Japanese Prime Minister Yoshihiko Noda's recent visit to India marks one more significant thrust to further strengthening Japan-India relations in areas like economic aid, trade and investment and clarifying their position in areas where a full meeting of minds has still not been achieved. Under the Vision for the Enhancement of India-Japan Strategic and Global Partnership, Mr. Noda and his Indian counterpart Manmohan Singh held extensive talks on bilateral, regional and global issues. The long joint statement issued by them on 28 December at the conclusion of their talks underlines the strong convergence of their mutual interests on a variety of issues affecting regional peace and security.
The following points would highlight the positive nature of the summit talks:
1. Civilian nuclear agreement: On the much expected negotiations relating to bilateral civilian nuclear agreement, Mr Noda indicated that Japan had not closed its doors. He only stressed that while it was necessary to learn lessons from the Fukushima calamity, negotiations with India would continue for finding an acceptable solution.
2. Currency Swap: In order to help India manage the depreciating rupee against the US dollar,, Japan has agreed to increase its currency swap arrangement from the present $3 billion to $15 billion. This measure, according to the Joint Statement, will further strengthen financial cooperation, contribute to financial and market stability and promote trade ties between the two countries.
3. Japanese economic aid ( ODA ):Despite the severe and unprecedented financial crunch that followed the triple tragedy in March 2011, the Japanese Government has seen to it that it does not come in the way of Indo-Japanese cooperation. Mr. Noda has pledged that Japan would extend to India ODA at a "substantial level" to encourage India's efforts towards social and economic progress. Accordingly Japan would extend ODA loans worth 134.288 billion yen to finance two new projects- the Delhi Metro Project Phase III and the West Bengal Forest Biodiversity Conservation Project as part of the first batch in the fiscal year 2011.
4. Delhi-Mumbai Industrial Corridor Project: Lauding the importance of the DMIC project which in particular would benefit six Indian states, Mr. Noda has pledged to make available $ 4.5 billion at the level of the private-public finance during the next five years. Both Mr. Noda and Dr Singh believe that the involvement of Japanese companies and agencies would provide a stimulus to the development of the DMIC.
In order to facilitate investments by Japanese companies, India will make efforts to resolve within the existing regulatory framework and guidelines of capital regulations. India will also set up an inter-departmental consultative mechanism to ensure speedy solution to issues raised by Japan during the period of the implementation of the DMIC.
Expressing their satisfaction at the steady progress in DMIC, both countries have agreed to accelerate steps for an early realization of projects like the sea water desalination at Dahej, Gujarat and a gas- fired independent power producer (PP ) in Maharashtra.
Both Mr. Noda and Dr Singh have also emphasised the importance of infrastructure development in the region connecting Chennai and Bangalore where more and more Japanese companies are setting up their plants. Mr. Noda has expressed Japan's intention to finance the preparation of a comprehensive integrated master plan of the region.
5. Trade and investment: Both leaders have laid stress on the need to expand the volume of their bilateral trade from the present $15 billion to $25 billion by 2014. They believe that if the CEPA is effectively implanted, the expected target can be reached, In this context, they recognize that a civilian nuclear agreement could also bolster bilateral trade. During the talks Dr Singh lamented the small size of the bilateral trade which pales into insignificance when compared with Sino-Japanese trade. Similarly, while the number of Japanese companies has grown to exceed 800, and provided employment to more than 150 thousand Indians, there is still a great deal of potential for further expansion.
6. Security Cooperation: There is satisfaction between the two leaders at the functioning of the Ministerial and other policy dialogues such as those between Foreign Ministers and Defence Ministers. They have expressed a strong desire for the holding of the long pending Ministerial level Economic Dialogue between the two countries. In 2012. They have shown great interest in initiating an India-Japan Business -Government policy Dialogue between India's Commerce Minister and the Minister of Economy, Trade and Industry of Japan. Both these mechanisms are expected to further enhance bilateral engagement. Both Mr. Noda and Dr Singh have also attached great significance to the launch of India-Japan- US trilateral dialogue which would deepen the strategic and global partnership of the two countries.
Maritime security, the East Asian Summit process , UN reforms, climate change and energy cooperation are some of the other subjects that drew their close attention.
Lastly, it is also useful to note that Mr Noda had just visited China a day before coming to India. According to reports, the Chinese official sources have played down some of the doubts raised by a few sections of the Chinese press that the India-Japan partnership had an anti-China sting.
(Prof. K.V. Kesavan is a Distinguished Fellow at Observer Research Foundation)
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