Japan PM visits India, eyeing trade and China

By: | at 08:00 PM | International Trade  

Japan’s Prime Minister Shinzo Abe arrived in India for a high-profile visit to India with around 200 business executives in a trip designed to boost trade with a booming economy and counterbalance China.

Trade between Asia’s largest and third-largest economies has failed to fulfill its potential as Japan focused on China and Southeast Asia, but Indian government officials predict it could double to around $14 billion by 2012.

The two countries are also seeking to act as a counterweight to China’s growing economic and diplomatic might in Asia by building closer economic ties. India, growing at around nine percent a year, also desperately needs new infrastructure investments.

“Neither Japan nor India has a desire to contain China,” C. Raja Mohan, professor at Nanyang Technological University in Singapore, wrote in the Indian Express.

“Yet a much larger challenge confronts Tokyo and New Delhi. Will they accept a subordinate status in a Sino-centric order that has begun to emerge in Asia? Or will Tokyo and New Delhi persist with the construction of a multipolar Asia?”

India’s Foreign Secretary Shiv Shankar Menon warned against a “zero sum game” with China—a country heading towards being India’s biggest trade partner. He added that relations with Japan could not come at the cost of China, and vice-versa.

Abe will address a joint session of Parliament during his three-day visit, a rare honor that officials tout as a sign of the importance of the visit.

But in a move that could refuel debate about Abe’s views on wartime history, the Japanese prime minister will also meet the son of Radhabinod Pal, an Indian judge on an Allied tribunal who opposed punishing Japanese war criminals from World War II.

Japanese media have said Abe’s meeting with the son of Pal—a figure revered by Japanese nationalists—could fray improving relations with China, which suffered under Japan’s military aggression in the early 20th century.


Japan is India’s 10th-largest trade partner, behind Belgium and Switzerland, a state of play that is out of sync with the two economies’ standing in Asia.

To help boost ties, the two sides will discuss a plan to build a $90 billion industrial corridor with state-of-the-art infrastructure linking Delhi and Mumbai, India’s financial capital.

The aim is to boost Indian manufacturing by helping make use of its cheap workforce while solving one of the bugbears of India’s economy—its poor infrastructure and transportation.

Tokyo is set to offer around 400 billion yen ($3.5 billion) in low-interest loans to help fund the construction of a high-speed freight line between New Delhi and Mumbai as part of that project, the Sankei Shimbun newspaper reported.

Menon touted New Delhi’s sleek new air-conditioned metro, which is partly funded and built by Japan and regarded as one of India’s most successful infrastructure projects, as an example of cooperation between the two countries.

India is also eyeing Japanese cooperation in civilian nuclear energy to meet the country’s growing demand for electricity, said V. Raghuraman, principal adviser to the Confederation of Indian Industry.

India will also enlist Japan’s support for its civilian nuclear deal with the United States, which faces opposition from leftist parliamentary allies at home and still needs international approval from the Nuclear Suppliers Group.

That support is especially important given that India’s relations with Japan—the only country to have suffered a nuclear attack and historically sensitive to nuclear proliferation—hit a low point in 1998 after India carried out a nuclear test.

Singh said on Monday that India was committed to developing its nuclear energy capability and other sources of power as its oil bill would impose an “unbearable burden” on the economy. ($1 = 114.83 yen) (Reuters)


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