India gives a wink to
Japan By Siddharth Srivastava
NEW DELHI - With all the talk about the US
building bridges with India to counter China, New
Delhi too has been seeking new friends in the
region, one very important new friend being Japan.
Though not expressed in so many words, New
Delhi's intentions are not that different from
Washington's goal of checking an emerging China.
India and Japan also have a common interest in
seeking permanent seats on the United Nations
Security Council. There has been a flurry of
activity pointing to growing efforts to build
Indo-Japan ties. In a move that could not have
gone down well with Beijing last month, the two
countries announced a series of measures to step
up defense cooperation, including holding
goodwill exercises between
the Indian navy and the Japanese Maritime
Self-Defense Force, regular comprehensive security
dialogue, and meetings between defense ministers.
Japanese Prime Minister Junichiro Koizumi
is expected to express support for the Indo-US
civilian nuclear-energy agreement at a meeting
with US President George W Bush this month. In a
recent interview, Kisaburo Tokaia, a key
politician from Japan's ruling party, indicated
that Tokyo will consider supporting the India-US
nuclear deal if there is "adequate trust'' between
New Delhi and the international community over its
nuclear program.
Visiting India last
April, Koizumi said: "Given the convergence of
strategic interests, Japan and India need each
other as strong, prosperous and dynamic
partners.''
Indeed, observers say Beijing
is keen to promote bilateral relations with India,
with an obvious eye on business, which is expected
to grow exponentially in the next few years.
However, translating such goodwill into a
strategic alliance would require Beijing's backing
India on the Indo-US nuclear pact, support at the
Nuclear Suppliers Group, a permanent seat at the
Security Council, and turning away from Pakistan.
That seems like a bridge too far.
So far,
Beijing has been fairly ambiguous in its reaction
to the Indo-US nuclear deal. The language that has
been used has been negative and warning of deep
apprehensions. Pakistani President General Pervez
Musharraf recently said that if Washington is
averse to supplying nuclear reactors, Islamabad
would turn to Beijing, an indication of the deep
understanding that the two countries share.
Defense has been one major new area of
engagement between India and Japan. After the
recent four-day visit of Indian Defense Minister
Pranab Mukherjee to Tokyo, the two countries
agreed to "progressively advance content of future
exercises". In an indication of the sensitivities
involved, Mukherjee, who followed his Japan trip
with a visit to to China, refused to comment on
Beijing's reactions to India's defense arrangement
with Japan.
New Delhi hopes these
agreements will open doors for a wider defense
arrangement, including access to advanced military
and dual-use technology. Japan is the only major
producer of state-of-the-art military technologies
that does not supply arms and equipment to India,
because of strict laws that prevent arms exports
to virtually any country, with the exception of
its longtime ally, the US.
Japan is the
fourth-largest spender on armaments (after the US,
Russia and China), and top armaments producers,
such as Mitsubishi, Ishikawajima, Toshiba and
Kawasaki, have been lobbying Tokyo to ease the
export norms. Tokyo has already bent its rules by
supplying armored patrol boats to Indonesia to
fight terrorism and pirates, and is likely to
allow sales to other countries as well.
The Koizumi government is looking to
regularize the status of the armed forces and
revise the pacifist clause of the US-drafted
postwar constitution. This month, Japan's cabinet
formally endorsed legislation to upgrade the
Defense Agency into a fully fledged ministry, an
action seen as symbolic of future intentions.
India is also undertaking a major revamp
of its military arsenal, with immediate
requirements pegged at US$15 billion, including
acquiring 126 advanced fighter jets. India is one
of the biggest defense purchasers abroad, mainly
from Israel, Russia and Western Europe, with the
US recently joining the scrum. India surpassed
China in total purchases in 2004, agreeing to buy
$5.7 billion in arms, which is expected to
increase to more than $8.5 billion in 2006-07.
Of course, defense is only one aspect of a
new relationship; business is equally important.
According to an India Brand Equity Foundation
special report, 71% of surveyed Japanese companies
in India are planning to increase their
investment. These include majors such as Suzuki,
Honda and Toyota. Commerce Minister Kamal Nath
will head a 15-member chief executive officers'
mission to Japan this week that will look to boost
bilateral trade.
Total Indo-Japanese trade
grew by 18% in 2003-04 and by 14% in 2004-05 and
is expected to reach nearly $5 billion. In a
recent interview, Nath said India would seek to
enhance the value of trade with Japan to $10
billion by fiscal 2009. Japan is among India's top
five trading partners and has emerged as the
fourth-largest contributor of foreign direct
investment to India for the period from 1991 to
2004.
However, Japan's investments in
India at more than $2 billion over the past three
years are still quite low compared with the more
than $100 billion Japan has pumped into Southeast
Asia and China. Institutional investment from
Japan in the past year has been close to $5
billion, the lion's share of the total going into
the Indian stock exchange.
Japanese
companies are expected to pump in more investment
and step up bilateral business cooperation so as
not to lose out to South Korean and Chinese firms,
keen to exploit the growing Indian market. Japan
is wooing Indian information technology to provide
key support to manufacturing firms to become even
more competitive. The Japan External Trade
Organization, in a 2005 report, stated that
Japanese companies saw India as one of their top
priorities for expansion.
Last month,
India and Japan exchanged diplomatic notes
indicating approval to amend the income-tax treaty
between the two nations. The protocol will reduce
the withholding tax from 20% to 10%. The two
countries are also looking to join hands to
challenge China's domination of the global silk
industry.
Indeed, even as India shakes
hands with Beijing, it winks at Tokyo.
Siddharth Srivastava is a New
Delhi-based journalist.
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2006 Asia Times Online Ltd. All rights reserved.
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