The Hindu Business Line : Rising opportunities

The joint statement signed between the Prime Minister, Dr Manmohan Singh, and his Japanese counterpart, Mr Shinzo Abe, in Tokyo should be seen as part of a continuing process of strengthening India-Japan relations, which began with the enunciation of New Delhi's `Look East' policy in the 1990s. That process was taken to a qualitatively higher level by the announcement at the end of the August 2000 visit to New Delhi by the then Japanese Prime Minister, Mr Yoshiro Mori, of an Indo-Japanese "global partnership in the 21st century". Every subsequent meeting of the leaders of the two countries has taken the process forward, and Dr Singh's visit is no exception.

The 57-paragragh joint statement touches on a host of subjects, from the setting up of a Delhi-Mumbai `industrial corridor' to energy security cooperation and redevelopment of Nalanda university. A "strategic and global partnership" and a "special economic partnership initiative" have also been set in motion for, among other things, "stronger political, economic and strategic dimensions to bilateral relations, serve long-term interests of both countries, enhance all-round cooperation and contribute to greater regional peace and stability". These are laudable objectives, especially as Tokyo needs New Delhi's support on a long-term basis to counter the growing influence of Beijing in Asia and the world generally. Also, as Dr Manmohan Singh said, the Indian economic growth effort in particular could do much better with greater Japanese participation. The problem, of course, is to ensure that these strategic objectives are adequately supported by progress at the ground level, particularly on the economic front, which has been acknowledged to be the basis of the healthy all-round development of India-Japan relations. That there is cause for concern here is well indicated by the feedback from Japanese businessmen and industrialists who feel that the operating conditions in the areas of import tariffs, investment restrictions, the service sector, infrastructure and labour laws, among others, need to improve greatly if their participation in the Indian growth effort is to increase substantially.

The point is that these drawbacks, as Japanese investors see them, have been in the Indian economy for some years and also been focused on as problem areas by both New Delhi and Tokyo. That Japanese direct investments into India have not seen a wholesome increase in the past five-six years is perhaps proof that the operating conditions in India have not improved appreciably. Clearly, New Delhi will have to work overtime to make investment conditions more favourable for Japanese businessmen if the vision of strategic partnership between the two countries is to be fulfilled. Dr Manmohan Singh is right when he says that the India-Japan economic exchange is much below its potential and needs to be jacked up. However, the onus for this lies squarely with New Delhi, and it remains to be seen how the obligation will be met.

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