MODI, ABE AGREE TO 2+2 MEET

NEW DELHI: Prime Minister Narendra Modi and his Japanese counterpart, Shinzo Abe, agreed on Monday to deepen economic and defence ties, including the launch of a 2+2 dialogue of foreign and defence ministers, against the backdrop of China’s growing influence in the region.

During Modi’s two-day visit to Japan for the 13th India Japan annual summit, the two sides committed themselves to work for peace and stability of the Indo-Pacific, with Asean unity and centrality at the heart of the concept, and identified joint projects they could take up in Sri Lanka, Myanmar, Bangladesh and Africa.

The agreement, the finance ministry said, should “aid in bringing greater stability to foreign exchange and capital markets in India... This facility will enable the agreed amount of foreign capital being available to India for use as and when need arise.”

It also reflected the “depth of mutual trust and understanding, personal relationship and warmth” between Modi and Abe, the statement said.

The finance ministry also said the arrangement would help contain the current account deficit and rupee volatility. The rupee has been Asia’s worst performing currency this year, sliding against a strong and steady US dollar. The move came against the backdrop of foreign investors pulling out ~35,600 crore from the Indian capital market this month on concerns over rupee depreciation, a global trade war and rising crude prices.

“Today’s decision of entering into currency swap agreement is another important measure towards improving confidence in the Indian market. This facility will not only enable the agreed amount of capital being available to India… it would also help in bringing down the cost of capital for Indian entities while accessing the foreign capital market,” the statement said.