New Delhi: Japan, which is keen to step up economic relations with India, today (Aug 13, 2004) called for removing 'red-tape' and simplifying licensing procedures to make the country an attractive investment destination.

"It is my understanding that currently India is not a single economic space. Every step towards that goal will make India that much more attractive as an investment candidate," Japanese Foreign Affairs Minister Yoriko Kawaguchi said at a meeting organised by industry chamber FICCI (Federation of Indian Chambers of Commerce and Industry) in New Delhi.

She said, "Japan is watching with keen interest the economic policies of the new Indian Government" on improved infrastructure, labour and tax law reforms and promotion of privatisation.

"Success or failure in this challenge will have a clear impact on India's economic relationship with Japan," Kawaguchi observed.

Pointing out that India's exports to Japan accounts merely four per cent of India's software exports, she said Japan is eager to change the present trade relations between the two countries.

Kawaguchi said even though Indo-Japan trade figures are invariably lower than those of India-China and Indo-Korea, there is huge potential to increase them.

She also pointed out Indo-Japan partnerships in infrastructure projects like Delhi Metro and other transport and electricity projects.

The Foreign Minister proposed setting up a Joint Study Group for strengthening the economic relations.