billion.
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