New Delhi - Arabstoday
India and Japan have agreed to a $15 billion currency swap line, a Japanese official in Delhi said on Wednesday, in a positive move for the troubled Indian rupee, Asia\'s worst performing currency this year. The two countries previously had a $3 billion swap arrangement that expired in June, said the official, speaking on condition of anonymity. The currency swaps are expected to support the Indian rupee as it continues to weaken against the greenback and Europe\'s sovereign debt crisis hits India\'s exports. The dollar-swap arrangement with India follows a similar agreement with South Korea in October. Japanese Prime Minister Yoshihiko Noda called for greater economic relations between two of Asia\'s largest economies on Tuesday, after India\'s trade minister said bilateral commerce would only reach $25 billion by 2014. India and Japan enjoy warm diplomatic ties, but at a paltry $15 billion, bilateral trade in 2010 was less than 5 percent of Japan\'s commerce with China. \"I believe that India\'s middle class will be the driving force if the manufacturing sector grows in India ... we can achieve greater trade volumes,\" Noda said at a meeting with business leaders in Delhi. Despite the low trade volume, Japanese companies are increasingly viewing India as a long-term play, with a large and youthful population set to drive growth in coming years. \"We can and should step up economic relations between the two countries,\" Noda said. Noda, Japan\'s sixth prime minister in seven years, said talks with India about sales of civil nuclear technology were \"in the right direction\". Japan is working closely with India to build a 1,483 km (920 mile) industrial corridor stretching from New Delhi to the financial hub of Mumbai in the west, that could help transform India\'s economic landscape and give its choked, teeming cities room to breathe. The corridor includes plans for 24 new cities and Indian Trade Minister Anand Sharma said overall investment would be more than $100 billion. Noda was on a one-day trip to India to boost financial cooperation between Asia\'s second and third largest economies, which are also working more closely on security issues along with the United States. Japanese corporations see India as a major opportunity as Japan\'s population ages and the fast growth seen by main regional partner China in recent decades slows, said Rajiv Biswas, IHS Global Insight\'s chief Asia economist. \"When you look at Japan\'s economy you are looking at demographic ageing, the population is declining, they don\'t have growth markets domestically,\" Biswas said. \"They are looking elsewhere to really get growth and India is the prime candidate.\" India wants to buy civil nuclear technology from Japan, but talks have been slow, with Japan wanting India to commit to a moratorium on nuclear weapons tests. \"The civil nuclear agreement is at the working level, discussions have proceeded in the right direction. I welcome this progress,\" Noda told reporters and said the issue was raised at a meeting with India\'s foreign minister. \"I hope it will be achieved,\" he said.