India, Japan agree $15 bln currency swap as rupee swoons

• India and Japan have agreed to a $15 billion currency swap line, Japan's Prime Minister Yoshihiko Noda said on Wednesday, in a positive move for the troubled Indian rupee, Asia's worst-performing currency this year.
• A previous $3 billion dollar to local currency arrangement between the two countries expired in June.
• India and Japan enjoy warm diplomatic ties, but at a paltry $15 billion, bilateral trade in 2010 was less than 5 percent of Japan's commerce with China.
• The currency swaps are expected to support the Indian rupee as it continues to weaken against the greenback and Europe's sovereign debt crisis hits India's exports.
• Japan's dollar-swap arrangement with India follows a similar agreement with South Korea in October. and is similar to the South East Asia-wide Chiang Mai swap initiative.
• Japan would invest $4.5 billion in a 1,483 km (920 mile) industrial corridor stretching from New Delhi to the financial hub of Mumbai in the west.
• Japan also promised loans in yen worth $1.7 billion for two projects, including expanding Delhi's metro railway.
• The industrial corridor includes plans for 24 new cities. Indian Trade Minister Anand Sharma earlier said that overall more than $100 billion would be invested in the project, which could help transform India's economic landscape and give its choked, teeming cities room to breathe.
• "One big objective of the industrial corridor is to create a manufacturing base for Japanese companies to export to Europe and Africa," said economic diplomacy expert Robinder Sachdev of think-tank Imagindia.
• In the joint statement Noda and Singh said talks on civil nuclear sales were going "in the right direction" and that progress was made on Wednesday. They did not give a timeline for further negotiation.
• Hours before Noda left for India on Tuesday, Japan's security council relaxed a decades-old arms exports ban. India was the world's top weapons importer last year.