1. Despite recession, the bilateral trade in 2008 has been increased by as much as 25 per cent, to nearly $13 billion. It sets a good trend towards the improving trade relations. Although the target for 2010 has been pitched at $20 billion which, though constituting a 54 per cent increase in the turnover figure, compares abysmally with the corresponding China-Japan figures ($102.8 billion in the first half of 2009).2. As regards foreign direct investment, however, for the first time, India has become more attractive to the Japanese investor than China. In 2008-09, Japanese investments in India were 809 billion Yen as against 679 billion Yen in China. This has been bolstered by two big deals — the Tata-Docomo tie-up and the Daiichi Sankyo deal with Ranbaxy.
3. Infrastructure will certainly be given a big boost (through the freight and industrial corridor projects) as also perhaps in the power sector. Indian exporters too will have to get their rightful due by boosting their sales in Japan (of pharmaceutical products, for example).
4. Auto companies such as Suzuki, Toyota and Nissan are looking at expanding their production capacities in India. Besides auto, even pharma and telecom have started showing interest in the Indian market. For instance, acquisition of India pharma major Ranbaxy by Japan’s Daiichi Sankyo marks latter’s entry into the growing Indian pharmaceutical market. Similarly, NTT Docomo picked up 26 per cent stake in Tata Teleservices with a view to grab a pie of the fast growing telecom market in India.
5. Recently, Japan National Tourism Organisation (JNTO) defined India as a priority market for 2010-11 along with Russia and Malaysia. In 2009, Japan saw around 67,323 visitors from India compared to 53,000 in 2004, which is miniscule when compared
with visitors from Taiwan, China and the US. On the other hand, number of Japanese who visited India increased to 1.45 lakh from 96,000 in 2004.
6. The Japanese foreign direct investment (FDI) in India has trippled to $5.4 billion (nearly Rs 25,160 crore) in 2008 from $1.78 billion (nearly Rs 8,290 crore) in 2007, overtaking the Japanese FDI in China.
7. The number of Japanese companies investing in India has more than doubled in the past three years from 267 in 2006 to 627 companies in 2009.
8. Japan has offered to provide bullet train technology to the Indian Railways in its quest to build the Western Dedicated Freight Corridor project from Rewari in Haryana to Vadodara in Gujarat.
9. Both sides decided to work to conclude the Comprehensive Economic Partnership Act at the earliest. Twelve rounds of talks have been held so far.
10. FDI from Japan has increased more than ten times from $85 million in the financial year 2007 to $950 million during April-October 2009-10. In order to encourage more inflows, the study suggets that India should take measures like the setting up of a regulatory body to check spurious products from entering the market. It is necessary to have a vigilant regulatory body to check cheap and spurious products from entering the market. This will give a fillip to Japanese investors.
Major obstacles:
It is now hampered by stiff non-tariff barriers put up by the Japanese. There and other issues, such as the rules governing the issue of visas, diluting the withholding tax, easing regulations binding high-technology exports for dual use, etc., will have to be tackled by the Comprehensive Economic Partnership Agreement (CEPA).Joint Statements Action Plan to advance Security Cooperation based on the Joint Declaration on Security Cooperation between Japan and India
1. Strengthening Cooperation on Issues of Common Strategic Interest:
• Consolidate the Global and Strategic Partnership;
• Enhance information exchange and policy coordination on security issues in the Asia Pacific region and on long term strategic and global issues on the basis of the Joint Declaration on Security Cooperation;
• Promote open, transparent and inclusive regional cooperation in Asia, in both economic and security fields;
• Pursue bilateral cooperation in existing multilateral frameworks in Asia, in particular the East Asia Summit, ASEAN Regional Forum (ARF) and Regional Cooperation Agreement on combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) processes
2. Strategic Cooperation Mechanisms:
• Annual Strategic dialogue at Foreign Minister-level;
• Regular Consultations between National Security Advisor of India and Japanese Counterpart;
• Annual Subcabinet/Senior Officials 2+2 dialogue (Ministry of Foreign Affairs and Ministry of Defence of Japan / Ministry of External Affairs and Ministry of Defence of India);
• Foreign Secretary / Vice Minister level Dialogue (Basically twice a year);
• Foreign Office Consultations (Basically once a year);
• Annual Comprehensive Security Dialogue at the level of Joint Secretary, Ministry of External Affairs (MEA) and Ministry of Defence (MOD) of India / Director General, Ministry of Foreign Affairs (MOFA) and Ministry of Defence (MOD) of Japan;
• Maritime Security Dialogue and Annual Track 1.5 Strategic Dialogue;
• Consultation on regional issues between Foreign Office and Embassy at Capital Basis.
3. Defence Cooperation:
• Regular meetings between the Ministers of Defence;
• Annual bilateral naval exercises, alternately off India and Japan, to enhance cooperation and core capabilities for maritime operation and disaster relief; Passing Exercise (PASSEX) during ship visits
•The two Coast Guards will continue to promote cooperation to ensure maritime safety, maritime security and to protect marine environment through joint exercise and meeting between the two Coast Guards according to the Memorandum on Cooperation between the Japan Coast Guard and the Indian Coast Guard. The two Coast Guards will implement concrete measures based
on the bilateral coordination and agreement on subjects such as the content and timing of such cooperation.
• Shipping Policy Forum to be conducted between Ministry of Land, Infrastructure, Transport and Tourism (MLIT) of Japan and Ministry of Shipping of India, with participation from the private sector
4. Information Exchange and cooperation in fight against terrorism and other transnational crimes;
• Mechanism for intelligence exchange and technical cooperation on counter terrorism such as Joint Working Group on Counter terrorism, including intelligence exchange and technical cooperation, led by MEA of India and MOFA of Japan, with participation from concerned Government Agencies;
• Establishment of information exchange framework between the two Financial Intelligence Unites (FIUs) on money laundering and terrorist financing.
5. Cooperation at the United Nations:
• Regular dialogue and cooperation on UN reform, including early realization of permanent membership of the UN Security Council of India and Japan, at the level of Deputy Vice Minister, MOFA/ Additional Secretary, MEA;
•Regular Dialogue and cooperation on UN peacekeeping operations, including exchanges between Japanese Central Readiness Force / International Peace Cooperation Activities Training Unit and Centre for UN Peacekeeping (CUNPK) / Units experienced in peacekeeping operations from India, training of Japanese officers at the CUNPK, and sharing experience in and information on UN Peacekeeping operations and peace building. 6. Disaster Management:
• Cooperation to develop Tsunami Disaster Map of India between MLIT of Japan and Ministry of Home Affairs (MHA) of India;
• Cooperation to expand the capability of Asian countries to advance their ability to provide a rapid, coordinated and effective Disaster response through an active participation in the next ARF Field Exercise to be held in Indonesia in 2011;
• Capacity Building through the Workshop on Water-related Disaster management conducted by the International Center for Water Hazard and Risk Management (ICHARM) of Japan;
• Sharing experience in landslide disaster prevention between National Institute of Land and Infrastructure Management (NILIM) , Public Works Research Institute (PWRI) of Japan and National Institute of Disaster Management (NIDM) of India;
• Capacity Building for disaster management and sharing Japanese experience on disaster relief through training programmes conducted by Japan International Cooperation Agency (JICA);
• Dialogue between National Disaster Management Authorities (NDMA) of India and Cabinet Office of Japan through Asian Disaster Reducing Centre (ADRC) for sharing information on disaster prevention and preparedness;
• Participation as observers in Japan’s nationwide disaster management drill;
• Sharing of disaster-related information between Japan Aerospace Exploration Agency (JAXA) and Indian Space Research Organisation (ISRO) through “Sentinel Asia” process.
7. Cooperation on disarmament and non-proliferation: Both welcomed the renewed international attention to and confirmed their commitment to the total elimination of nuclear weapons. Prime Minister Hatoyama stressed the importance of bringing into force the Comprehensive Nuclear Test Ban Treaty (CTBT) at an early date. Prime Minister Singh reiterated India’s commitment to a unilateral and voluntary moratorium on nuclear explosive testing. The two Prime Ministers supported the immediate commencement of negotiations in the Conference on Disarmament and an early conclusion of a Fissile Material Cut-off Treaty (FMCT). They also supported the strengthening of international cooperation with a view to addressing the challenges of nuclear terrorism and clandestine proliferation.
Both countries have reaffirmed that India and Japan as partners which share common values and strategic interests, will develop the Strategic and Global Partnership further for the deepening of their
bilateral relations as well as peace and prosperity of the region and the world. DFC: Both countries have welcomed the commencement of India-Japan cooperation on the Western Dedicated Freight Corridor (DFC) Project with the signing of the Exchange of Notes for the Engineering Services Loan for the first phase (Rewari - Vadodara sector) in October 2009 in New Delhi, and reaffirmed their commitment to the early realization of the entire Western corridor utilizing Japan’s Special Terms for Economic Partnership (STEP) scheme, which is expected to contribute to the further enhancement of India-Japan economic relations. Both sides also welcomed the commencement of the preliminary survey for the second phase, and will make utmost efforts for early completion of both phases of the corridor in a parallel manner. The two leaders will also work together for conclusion of the agreement for the Main Loan for the first phase by March 2010 and for commencement of the assistance for the second phase at the earliest in 2010. Both sides will strive for early finalization of a funding and implementation schedule for the whole Western Corridor.
IITH:
India has expressed their satisfaction with the steady development of the collaboration in the establishment of Indian Instituteof Technology, Hyderabad (IITH) and reiterated their commitment to collaborate through various contributions from Japan including through Official Development Assistance. They noted with satisfaction that the Japanese side has established the IITH Consortium consisting of government, academia and industry.
JETRO: The decision to establish a JETRO Chennai office which would accelerate further investment by small and medium-sized Japanese enterprises to India has been seen as a big intiative.
Energy Dialogue: The two Prime Ministers welcomed the enhanced bilateral cooperation on energy under the India-Japan Ministerial-level Energy Dialogue, particularly in energy efficiency and conservation sectors as well as the coal and power sectors. The two Prime Ministers stressed the need for accelerating bilateral cooperation in these vital areas and expressed strong expectations for the progress to be achieved in the next Ministerial-level Energy Dialogue in New Delhi. The two Prime Ministers shared the view that nuclear energy can play an important role as a safe, sustainable and non-polluting source of energy in meeting the rising global energy demands. They also noted that under the Energy Dialogue the Energy Ministers will exchange views and information on their respective nuclear energy policies. The two Prime Ministers also recognized the importance of promoting cooperation between the two countries’ industries in order to expand bilateral energy cooperation on a commercial basis. In this regard, they welcomed progress achieved under the India- Japan Energy Forum held by The Energy and Resources Institute (TERI) of India and the New Energy and Industrial Technology Development Organization (NEDO) of Japan.
UN Security Council: The two Prime Ministers reaffirmed their resolve to realize a comprehensive reform of the United Nations (UN) Security Council, especially its expansion in both permanent and non-permanent categories. They welcomed the progress so far achieved in the intergovernmental negotiations in the UN General Assembly, in which an expansion in both categories has commanded the most support from Member States. The Prime Ministers decided to accelerate their efforts, in close cooperation with the G4 and other like-minded countries, with a view to achieving a meaningful result during the 64th Session of the General Assembly, so as to make the Security Council more representative, credible and effective for meeting the challenges of the new century.
Terrorism: The two Prime Ministers reiterated the condemnation of terrorism in all its forms and manifestations, committed by whomever, wherever and for whatever purpose. They reaffirmed the importance both countries attach to counter-terrorism cooperation in the United Nations, and affirmed to continue working towards the finalization of the Comprehensive Convention on International Terrorism. Prime Minister Hatoyama expressed strong condemnation of the terror attacks in Mumbai last year. The two Prime Ministers emphasized the utmost importance of bringing the perpetrators of the terrorist attack to justice. Japan expressed its support for India’s efforts to become a member of the Financial Action Task Force (FATF). At the bilateral level, they underlined their determination to strengthen co-operation through the Joint Working Group on Counter-Terrorism.
CEPA:
Both the countries have welcomed the decision of the EAS Economic Ministers to task the Senior Economic Officials to discuss and consider the recommendations in the Phase I and II reports on Comprehensive Economic Partnership in East Asia (CEPEA). The two Prime Ministers welcomed the efforts by Economic Research Institute of ASEAN and East Asia (ERIA) for promoting economic growth in East Asia, focusing on such areas as facilitating sub-regional development, expanding the middle class and stimulating consumer market, and for working with the ADB and the ASEAN Secretariat to accelerate the completion of a “Comprehensive Asian Development Plan” in order to enhance the connectivity of the region. CEPA will be critical as a facilitator of greater Indian economic activity in the Japanese market. The CEPA is expected to further trade between the two countries, especially in areas of urban infrastructure, high technology, and renewable and energy efficient technologies. According to Indian official figures, the twoway trade for 2008-09 stood at $10.6 billion, with imports accounting for $7.6 billion. Comparatively, India- China trade is over $40.6 billion. Japanese assistance for Sahara project:The Sahara group plans to convert its Aamby Valley City, in Lonavala near Pune, into an environment and energy-efficient model for the world in cooperation with Japan.
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