Sep 01 2014 : The Economic Times (Delhi)
A partnership based on principle and pragmatism
Toshihisa FUSE
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There has been unprecedented progress in bilateral economic and strategic engagement in recent years resulting in cooperation at various levels
The friendship between India and Japan has a long history in strong cultural and civilisational ties. The modern nation states have carried on the positive legacy of the old association which has been strengthened by shared values of belief in democracy, individual freedom and the rule of law. Over the years, the two countries have built upon these values and created a partnership based on both principle and pragmatism.Today, India is the largest democracy in Asia and Japan the most prosperous.The arrival of Indians in Japan for business and commercial interests began in the 1870s at the two major open ports of Yokohama and Kobe. In recent years, there has been a change in the composition of the Indian community with the arrival of a large number of professionals.These include IT professionals and engineers working for Indian and Japanese firms as well as professionals in management, finance, education, and research who are engaged with multinational as well as Indian and Japanese organisations with Nishikasai area in Tokyo emerging as “mini-India“.
Narendra Modi, Prime Minister of India, and Shinjo Abe, Prime Minister of Japan, share a very special relationship, and both are bullish on Japan and India's economic growth in the fast shifting geo-political and geoeconomic order of Asia. The friendship between Abe and Modi gained steam in 2007 when the former visited Gujarat. Both Abe and Modi share very similar views on economics and to a large extent are on the same page regarding world affairs, specifically India, and Japan's place in the rise of Asia.
India and Japan have firmed up their first-ever defence cooperation agreement, which is slated to be signed during Prime Minister Narendra Modi's visit to Tokyo. Economic ties between India and Japan are being reinforced with the two countries expected to clinch a $1.65-billion defence aircraft deal during Prime Minister Narendra Modi's visit to Japan.
As India is expected to build a train network between Mumbai and Ahmedabad in Western India, Abe is expected to pitch Japanese Shinkansen high speed bullet train technology. The global and strategic partnership with the provision of annual prime ministerial summits between India and Japan has formed the foundation for the strengthening ties in diverse fields, including identifying strategic convergences. India is the only country with which Japan has such annual summit meetings alternating between Delhi and Tokyo. Thanks to the elevation of relations and the annual summit mechanism, there has been unprecedented progress in the bilateral economic and strategic engagement in recent years resulting in cooperation in various fields including defense and security, and the conclusion of a Comprehensive Economic Partnership Agreement (CEPA) in 2011.
In the economic sphere, the complementarities between the two countries are particularly striking. (i) Japan's ageing population (23% above 65 years) and India's youthful dynamism (over 50% below 25 years); (ii) India's rich natural and human resources and Japan's advanced technology; (iii) India's prowess in services and Japan's excellence in manufacturing; and (iv) Japan's surplus capital for investments and India's large and growing markets thanks to the burgeoning middle class.
In FY 2013-14, Japan-India bilateral trade reached $16.31 billion, which is 11.89% lower than $18.51 billion in the previous fiscal year. The fall in the total trade was mainly due to reduction in Japanese exports by 23.53%.However, India's exports have risen by 4.36% in 2013-14. The share of the India-Japan bilateral trade has been hovering around 1 per cent of Japan's total foreign trade, while it was in the range of 2.2 to 2.5 per cent of India's total trade in the last couple of years.
India's primary exports to Japan have been petroleum products, iron ore, gems and jewellery, marine products, oil meals, ferroalloys, inorganicorganic chemicals, etc. India's primary imports from Japan are machinery, transport equipment, iron and steel, electronic goods, organic chemicals, machine tools, etc.
Japanese companies have made an investment of $15.359 billion in India between April 2000 and December 2013. This accounted for 7% of total FDI inflow into India and made Japan the 4th largest investor in India.Japanese automakers are moving to bolster Indian production bases. Japanese heavy electrical machinery manufacturers and trading houses are also eyeing demand stemming from India's efforts to improve its underdeveloped power infrastructure. Japan has been extending bilateral loan and grant assistance to India since 1958.Japan is the largest bilateral donor to India. Japanese ODA supports India's efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs. The number of Japanese companies coming to India is increasing rapidly in recent years.More than 1,000 Japanese companies are operating in India as of 2014. JCCII takes the initiative to undertake, encourage, facilitate and promote the development of trade industry between India and Japan.
This visit of Prime Minister Narendra Modi to Japan is a remarkable development and will attract a large number of new investment and technology from Japan to India to create new opportunities in employment. I am very confident of the great success of Japanese companies in India. And also believe that the Abe-Modi dynamics, in all likeliness, will boost the trade relations between the two counties significantly in the years to come.
--The writer is President of Japan Chamber of Commerce and Industry in India
Narendra Modi, Prime Minister of India, and Shinjo Abe, Prime Minister of Japan, share a very special relationship, and both are bullish on Japan and India's economic growth in the fast shifting geo-political and geoeconomic order of Asia. The friendship between Abe and Modi gained steam in 2007 when the former visited Gujarat. Both Abe and Modi share very similar views on economics and to a large extent are on the same page regarding world affairs, specifically India, and Japan's place in the rise of Asia.
India and Japan have firmed up their first-ever defence cooperation agreement, which is slated to be signed during Prime Minister Narendra Modi's visit to Tokyo. Economic ties between India and Japan are being reinforced with the two countries expected to clinch a $1.65-billion defence aircraft deal during Prime Minister Narendra Modi's visit to Japan.
As India is expected to build a train network between Mumbai and Ahmedabad in Western India, Abe is expected to pitch Japanese Shinkansen high speed bullet train technology. The global and strategic partnership with the provision of annual prime ministerial summits between India and Japan has formed the foundation for the strengthening ties in diverse fields, including identifying strategic convergences. India is the only country with which Japan has such annual summit meetings alternating between Delhi and Tokyo. Thanks to the elevation of relations and the annual summit mechanism, there has been unprecedented progress in the bilateral economic and strategic engagement in recent years resulting in cooperation in various fields including defense and security, and the conclusion of a Comprehensive Economic Partnership Agreement (CEPA) in 2011.
In the economic sphere, the complementarities between the two countries are particularly striking. (i) Japan's ageing population (23% above 65 years) and India's youthful dynamism (over 50% below 25 years); (ii) India's rich natural and human resources and Japan's advanced technology; (iii) India's prowess in services and Japan's excellence in manufacturing; and (iv) Japan's surplus capital for investments and India's large and growing markets thanks to the burgeoning middle class.
In FY 2013-14, Japan-India bilateral trade reached $16.31 billion, which is 11.89% lower than $18.51 billion in the previous fiscal year. The fall in the total trade was mainly due to reduction in Japanese exports by 23.53%.However, India's exports have risen by 4.36% in 2013-14. The share of the India-Japan bilateral trade has been hovering around 1 per cent of Japan's total foreign trade, while it was in the range of 2.2 to 2.5 per cent of India's total trade in the last couple of years.
India's primary exports to Japan have been petroleum products, iron ore, gems and jewellery, marine products, oil meals, ferroalloys, inorganicorganic chemicals, etc. India's primary imports from Japan are machinery, transport equipment, iron and steel, electronic goods, organic chemicals, machine tools, etc.
Japanese companies have made an investment of $15.359 billion in India between April 2000 and December 2013. This accounted for 7% of total FDI inflow into India and made Japan the 4th largest investor in India.Japanese automakers are moving to bolster Indian production bases. Japanese heavy electrical machinery manufacturers and trading houses are also eyeing demand stemming from India's efforts to improve its underdeveloped power infrastructure. Japan has been extending bilateral loan and grant assistance to India since 1958.Japan is the largest bilateral donor to India. Japanese ODA supports India's efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs. The number of Japanese companies coming to India is increasing rapidly in recent years.More than 1,000 Japanese companies are operating in India as of 2014. JCCII takes the initiative to undertake, encourage, facilitate and promote the development of trade industry between India and Japan.
This visit of Prime Minister Narendra Modi to Japan is a remarkable development and will attract a large number of new investment and technology from Japan to India to create new opportunities in employment. I am very confident of the great success of Japanese companies in India. And also believe that the Abe-Modi dynamics, in all likeliness, will boost the trade relations between the two counties significantly in the years to come.
--The writer is President of Japan Chamber of Commerce and Industry in India
