| Published on 24-08-2007 In Business |
| Viewed 1023 times |
| New buoyancy on Indo-Japanese front |
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Written by
Kamlendra Kanwar |
Sceptical of the durability of India's progress, and deterred by a weak infrastructure and an obstructionist bureaucracy, the Japanese have been hedging their bets on India for over a decade. There has been a regular stream of business delegations from Japan, but while they have seen some positives, their assessment has not been strong enough to have opened the gates of investment wide.
Indeed, Japanese investors are prone to be over-cautious but once they, as a collective body, perceive a country to be worthy of investing in, they come in droves. But while they have been looking at India with some indulgence in recent years, reluctance has not given way to a final go-ahead.
Now, it seems that the happy moment may be round the corner after all. At the helm in Japan today and currently in India for a visit, Prime Minister Shinzo Abe is an unabashed friend of this country. Accompanied by a 250-member business delegation and all geared up to interact with and address India's top three chambers of commerce and industry, Abe means business this time around.
The time is indeed propitious because a country risk report on China has finally convinced Japan that it must reduce its dependence on the Chinese who are their largest trading partner. Strategically, too, India and Japan see merit in co-operating to block Chinese influence in Asia from going beyond safe limits.
Prime Minister Abe's call for closer cooperation between his country and India in defence, security and economic fields to create an "arc of freedom and prosperity" in the region in his address to Parliament on Wednesday was noteworthy. That Abe was invited to address Parliament while both the US and Chinese presidents could not do so on their respective visits last year due to political opposition is testimony to the fact that goodwill for Japan cuts across party lines.
Knowing the sensibilities in India on the civil nuclear deal with the US, Prime Minister Abe steered clear of referring to nuclear power but he did hold out the prospect of providing technology to meet India's growing energy needs. The Japanese rely heavily on nuclear energy and it stands to reason that they should have no qualms about assisting India in harnessing it provided the International Atomic Energy Agency and the Nuclear Supplier Group clear the way.
I recall how, when I was escorted around a nuclear power plant in Japan on a visit a few years ago I was asked by an engineer "I learnt my basics on nuclear energy when I was in training under Homi Bhabha in India in the fifties. Why is it that while we rely hugely on nuclear power today, your country is still going around in circles."
Pacifist as that country is and tied to American apron strings as it has been after the second world war, it had reacted unusually strongly to India's explosion of a nuclear device at Pokharan in 1998. Now, for the first time they have a prime minister who was born after the War and is not unduly weighed down by the guilt of the Japanese role in it.
In the economic sphere there is huge unharnessed potential. Indo-Japanese trade, at $6.5-$7 billion (about Rs26,900-29,000 crore) a year, is less than one third of the Sino-Indian trade, which itself is far from considerable. Of the total foreign direct investment received by India between August 1991 and March 2007 just 4.85%, or about $2,209 million accrued from Japan.
As the magazine India Now points out in its June cover story, against 300 Japanese companies in India, there are 6000 in China and 2000 in Thailand. And where China attracted FDI worth US$6.53 billion last year from Japan, India received a tenth of that.
Yet, if the new Japanese resolve is anything to go by, there is huge investment waiting to come in. Prime Minister Abe's call in Parliament for early conclusion of the Comprehensive Economic Partnership Agreement to push economic relations and raise the volume of bilateral trade to $20 billion in the next three years must be seen in that light.
His promise to assist India in infrastructure development, particularly the Delhi-Mumbai and Delhi-Kolkata Dedicated Freight Corridors and Delhi-Mumbai Industrial Corridor holds out exciting prospects considering how well the Delhi Metro project was executed with Japanese expertise.
Strategically, the more wary the Japanese get of China's designs in the future, the more they are realizing the benefits of building up India as a counter-poise, specially as a maritime power in Asia.
All in all, the portents for Indo-Japanese relations have never been better. One can only hope that this time no major roadblock would come in the way. |
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