Japan warms relations with India but future accord remains hazy

TOKYO, Dec. 30 (Xinhua) — Japanese Prime Minister Yukio Hatoyama’s three-day visit to India, which saw him return to Tokyo Wednesday, is, to a certain degree, being heralded as a success, as official talks with his counterpart Manmohan Singh, as well as closed-door meetings with top Indian industrialists and bankers, have deepened diplomatic understanding and cohesion and boosted economic bilateral relations.

However, while discussions on trade and commerce were particularly fruitful, the two countries didn’t have a meeting of minds on all issues and some local media reports described Hatoyama’s visit as “somewhat superficial.”

Political analysts have described diplomatic ties between Japan and India as “frosty” in recent years, as Japan’s former administration didn’t fully register India’s emerging possibilities on its economic radar and the two countries became embroiled in nuclear debates, which further strained bilateral ties.

OPPORTUNITY KNOCKS

Prior to meeting with his equivalent, Hatoyama held talks with top Indian industrialists, including Tata group Chairman Ratan Tata and Reliance Industries head Mukesh Ambani, at hotel in Mumbai, as both countries seek to perpetuate and augment a diverse economic relationship that will ensure strong growth and development in the fields of trade, business and infrastructure, reciprocally beneficial for both nations.

Although analysts have commented that bilateral economic relations have yet to reach their full potential, Hatoyama was assured by India’s business leaders that the growth of the Indian economy offers prodigious opportunities to substantially increase trade and economic cooperation between both countries.

This sentiment was reflected by India’s premier in talks aimed at expediting negotiations on formalizing an official, economic partnership pact between the two nations.

Describing the economic partnership as the “bedrock” of India-Japan relations, Prime Minister Manmohan Singh on Tuesday said that the two countries have decided to expedite negotiations on the Comprehensive Economic Partnership Agreement (CEPA), according to local media reports.

Japan is already India’s sixth largest investor and annual trade between the two countries amounts to some 12 billion U.S. dollars, according to recent statistics. This figure is set to leap to as much as 20 billion U.S. dollars in 2010, as the two nations look to amplify their economic ties, on the back of a series of successful tie ups.

The Tata-DoCoMo tie-up and the Daiichi Sankyo venture with Ranbaxy Laboratories, perceptibly contributed to annual trade figures between the two countries and the success of the collaborations has seen the number of Japanese companies investing in India more than doubling in the past three years, from 267 in 2006, to 627 in 2009.

“We are hopeful that this (CEPA) can be completed in time for the next annual summit meeting,” said Singh in his opening remarks at a press conference with Hatoyama.

Highlighting the scope of potential for an enhanced cooperative economic approach by the two countries, Singh made it clear that further Japanese investments in India were “welcome”.

“In particular, there is a great scope for the expansion of cooperation in the areas of urban infrastructure, high technology and renewable and energy-efficient technologies,” Singh said.

At the summit-level meeting, the two sides also agreed on the early implementation of the Dedicated Freight Corridor project between Mumbai and Delhi.

Hatoyama also trumpeted the decision to establish a Japan External Trade Organization (JETRO) Chennai office, which would accelerate further investment by small and medium-sized Japanese enterprises in India.

Following the conference the two prime ministers issued a joint statement saying they shared the view that economic relations between India and Japan would develop even further as a result of the conclusion of the C.E.P.A. and other joint initiatives.

AMBIGUITY REMAINS

As much as trade discussions and future bilateral economic agreements and ventures between Japan and India have gone a long way to improving economic dialogue between the two nations, New Delhi was left wanting to know more about India’s place in Hatoyama’s proposed East Asian community.

Political analysts have pointed out that the fact that India, as the world’s second most populous nation, with genuine prospects of becoming the third largest economy globally in a decade, received no mention in the election manifesto of the Democratic Party of Japan (DPJ) and fear that Hatoyama’s recent visit was a goodwill gesture rather than a concerted move towards including India in his designs for a powerful and autonomous East Asian community.

Over the years, the unrealized potential of India-Japan relations has been the staple of much discourse on the subject and the debates are intensifying.

“Not much is also known about Prime Minister Hatoyama’s and the DPJ’s perspectives on Japan’s relations with India in an Asian neighborhood where both China and India will figure prominently in the years to come. And what has been known so far does not quite point to the possibility of a re-orientation of Japan’s policy towards India at the political and economic levels,” said C.P. Ravindranathan, a former Indian envoy and honorary professor at Xavier’s Institute of Management and Entrepreneurship (XIME) in Bangalore, India.

Annual summits and a structure of multiple channels of dialogue were to be the change drivers in this inchoate partnership, but it seems, at least for now, Japan-India relations are predominantly prioritizing trade and commerce.

“However, with the change of government in Japan, and a party in power for the first time at that, there is some uncertainty as to how India-Japan relations will fare in the immediate future,” Ravindranathan said in an interview with a local media of India.

What New Delhi really expected from Hatoyama on his recent visit was for him to unequivocally proclaim Japan’s political will to partner with India, a clear stance inspired by a larger vision of Asia wherein a Japan-India relationship will serve to promote both nation’s economic interests and security in a multi-polar world, political commentators indicated.

The two nations failed in their attempt to raise their bilateral strategic profile as differences in opinion over India’s civil nuclear operations and India’s hope for support from Japan, could not be resolved — an issue that could negatively impact future diplomatic tie between the two nations.

Hatoyama said Japan would not be supplying India with nuclear reactors and other material for India’s civilian nuclear sector any time soon, thereby limiting India’s options to quickly develop its atomic power segment and generate the electricity it needs to fuel its developmental needs.

“We discussed civil nuclear cooperation. This would become a very important agenda in the future,” said Hatoyama, indicating that Tokyo has problems with New Delhi’s refusal to sign either the Nuclear Non-Proliferation Treaty or the Comprehensive Test Ban Treaty (CTBT).

“I expressed the hope that along with the U.S. and China, India will sign and ratify the (CTBT) treaty,” Hatoyama said.

According to sources close to the matter, weighing heavily on India’s appeal to Japan for civil nuclear cooperation, was the issue of Japan’s sanctioning and additional punitive punishments administered to India following the country’s test explosions of five nuclear weapons in May 1998. The tests were heavily condemned by the United Nations, the United States, as well as Japan.

Tokyo and New Delhi have reached out to each other in a positive move towards readdressing their existing relationship and although the direction of this relationship remains, as yet, somewhat unclear, to the chagrin of a number of ministry official and political analysts in India, Hatoyama’s visit to India has opened up future, increased trade prospects for both countries and paved the way for improved, more frequent diplomatic dialogue to ensue as India’s presence on Japan’s economic radar grows ever bigger. — Xinhua