JAPAN INTO tural demonstration
AFFLUENCE-
farms. According to an agreement signed in March 1962, Japan will help establish marine product processing centre at Mangalore on the
west coast.
a
as-
Financial Aid Apart from reparations, it was in India that Japan pioneered her overseas sistance
programme on an important scale. In February 1958 Japan and India signed an agreement for a credfit of US$50 million through the Export-Import Bank of Japan. This credit was for the im port of capital goods like equipment for power projects, tractors, tankers, radio transmitters, ships, paper machinery and mining machinery.
In August 1958 Japan provided another US$10 million credit for the purchase of generators, textile machinery and rayon plant. In March 1959 Japan an- nounced a credit of $10 million for equipment for power projects, a wrist watch factory in Bangalore and radio transmitters. This credit was later in- creased to $21 million.
most directly from Japan's provision of assistance and credit. The years 1957 and 1961 were good ones for Indian exports to Japan, but although Japanese imports have been increasing as a result of liberalisation of trade, India has been un- able to profit from this development. Indian exports to Japan fell in 1962- 63.
Japan is the best customer for Indian iron ore, about 60% of India's eight million
(US$ '000)
TOTAL
FAR EASTERN ECONOMIC REVI
Trading Corporation will buy from Japan about 85,000 tons of steel products. Un- der another contract, Japan is to supply more than 28,000 tons of rolled steel by the end of 1963.
Between 1959 and 1963 contracts were signed for the supply of 46 AC electric -III-Japan's Imports from India-
Of which:
taking
Raw materials
Cotton mill waste Salt
Iron ore
Iron & steel scrap Non-ferrous ores Mica
Manganese orc Coal Leather
1957 1958 1959 1960 1961 1962
104,999 74,397 92,259 99,474 110,900 93,105
20,897 19,715 21,198 12,872 30,164 23,834
6,663 6,130 2,776 5,709 1,497 2,599 3,802 1,488 41,760 29,982 30,926 40,503 30,415 37,404 7,656 3,280 11,296 15,255 18,453 6,484 4,013 7,145 7,240 9,871 6,739 2,273 2,947 4,404 3,444 4,843
4,042
1,664
389
tons Within
of exports. the next two years Indian ore exports to Japan may increase to over seven million tons a year.
A two-year contract between Japanese
395 199 339 271 1,535 1,899 2,110 496
Source: Customs Bureau, Japanese Ministry of Finance.
steel firms and the Indian State Trading Corporation was signed in May 1963. Under this the Japanese will buy 4.45 million tons of iron ore and the State
locomotives by Japanese firms. Under another contract India is to buy by March 1965 45 more Japanese electric locomo- tives.
These funds, compositely termed the Help for Ceylon Industry
first Yen credit, came in during India's Second Plan which ended in March 1961. For the first two years of India's Third Plan, Japan extended 3 second Yen credit of US$95 million. Japan is a mem- ber of the "club" of rich nations formed under the auspices of the World Bank. This year Japan announced a third Yen credit amounting to $65 million, In addition, Japan has offered $21 million for import of machinery for the Bailadila iron ore project and a suppliers' credit of US$8 million for the Kiriburn ore project. Both these are
raw material sources for Japan.
Trade Partner
Japan is India's third largest trade partner, after the United States and Bri- tain, but the rate of increase in Indo- Soviet trade looks like displacing Japan from this position in favour of Russia. Indo-Japanese trade is regulated on the basis of a trade agreement signed in 1958, which provides for favoured treat- ment on both sides.
Exports from Japan to India rose to US$113 million in 1957 but in the next two years Indian imports from Japan showed a big fall, largely owing to Indian import restrictions. In 1960 Japanese exports to India recovered to US$109 million and reached a record figure of US$119 million in 1962. The recovery in Japanks@gepaß444erived al-
From H. E. R. Abayasekara, Colombo
THE FEW YEARS up to 1962 saw a more or less steady increase in Japan's share of the Ceylon market. Although the total value of imports into Ceylon declined in 1962 by nearly Rs 350m.com- pared with 1959, purchases from Japan increased in value and consequently as a proportion of total imports-from Rs 147.4m. to Rs 181.4m. and from 7.3% to 10,9%.
There was a setback however in the
-Ceylon-Japan Trade.
(Rs million)
Imports from Imports from
all countries Japan
%
1962 1961
1,660
181
10.9
1,703
157
9.2
1960
1,960
165
8.4
1959
2,005
147
7.3
1958
1,717
156
9.1
Jan./June
1963
682
46
6.7
Exports to
Exports to
all countries
Japan
1962
1,766
35
1961
1,680
40
2.4
1960
1,775
55
3.1
1959
1,692
42
2.4
1958
1,651
37
2.2
Jan./June 1963
851
20
2.3
Source: Ceylon Customs Returns.
%
2
2.0
first half of 1963 when, under the influence of rigorous import curbs, the inflow of goods from Japan declined to 6.7% of total imports. The
cut of 33-1/3% in textile imports announced in the Budget of July 1962, so as to save foreign exchange, has been hard on Japan which is chief supplier of textiles to Ceylon.
Other imports from Japan that have declined include fish products, tea chests and plates and sheets to pack Ceylon produce for export and netting. Imports which have increased include dried chillies, sulphate of ammonia, machinery and appliances and rubber tyres for motor vehicles.
Balance of Trade
The balance of trade continues heavily in Japan's favour. In the last five years, the peak year for Ceylonese exports to Japan was 1960 when they totalled Rs 55.1m (3.1% of all exports) while the lowest figure was recorded in 1962, when they declined to Rs 35.4m., or 2% of all exports. For the first half of 1963, exports amounted to Rs 19.7m. or 2.3% of exports to all countries.
Normally, the chief export to Japan is rubber, followed by tea and coconut coir.
October 31, 1963
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