Japan doubles India investment to $35 bn

Nuclear energy talks also progress; Modi takes veiled swipe at China

India and Japan on Monday announced deepening of their strategic defence and economic cooperation and asked their officials to expedite inking of a pact for nuclear energy cooperation. While Tokyo announced doubling of its investments in India and committed itself to putting $35 billion, or Rs 2,10,000 crore, in the country's public- and private-sector projects over the next five years, Prime Minister Narendra Modi promised he would introduce special mechanisms like "Japan Fast Track Channel" for Japanese investors here.

The investments from that country are expected to be in Modi's pet projects, such as cleaning of the Ganga, high-speed trains, building smart cities, etc.

An admirer of Japanese society, Modi also took time from his official engagements to visit an elementary school in Tokyo to "learn strategies" that he said could help "bring modernity, moral education and discipline" to India's primary education system.

The prime minister's five-day visit to Japan, his first bilateral trip outside the subcontinent, has been marked by rare warmth and rarer protocol gestures by his Japanese counterpart, Shinzo Abe, since Modi landed in Kyoto on Saturday afternoon. While Modi termed Abe "an old friend", their joint statement, or the 'Tokyo Declaration', referred to their meeting as "the dawn of a new era in India-Japan relations".

However, both Modi and Abe, seen as two important nationalist leaders of Asia, acknowledged the shadow of an "expansionist" China, albeit in a veiled way, in their statements and discussions. Modi told a gathering of business leaders how the world was divided into two camps - one that pursued "expansionist policies" and the other that believed in development. He didn't name either China, or Japan's other expansionist neighbour, Russia. But, at a joint press interaction, he termed India and Japan two peace-loving democratic nations.

To the business leaders, Modi said: "All around, we see 18th century expansionist policies being followed... Encroaching borders, occupying seas or capturing entire countries will not lead to development of mankind in the 21st century. If Asia has to lead, India and Japan will have to come together and take the development agenda to greater heights."

While India shares a disputed border with China, Tokyo's ties with Beijing have been tense over a dispute on border islands. A nationalist agenda over the latter issue helped Abe win an election towards the end of 2012 and later loosen constraints over Japan's post-World War II Pacifism. Incidentally, Modi is to receive Chinese President Xi Jinping later this month in New Delhi.

The 'Tokyo Declaration', released after the talks at Akasaka Palace (State Guest House), announced the India-Japan relations now stood elevated from 'strategic and global partnership' to 'special strategic and global partnership'. Modi stressed this wasn't "just a play of words" but a "decision that reflects solemn responsibilities".

As for brass tacks, the two sides agreed to expedite sale and transfer of technology of Japanese US-2 amphibious aircraft to the Indian Navy. The two leaders acknowledged "significant progress" in the elusive nuclear energy cooperation and Abe commended India's efforts in the field of non-proliferation, including the affirmation that goods and technologies transferred from Japan would not be used for WMD (weapons of mass destruction) delivery systems.

The two leaders also affirmed their shared commitment to "maritime security, freedom of navigation and over-flight, civil aviation safety, unimpeded lawful commerce, and a peaceful settlement of disputes in accordance with international law," the joint statement said. Abe and Modi also sought to upgrade the format of their security cooperation discussions, and hold regular maritime drills.

Modi appreciated the Japanese government's decision to remove six of India's space- and defence-related entities, including Hindustan Aeronautics Ltd, from its banned list. These entities, banned after the 1998 nuclear tests, could now enter into technology-transfer agreements with Japanese companies.

Modi underlined his determination to further improve the business environment in India, including through tax, administrative and financial regulations, to boost investment. The two leaders also shared the intention of developing "Japan Industrial Townships" and other industrial townships with investment incentives for companies that would not be less than those provided under the policy framework for special economic zones and national investment and manufacturing zones.

"To make the PMO more efficient, we have adopted the Japanese management system. Training is already underway under the Kaizen system (of management)," Modi said, adding this was to bring the Japanese efficiency, at least in his office. "Being a Gujarati, commerce is in my blood.

Businesses do not need concessions. They only need an environment to grow. It is the responsibility of the government and its leader to frame policies in a way that things start moving. If policy decisions are in place, there can be no discrimination; all would get equal treatment," Modi said.

SETTING THE BALL ROLLING

• $35 billion: The amount Japan intends to invest in India over 5 years, in infra projects like cleaning Ganga and smart cities
   
• Navy: Sale of Japanese US-2 amphibious aircraft to India to be expedited
   
• Railways: Japan to assist in the Mumbai-Ahmedabad high-speed rail
   
• N-talks: Inking of the civil nuclear cooperation agreement to be sped up
   
• Indian firms: Six entities, including HAL, removed from Japan's banned list
   
• Industrial townships: Modi offers to set up 'Japan Industrial Townships'