Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe will meet for the fourth time in just over a month on Friday. Their schedule reads like a global romance: the two met recently in Paris, had dinner in Istanbul, lunch in Kuala Lumpur and now will be together in New Delhi for three days.
The Japanese relationship, say senior Indian officials, is one of the bilateral ties that has seen very visible changes in a short time. They also see it as having the greatest potential to fundamentally transform India’s economy, moving it to a higher level of growth and technology.
Tokyo, admit Japanese officials, began taking New Delhi more seriously after the Indo-US nuclear deal and the evidence that Washington was taking greater geopolitical interest in New Delhi. After careful analysis, Japan decided the best way to boost India would be to provide it world-class infrastructure and migrate Japanese factories to Indian soil.
Abe added a strategic facet to all of this. He sought to “normalise” Japan, shedding its post-war pacificism, and wanted the world’s largest democracy to endorse and legimitise his efforts.
There will be underlying economic benefits for both. Japan needs overseas demand for its infrastructure sector. India needs a competitive export-oriented manufacturing sector with matching logistics and transport backup.
And then there was the increasing common concern about a rising and belligerent China, something that became a common concern from about 2007 onwards.
There are now a host of bilateral projects between India and Japan attempting to put flesh to the bones of these big visions. They range from the $ 150 billion Delhi-Mumbai industrial corridor to building highways and bridges connecting India’s northeast to Myanmar.
Abe’s visit will seek to clinch three outstanding deals, or at least bring them closer to the finish line.
The first one is a civil nuclear deal. Japan is the world leader in reactor technology – almost every large reactor is dependent on Japanese components. Even if India settles its liability issues, without a Japanese civil nuclear deal, no US or European reactor can be sold to India.
New Delhi having made a nuclear deal the litmus test of a country’s strategic trust in India, the Japanese unwillingness to sign on the dotted line has been a source of frustration. Japan, because of the deep nuclear scars in its history, has pushed for India to agree to stronger language on nuclear testing. India has insisted Japan accept the terms accepted by the US.
The two sides, say official sources, are just a few words short of an understanding. When Abe comes, the hope is that he will come with work-around language that will allow Japanese firms to sell but not cause political waves back home for him.
If India’s priority is nuclear, Japan’s are bullet trains and seaplanes. China, having reverse engineered Japanese train technology, has begun selling it overseas, recently pipping Japan to the post for a deal in Indonesia.
Securing a big Indian contract is crucial to the survival of Japan’s overseas train ambitions. With the Indian cabinet having cleared the contract, thanks to the efforts of railway minister Suresh Prabhu, this at least seems likely.
Finalising the $1.2 billion sale of Japanese ShinMaywa US-2 seaplanes, however, remains in limbo. The sale’s significance lies in this being Japan’s first post-war military sale, part of the “normalisation” that Modi and Abe desire.
Indian defence ministry officials have been foot-dragging, say sources, “as they see only the accounting and not the strategic issues involved” and have left the deal hanging.
But Tokyo has made this a litmus test of military ties with New Delhi, without which defence relations will be solely about holding exercises.
There are numerous other areas India and Japan are exploring, but completing large deals has proven a challenge. This is true even in private investment. While the number of Japanese firms investing in India has more than doubled since 2008 to over 1,200, the amount involved has remained stagnant. Similarly, Japanese aid to India has fallen, tripped up by finance ministry red tape.
Hemant K Singh, former Indian ambassador to Japan, said: “There are problems with both sides. I give 1.5 stars out of three to each country.”