THE MOVING FINGER WRITES
By M.V. Kamath
For some inexplicable reason, Indo-Japanese relations have seldom been subject of much discussion in the Indian media. The focus has largely been on Pakistan and China, on the latter for its constant provocative behavior. But India has every reason to be pleased to have Japan as a friend. And, except when India sought to go for nuclear weapons test at Pokhran in 1998 and Tokyo understandingly imposed sanction on it, that included the suspension of all political exchanges and the cutting off of economic assistance, Delhi’s relations with Tokyo have been on an even keel.
As a matter of fact, Japan unilaterally withdrew the sanctions it had imposed on India three years later. Japan is currently India’s third largest source of Foreign Direct investment (FDI) and Japanese companies have made cumulative investments of around $2.6 billion in India since 1991. During Prime Minister Dr Manmohan Singh’s visit to Japan in 2010 both countries agreed to foster increased business exchanges, people to people contact and signed a Memorandum of Understanding to simplify visa procedures. Also agreed upon was abolition of customs duties on 94 per cent of trade between the two countries over the next decade. According to an Agreement arrived at, tariffs will be removed on almost 90 per cent of Japan’s exports to India and 97 per cent of India’s exports to Japan. Now, with the conclusion of the India-Japan Summit held in Delhi in later December 2011, more opportunities for bilateral trade and investment have opened up. the talks between Dr Singh and Japanese Prime Minister Yoshihiko Noda have been very rewarding, with Japan strongly signaling its commitment to infra-structure development in India.
Consider the following: In the first place Japan has contributed heavily to the development of the 1,500- km Western Dedicated Freight Corridor (DEC) linking Delhi and Mumbai. As much as 80 per cent of the Rs 42,000 crore project is being financed by Japan’s Official Development Assistance. In the second place, Japan is working with India to develop the Delhi-Mumbai Industrial Corridor (DMIC) at a cost of about $90 billion. The expectation is that the completion of this infra-structure will double employment potential, triple industrial output and, even more significantly, quadruple exports from the region in five years. Meanwhile, both India and Japan have set up a facility to fund commercially unviable parts of DMIC which is a novel concept. And along very much the same lines, Japan has shown interest in building a Chennai-Bangalore Industrial Corridor (CDIC), considering that several Japanese companies have established their presence in the region.
The only hitch – if there is one – is in the matter of export of rare earth metals to Japan, China, according to media reports, has declined to give Japan access to these metals which are essential to the production of electronic components. Tokyo expects India to be more cooperative. For one thing, unlike China, Japan has never forgotten India’s friendly attitude towards it in the past. After the second world war, when the victorious Western Powers were out to punish Japan at the International Military Tribunal, it was an Indian, Justice Radha Binod Pal who stood by Japan. When steps were being taken to limit Japan’s sovereignty at the San Francisco Peace Conference in 1951, India again stood by Japan.
Indeed after restoration of Japanese soverignity India signed a separate peace treaty and established diplomatic relations with Tokyo on 28 April 1952, even waiving all reparations claims on it. In the last one decade there have been positive developments in Into-Japanese relations. In August 2000, Japanese Prime Minister Mori visited India. Next year, Indian Prime Minister Atal Bihari Vajpayee visited Japan. Again in 2005 Japanese Prime Minister Koizumi visited India and signed a Joint Statement on Indo-Japan Global Partnership. As of March 2006, Japan was the third largest investor in India. Actually, the 2007 annual survey conducted by Japan Bank of International Cooperation ranked India as the most promising overseas investment destination for Japanese investors over the long term. Importantly, India is also one of the only three countries in the world with whom Japan has a security pact, the other two being Australia and the United States. In 2007 the Japanese Self Defence forces took part in a naval exercise in the Indian Ocean, known as Malabar 2007 which involved the navel forces of India, Australia, Singapore and the United States. The year 2007 is also important because a Declaration had been made that it is India Japan Friendship Year. Not many know that there are more than sixty projects in India under implementation with Japanese loan assistance. It is necessary, in view of China’s expansionist attempts in recent times for India and Japan to work in unison on many fronts. It is just as well that the United States is involved in these efforts. As a Pacific Power, the United States cannot be blind to Chinese aggressiveness.
India’s partnership with the US is, in the circumstances, a wise step. Japan has been a large investor in China in the past but it should know by now that putting all eggs in a Chinese basket is not the wisest thing to do even if China provides cheap and disciplined labour. China is Japan’s biggest trading partner with a bilateral trade of $340 billion, putting in shade Sino-Indian trade of just about $50 billion.
Clearly there is a wide scope for further Indo-Japanese economic cooperation. Already the two sides have signed the Comprehensive Economic Partnership Agreement covering trade in goods as well as services. Not as well known is the fact – pointed out by Kenishe Yoshida, a Director of Softbridge Solution, Japan, that Indian engineers are becoming the backbone of Japan’s IT Industry. Nor is it common knowledge that a Japanese steel manufacturer has agreed to partner JSW Steel, India’s third largest steel producer to construct a joint steel plant in West Bengal. These are all good signs. They must be treated as prelude to greater cooperation between Japan and India in the years to come. Significantly, India and Japan will resume negotiations on having a civil nuclear cooperation agreement with each other in due course. All these body well for the future and in full consonance of India’s Look East policy. Any country which feels it can bully India into submission hopefully would get the message right.