Realignment in Asia
THE Japanese Prime Minister, Dr. Yukio Hatoyama (62), paid a three-day visit to India from December 27. He discussed the ways to expand, enhance and strengthen the India-Japan strategic and global partnership during his meeting with his counterpart Dr. Manmohan Singh. This was the 4th Annual Summit between the prime ministers of India and Japan since 2006.
India is the only country with which Japan has an institutional arrangement of an annual summit-level visit. Sources said Hatoyama insisted on honouring the letter and spirit of the agreement to hold annual summits, despite his popularity waning in the country (falling below 50% from a post-election height of 71%).
It was the first visit by a Japanese premier to Mumbai, the commercial capital, where Hatoyama reportedly met with Ratan Tata and Mukesh Ambani. His predecessor Shinzo Abe had visited Kolkata in 2007.
The Delhi-Mumbai industrial corridor, which was officially launched during the visit, could prove to be a big leg-up for Indian manufacturers. The two countries are targeting some "early bird" ventures that will take off soon.
This industrial corridor will have several supporting infrastructure projects such as power facilities and rail connectivity to ports en route, and will also cover the development of ports on the west coast of India.
Along this corridor, several industrial estates, special economic zones and clusters of high quality infrastructures have been proposed for development in order to attract more investments, including those from Japan.
An MoU has also been signed for establishment of the Indian Institute of Information Technology for Design and Manufacturing in Jabalpur. Besides these, the Indian Department of Science and Technology and the Japan Science and Technology Agency have signed an MoU for a scientific cooperation program.
Over the years, Indo-Japanese relationship has grown in diverse fields. However, it is in the fields of trade, business and infrastructure that there has been substantial growth. Both sides aim to raise the figure to $20 billion by this year.
Furthermore, partnering in developing infrastructure and tying it up with industries in a variety of fields, such as automobiles, has prompted the Japan-India Business Leaders Forum to describe the economic relations between India and Japan as among the richest in potential, both in Asia as well as the world.
As reported in the Japanese media, from 2006 to 2010, 27 projects have brought to India Japanese FDI of around $5.5 billion. Japanese joint ventures in India are also contributing to India's exports to other countries -- for example, Maruti Suzuki is exporting cars to various parts of the globe.
These trends indicate that there is a qualitative shift in the strategies being followed by the Japanese companies, which have started considering India as a future export hub for their products.
If the same trends continue, they are likely to facilitate more exports from India in the future.
The number of Japanese business establishments operating in India has also increased. It is estimated that there were 475 Japanese business establishments in India in February 2007, up from 231 in August 2003.
The fact that India continues to be high on the radar of the Japanese business community was brought out again as late as December 15, when the Japan External Trade Organisation (JETRO) released the results of their latest survey on business operations of Japanese-affiliated firms in 17 countries.
China and Russia are getting closer politically and economically. Both are members of the Shanghai Cooperation, which was set up in 2001 with four other Central Asian countries. This organisation is believed to work as a counterweight to halt the increasing influence of US in Russia's backyard -- Central Asia.
Japan, a close ally of Washington, does not want to be in the bad books of Russia and China. Russia, since the Second World War, has occupied some islands claimed by Japan. Japan, therefore, needs to have good relations with both China and Russia.
Hatoyama has reportedly proposed formation of an East Asian Community similar to the European Union. He said the vision was designed to unify the region, possibly under a single currency. He urged the Chinese president to work on promoting public support for an accord with Japan. He later said that this new political and economic architecture might include Asean, India and Australia.
China is Japan's main concern both in strategic and economic areas. With China poised to surpass Japan as Asia's largest -- and the world's second largest -- economy as early as 2010, Japanese Prime Minister Yukio Hatoyama has turned his attention to India for economic and strategic reasons.
Furthermore, Hatoyama's budgeting efforts have seen a plunge in tax revenue as Japan's export-oriented economy struggles amid the fall in international trade brought on by the global economic crisis. He wants to focus on the task of rebuilding the Japanese economy and recovering from its worst recession since World War II. This visit signifies that both India and Japan have come to the conclusion that Asia cannot mean China alone.
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