With a successful cultural sightseeing stopover in Kyoto, PM Modi’s Japan visit holds more immediate prospects to move India-Japan bilateral relations forward. Attaching “paramount importance” to an “excited” PM’s visit even the ministry of external affairs fancied “great expectations”. Given the Indian media hype, the annual India-Japan PM-level summit was satisfying to both nations that set the tone for a “strong and robust future in bilateral relationship”.
Despite being preoccupied with his first and major cabinet reshuffle on September 3, PM Abe showed positive gestures in meeting Modi in Kyoto and Tokyo where several agreements were inked. How to push India-Japan strategic and global partnership forward occupied centrality during the summit. Other than attending the summit, Modi visited Toji and Kinkakuji temples in Kyoto and met schoolchildren and University students in Tokyo, besides Emperor Akihito.
Taking advantage of Japan’s recently liberalised defence export policy and regulations, India will soon receive Japanese defence equipment and even technology to manufacture them in India. Now, discussions in the Joint Working Group on cooperation in US-2 amphibian aircraft and its technology will move faster. Japan agreed to sell and transfer technology to India to build the specialised seaplane, the US-2 produced by ShinMaywa. These aircraft act as a force multiplier for the Indian Navy by allowing better efficiency when applied for use in far-flung areas. At present, India needs 15 such seaplanes. These can carry nearly 30 personnel and 18-tonne load and fly 4,500km at a stretch.
Since India and Japan grapple with an assertive China, notwithstanding criticism, both are certainly set to deepen bilateral economic and defence tie-ups. For quite some time, India is considering supplying rare earth material (REM)—a group of metals critical for high-tech manufacturing including mobile phones and hybrid cars—to the Japanese Toyo Tsusho production unit in Vizag. Here again, it is China with its largest REM reserve that controls 90% of world business. While India, with 3% of the world’s REM deposits, can supply at least 15% of Japanese production needs that now is sure to receive about 2000 tonnes.
Abe announced a goal to double Japan’s investment and the number of Japanese companies operating in India within five years. He also expressed his intention to deploy about $34 billion of private and public investment and financing, including its official development assistance (ODA), in the next five years. Rising Japanese FDI and ODA in India hereafter include such projects as introducing bullet trains/Shinkansen/high-speed trains—to begin with Mumbai-Ahmedabad and Chennai-Bangalore—as well as building several smart cities across India.
With these and mutually cooperative economic gestures, Japanese ODA and investment in India is set to increase in the coming years though bilateral trade takes more time to increase from the present $16.3 billion in 2013-14.
In 2013, FDI by Japanese corporations was US$ 135 billion. USA registered $43.7 billion, Europe $32.12 billion followed by ASEAN, Central and South America and China, according to a 2014 JETRO survey of 9,800 Japanese companies. China’s share was only $9.1 billion while ASEAN had $23.6 billion. Given the rising income levels in India and a vast market, more Japanese FDI will gradually flow in to fill the gap in India’s $1-trillion infrastructure sector. To upgrade and stay put India needs to do a lot, including accelerating relevant reforms.
Regarding the sensitive issue of the peaceful use of atomic energy, there was no agreement but efforts made so far were recognised and officials were instructed to negotiate further. A pact might take shape in the next six months that would pave the way for Japan to export nuclear reactors to India. Japan wants to specify that the proposal can be suspended if India conducts nuclear weapons tests. That India has not signed the Nuclear Nonproliferation Treaty designed to prevent the spread of nuclear weapons and technology was also the other objection.
The two sides stressed the importance of regularisation of bilateral maritime exercises as well as on Japan’s continued participation in the India-US Malabar series of exercises. Modi welcomed the recent developments in Japan’s policy on transfer of defence equipment and technology. India and Japan directed their officials to launch working-level consultations between the two countries with a view to promoting defence equipment and technology cooperation.
“Recognising the special quality of bilateral engagement between India and Japan imparted by multi-sectoral ministerial and cabinet-level dialogues, in particular, those between their foreign ministers, defence ministers and ministers dealing with finance, economy, trade and energy, the two Prime Ministers decided to intensify and invigorate such exchanges,” the joint statement mentioned.
The summit attached importance to the dialogue between their national security advisers, as a key instrument of building deeper mutual understanding and cooperation. Both India and Japan agreed to work harder to launch a “two-plus-two” security consultative framework involving their foreign and defence ministers. Upon his visit to the University of Kyoto’s stem cell centre PM Modi sought Japanese assistance to Indian attempts to fight the deadly sickle-shaped red blood cells that afflicts tribal people. Japan’s response to this was positive.
The decision to step up the bilateral strategic relationship to a “special” strategic relationship irked China as it has proactive ambitions in its sea and land borders. Modi, aka India’s Abe due to his determination to lift national self-respect through economic growth, made references to “expansionism” and “development”. Concerned with these and Abe’s excesses, China was quick to react stating, “Tokyo and New Delhi must consider the coexistence of China, Japan and the US in the region when promoting their security cooperation.” A state-run daily further said that Abe is dividing China and India and India-Japan ties face “huge uncertainty” as BRICS rises and China-India relations improve.
There is a body of opinion in many developing countries that courting Japan today as a development model involves a high cost as compared to replicating the experiences of Malaysia, Indonesia and Singapore from the 1970s to 1990s. Yet, it makes perfect sense to revive the Japanese economy with better growth i.e. “Abenomics”.
The author teaches Japanese studies at the School of International Studies, JNU.
Email: hsprabhakar@gmail.com