Excerpt from - Heather Timmons, International Herald Tribune, Aug 20, 2007

NEW DELHI: India and Japan, scrambling to build closer economic ties as China's might grows, are expected to announce a spate of partnerships and new business initiatives as Prime Minister Shinzo Abe of Japan visits India this week.

While Japan is a large lender to India, until now it has not been a major investor or partner in business. Japan's trade with India was about $6.5 billion in 2006, the Indian government said this week, about 4 percent of Japan's trade with China. 

 But the two governments have made increasing political overtures to each other in recent years as China has become a competitive threat. "The key issue facing the whole region is how to accommodate the rise of China," said Suman Bery, the director general of the National Council of Applied Economic Research, a New Delhi research group.

Leading the agenda will be a $100 billion infrastructure project, the most ambitious ever attempted in India to date. The Indian and Japanese governments are planning a sophisticated manufacturing and freight corridor between India's capital city, New Delhi, and its port and financial center, Mumbai called DMIC (The Delhi-Mumbai Industrial Corridor). The nearly 1,500-kilometer, or 930-mile, corridor will include a high-speed freight line and nine 200-square-kilometer, or 77-square-mile, investment regions dedicated to industries like chemicals and engineering, as well three ports and six airports. Indian officials said they expected that Japan's public and private sector could contribute as much as one-third of the cost of the project in investment, on the expectation that the overall project would turn a profit many years in the future.