Bangalore: The Japanese government would announce early next month a fresh aid package to India, first after Tokyo discontinued its measures towards this country taken in the wake of May, 1998 nuclear tests, according to Akira Hayashi, Japanese Ambassador to India.

"It's a new beginning after lifting of the measures (on October 26 last year)," Hayashi told reporters on December 19.

He noted that Japanese government did extend 'official development assistance' (ODA) to India after the nuclear tests but it was conditional and it was only confined to basic human needs and continuation of loans for projects started earlier.

"(Now) without constraints we will be able to pledge a new aid package (under ODA) to India," he said. "I hope that the amount will be substantially increased." Earlier, addressing the 31st Joint Meeting of India-Japan Business Co-operation Committee (IJBCC), Hayashi said the cumulative amount of Japan's ODA to India has reached $ 7,395.87 million (Rs 3,233.79 billion) as of the end of 2000. Pointing out that Japan has been by far the largest bilateral donor to India since 1986, he said the fresh aid package to India would include Delhi Metro Project, Yamuna Action Plan and power sector projects.

The Japanese government, he said, has now started to work with the Indian government to tackle the challenge of cleaning the river Ganga.

Speaking on foreign direct investment (FDI), Hayashi said according to the 'Toyo Keizai Sinpo', a Japanese economic journal, the number of Japanese firms, which have established their offices/factories in India, is 176 in 2002, while in China the corresponding figure is 2,525.

Similarly, actual FDI flows to India from Japan was $ 14.5 billion in 2001, while Japanese FDI flows to China was $ 144 billion, he said.

To promote more FDI, India need to implement the prescriptions of 'Report of the Steering Group on FDI,' chaired by Planning Commission member N K Singh, Hayashi pointed out.

The Envoy later told reporters that poor infrastructure and a 'kind of red-tapism' by government is hampering Japanese investment into India. "Frequent policy changes in taxation matters are rather disturbing for Japanese companies and investors," he commented.

Meanwhile, chairman of the Japan-India Business Cooperation Committee (JIBCC) Nobuhiko Kawamoto said Indian software engineers are underpinning the global Information Technology (IT) revolution.

"Bangalore leads the way in India's IT development, and is a name already known to people around the world as symbolic of that development," said Kawamoto, former chief executive officer (CEO) of Honda Motor Company Ltd and currently its director and advisor.

But he expressed concern that although India's total software exports grew 4.2 times between 1997 and 2001, software exports to Japan grew only 3.6 times.

In the last two or three years, penetration into the Japanese market, which has the world's second largest level of demand by information-service industries, is inadequate, he said.

PTI