Mr Modi's turn east

Strategic economic vision means the wooing of China and Japan

It has long been believed that Prime Minister Narendra Modi is more comfortable dealing with Asian governments and businesses. China and Japan, in particular, are two countries with which Mr Modi has engaged personally as former chief minister of Gujarat. He visited both more than once well before he became prime minister. While the West, relatively strapped for cash and focused on recovering its own economies, can offer India little, there are pools of investible resources on the Pacific Rim the prime minister will be anxious to tap. This "turn east" for Indian commercial and industrial policy was underlined by two separate but thematically connected developments last week: the invitation to, or a proposed memorandum of understanding with, China to set up industrial parks in India; and news that the Japanese garments giant Uniqlo would likely source clothes from India. Among the very few visiting dignitaries the prime minister took time out to meet in his first month was Uniqlo Chairman Tadashi Yanai.

These are both welcome moves. Industrial parks in co-operation with China have been in the works for some time - they were conceived during the United Progressive Alliance government as a way of reducing the bilateral trade deficit. It is also a politically significant move, however. It seeks to engage more with the world's second largest economy and develop positive facets to a relationship so far focused on strategic rivalry and lopsided trade. Ideally, border tensions and strategic concerns should be bracketed as a separate set of issues, different from commercial co-operation. Nor should disputed trade practices - for example, accusations of dumping or the underpricing of Chinese imports to India - affect co-operation across the board. These should, instead, be dealt with under the appropriate laws and international treaties. Yes, concern about strategic exposure - for example, an excessive dependence on China for telecom and power equipment - should not be set aside. But the logic of industrial parks is different. They make use of Chinese capital and manufacturing expertise without creating excessive dependency. Watchfulness is necessary, but there is no prima facie danger from closer co-operation in this sphere.

If the strategic relationship with China is fraught and needs improvement, that with Japan is full of potential and merely needs more attention. It is unfortunate that the prime minister had to postpone his trip to Japan - it is to be hoped that the country, to which such gestures of respect matter a great deal, continues to be patient while India gets its act together. It is in this context that the Uniqlo announcement about setting up stores in India and also sourcing from here is significant. Not only does it introduce into India a major international low-cost but high-quality brand, but it also fits in with the prime minister's major priority - to energise hitherto moribund high-employment, labour-intensive manufacturing sectors like textiles. But in general it also serves as a first step to get more Japanese companies to invest in India. New Delhi should use its strong political links with the Shinzo Abe government in Tokyo to economic advantage. India's strategic future under Mr Modi is increasingly likely to be shaped by commercial and developmental necessity - and that is why India will turn east.