The Japanese, for the first time, are partnering an Indian state for an investment purpose. But while the Gujarat government is leveraging the profile of having Japan as its international partner in Vibrant Gujarat Global Investors’ Summit 2009, the world’s second largest market economy is also battling recession at its home front, not to mention an unusual trade deficit, increasing unemployment rates and plummeting GDP growth.

Japan is the international country partner for the summit, which begins on January 12 in Science City, Ahmedabad, notwithstanding its minimal presence in terms of trade and industries in Gujarat.

Hirotsugu Hagiuda, the Consul General of Japan in India, who was in Ahmedabad on Saturday to inaugurate the four-day Japan Festival, said that with 38 per cent of the DMIC passing through Gujarat, they hope to capitalise on the SEZ (Special Economic Zones) and SIR (Special Investment Regions) that are being promoted by Gujarat for investment purpose.

A trade and industrial delegation headed by Modi had been on a six-day trip to Japan in April 2007, to aggressively woo the Japanese investors.

While Hagiuda mentioned reassurances given by Modi and the investment climate in Gujarat as pulls, he stressed the bulk of the DMIC and DFC project being in Gujarat has the Japanese looking for investment opportunities in Gujarat. “The chief minister was very enthusiastic to invite Japan,’’ said Hagiuda.

Hagiuda, while refusing to comment if Japanese investors have been offered sops and freebies on the lines of the Nano car project of the Tatas, said, “So far, the state government has promised to offer all the necessary basic infrastructure for the companies, and we are looking at the SEZs and SIRs in the state.”

Currently, the bulk of the Japanese industrial and trade presence in India, which has increased three-fold in the past year to the tune of 500 million US dollars, is concentrated in cities like Delhi, Mumbai and Chennai.