[Title] The 2nd Japan-India Business Leaders Forum Joint Report

Introduction

- Business communities around the world are facing increasingly bigger global challenges, such as the rising prices of resources, energy, and food, as well as climate change, and, particularly in recent years, financial uncertainty, and the slowdown of the global economy.

- Business leaders of the two countries share the perception regarding the severe situation of the current global economy, and agreed on the need to pursue mutually beneficial and sustainable economic growth through a broadening and deepening of the bilateral economic partnership. This will go beyond the mutual interests for both countries and should contribute to stabilising the global economy.

- Further, the role to be played by the Japan-India Business Leaders Forum is immense in developing the Japan-India economic relationship, which is among the richest in potential in Asia as well as in the world.

- Against this background, Japanese and Indian business leaders, following the first forum in August 2007, again held frank exchanges of views towards consolidating the economic relationship between Japan and India, and submit the following joint report to the heads of both governments.

1. Prospects for the Japan-India Economic Relationship

(1) Future Opportunities and Challenges Based on the Conclusion of a Japan-India EPA

- The economic relationship between Japan and India has grown much stronger in recent years. The bilateral trade volume in 2007 increased by approximately 20% over the previous year, and there was a six-fold increase in Japanese direct investment in India from 2005 to 2007. In this context, an Economic Partnership Agreement (EPA) is essential as an institutional infrastructure to further accelerate and consolidate these business activities.

- The Japanese and Indian business leaders welcome the steady progress being made towards concluding a Japan-India EPA, and expect the two governments to continuously make concerted efforts to realise a mutually beneficial and high-quality EPA in order to enhance its utilisation.

- The Japanese and Indian business leaders expect this comprehensive framework of economic partnership to lead to the further consolidation of the bilateral economic relationship. In addition, they affirmed the importance of continuous improvement in the investment and business climate in India even after the entry into force of the JIEPA to strengthen the competitiveness of India as an investment destination. This includes the simplification of the land condemnation system as well as the taxation system, the relaxation and abolition of FDI restrictions for retail trading, and the simplification of working visa procedures.

- From the viewpoint of expanding personnel exchange between the two countries, the Japanese and Indian business leaders welcome such recent tangible achievements as the doubling of air flights and collaboration in setting up a new Indian Institute of Technology (IIT). On the other hand, they share the perception that the movement of people will be further accelerated by overcoming the challenges in doing business in India, such as securing a sufficient number of hotel rooms at moderate prices.

(2) Japanese Cooperation Towards the Infrastructure Development in India

- Recognising the Delhi-Mumbai Industrial Corridor (DMIC) Project as indispensable to the further development of the Indian economy and industry, the Japanese and Indian business leaders welcome the establishment of its "Project Development Fund" and the launch of "Early-Bird Projects".

- They also welcome the establishment of the CII-JETRO portal, a web-based business-matching site to facilitate business interaction between Indian and Japanese enterprises as well as to provide information associated with the DMIC project.

- The Japanese side affirmed the importance of increased assistance to infrastructure projects through effective public-private partnerships between ODA and private investment, which will also be beneficial to the Multi-Modal Dedicated Freight Corridor Project. Since India requires huge and rapid development of infrastructure, such as an increase in the electric power supply, it is imperative to build an environment where the private sector can easily participate in effectively promoting PPPs.

2. Role of the Japanese and Indian Business Communities in Addressing the Global Challenges

(1) How to Address Climate Change/Energy Saving Issues

- In urgently addressing climate change issues that concern all humankind, it is imperative that all the major economies cooperate in a meaningful way, based on the principle of equity and in accordance with their common but differentiated responsibilities and capabilities while balancing the goals of economic development and environmental conservation.

- From this standpoint, the post-Kyoto international framework should be effective. The Japanese and Indian business leaders welcome the recent progress in developing the "Memorandum of Understanding between CII, Nippon Keidanren and the JCCI on Climate Change" and agreed to conduct policy dialogue on climate change.

- Technology development and technology transfer are essential to mitigate climate change and pursue economic development and environmental conservation in a balanced manner. The Japanese and Indian business leaders hope for a steady progress in the Japan-India Energy Dialogue and welcome the Japanese government's proposal to promote technology development through international partnership.

(2) How to Address Food Supply Issues

- The Japanese and Indian business leaders are concerned about the impact of the rising cost of resources and food on the global economy, and agreed to discuss how to assist developing countries, including India, in increasing food production utilising Japanese technology.

Conclusion

- The Japan-India Business Leaders Forum shares the perception that further efforts should be made to liberalise trade and investment and to build a global legal and institutional framework for that purpose, thereby strengthening the fundamentals of the global economy.

- In addition, the Japanese and Indian business leaders agreed to contribute to sustainable economic development of Asia and the world by taking a joint initiative towards building the CEPEA (ASEAN+6) that embraces the AJCEP and the ASEAN-India FTA.

Mukesh D. Ambani

Chairman & Managing Director,

Reliance Industries Limited.

Co-Chair, India-Japan Business Leaders Forum

Fujio Mitarai

Chairman, Nippon Keidanren

Chairman & CEO, Canon Inc.

Co-Chair, Japan-India Business Leaders Forum

Tokyo, Japan, 22 October 2008