JIN-428 -- India-Japan Relations

[jin at mailman.japaninc.com]

The 'JIN' Japan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 428 Wednesday August 22, 2007 TOKYO

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India-Japan Relations

If Mr. Abe has gone to India to escape the heat, he is probably
in for a disappointment, although he is at least out of the
political heat back home for a while. But what is Mr. Abe doing
there and what does this visit mean for the alleged convergence
in India-Japan relations?

Certainly, relations between Japan and India have been warming up
over the last few years for at least three reasons:

1. Mutual concern over Chinese military expansion

2. Increased awareness of common political and economic systems

3. Energy security

All of these relate in part to the Shanghai Cooperation
Organization (SCO)—an institutional arrangement to foster
security cooperation between China, Russia and five states from
Central Asia. It has also become a forum for energy cooperation
and is often perceived as an exclusionary, potentially
revisionist institution. Although India is an observer, it is not
fully included and has also been encouraged by the US to look
more towards Japan, Australia and South Korea. And India has its
own reasons for wishing to do so too—in Japan it finds a power
from which it can gain technology and, potentially, weapons.
For Japan, India is  another source and ally related to its
struggle for energy resources. Both powers seek a more active
political role in the region and given their common concerns,
but different interests, there is substantial room for
cooperation. India arguably has its relationship with Japan to
thank for its inclusion in the East Asian Summit. While Japan
will be looking for support from New Delhi for its ambitions in
the United Nations and regional multilateral institutions.

For Abe, whose ideology is close to US neoconservatives, India's
democratic credentials have an appeal and the Joint Statement,
issued after the visit of Indian PM Dr. Manmohan Singh visited
Japan in 2006, made solid commitments to 'strategic global
partnership': cooperation on security projects such as piracy and
terrorism, as well as planning for 'a goodwill exercise' between
Japan's Maritime Self Defense Force and the Indian Navy. The US,
aware of the geopolitical benefits of boosting Indian-Japan
defense relations will be hoping that these developments will be
built on during the current visit. For its part, India will also
be looking to gain Japanese approval for its plans to enter into
a civilian nuclear power agreement. The one major blip in
relations between the two in recent history was when India went
nuclear in 1998, and Tokyo imposed sanctions. PM Singh will want
to treat this issue with sensitivity as he needs Japan's support
in the Nuclear Supplier Group.

In reality, however, economic motives account for much of the
political good will. Crucially, Singh will be wanting to attract more
Japanese FDI for infrastructure projects. According to the Indian
embassy in Japan, between 2005 and 2006 Japanese FDI into India
doubled to a total of just under 60 billion yen. In terms of
portfolio investments, Japan-based banks have upped their
involvement: Nomura's Indian Security Investment fund is leading
the way with US$107.7 million worth of assets. (See more details:
http://www.in.emb-japan.go.jp/Japan-India-Relations/
JapanActiveEngagement2007.html )

Singh will no doubt be asking Abe to push for more FDI and
encourage funds by providing further guarantees on export finance
and urge institutions such as the Japan Bank for International
Cooperation (JBIC) to fund more projects such as metropolitan
transport systems—it has already loaned money for projects in
Kolkata and Bangalore. Japan is also involved in financing the
construction of new sea ports on the west coast. Increasingly,
Japan is beginning to see the Indian market as an opportunity,
and improving economic relations there as hedging against a
deterioration in Sino-Japanese relations.

Beyond the macro level, Abe will be meeting selected delegations
of business people and will also be discussing regulatory issues.
India and Japan have a bilateral trade of over US$6.5 billion and
their is a good history of commerce between the two. Indian
businesses, particularly in the IT sector in Japan have made
great strides breaking into the market here in the last decade,
and, according to the India IT Club of Japan,  there are
almost 100 Indian businesses operating in Japan today. In India,
Japan has also long had businesses in the market—Suzuki has been
trading there since 1985. Shinsei bank also employed an Indian
company to carry out a major cost cutting initiative in switching
reliance on its expensive mainframe computers to open source
systems (see Japan Inc No.65 for more details:
http://www.japaninc.com/article.php?articleID=1466)

In an interview with us about the recent top level visit, Harsh
Obrai, President of Kitatec and Director of Strategy at the India
IT Club Japan ( www.indiaitclub.com) told us that he believes that
Japanese companies are 'not taking advantage of the possibilities
in the Indian market. JETRO and other organizations have done
well in educating Indians in both Japanese language and culture,
however, these skills are not being fully exploited.' While he
sees high level visits as important in creating the right
political and regulatory environment, he says it is up to
companies, on both sides, to take the plunge and enter into
more serious commercial dialogue.

At the cultural level, interaction between the two countries has
had some notable exchanges. Most importantly, Buddhism started
in India and its Japanese form still bears the marks of this heritage.
Lokesh Chandra, Director of the International Academy of India
Culture reminds us that there are multiple temples and shrines in
Japan featuring Hindu deities, most commonly Ganesha, and,
pagodas, such as that at Senso-ji, in Asakusa are based on
ancient Indian design. In more modern times, the number
of Indian restaurants in Japan has increased dramatically,
although an interesting article in The Hindu hints that sushi has
had a slower start in India. See:
http://www.hindu.com/mp/2004/11/27/stories/2004112701440300.htm

With 2007 being India-Japan Friendship Year the good will on both
sides is at a peak and it is likely that the meeting this week will
cement ties even further.

By Peter Harris
Chief Editor, J at pan Inc magazine

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++EVENTS
------------------- Tokyo Sinfonia--------------------

Under director Robert Rÿker
Tokyo Sinfonia, Tokyo's premier chamber orchestra, is to
treat audiences to a series of performances at Oji Hall, Ginza:

14th September - Symphonies for Strings - Beethoven
Grosse Fugue for Strings, Op. 133
Symphony in C Major (from Op.29)

12th December - Symphonies for Strings - Mozart
Adagio and Fugue for Strings, KV 495
Symphony for Strings in D Major (from KV.593)

Place: Oji Hall, Ginza
Price: Y6000 (single) Y10,000 (pair)
Email: tokyosinfonia at gol.com
Tel: (03) 3588 0738
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Entrepreneur Association of Tokyo - Tuesday, September 4th

Speaker: Patrick Newell - Co-founder and Vision Navigator
of the Tokyo International School

September's seminar will take you to Tokyo International
school to witness first-hand the entrepreneurialism and
creativity to be found at one of Tokyo's and the world's
leading international schools.

Patrick will share how he has realized his dreams during
the past 10 years, his learning model valid for any
organization, vision for schools during the next 10 years
and how the collaborative spirit of Wikinomics is changing
corporations, industries and communities.

Date/Time: Tuesday, September 4th - 7:00 pm
Location: Tokyo International School
Language: English
Website: http://www.ea-tokyo.com
Email: info at ea-tokyo.com
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RidgeRunner Niseko
International Cricket Competition 15-17 September 2007

This is your invitation to three days of fun at an
international cricket tournament in Niseko being held to
the benefit of the Tyler Foundation for Childhood Cancer.

Cricketing legend Dennis Lillee will be attending the event
which is being co-hosted by the Higashiyama Prince Hotel and
includes two days of cricket, a golf match, charity
dinner dance and auction.
For more information, and the chance to win a
dinner with Dennis,

please visit www.ridgerunner.jp/cricket
or contact Simon Jackson
(simon at rad-development.com, 011-876-3704)
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Start a Company in Japan

Entrepreneur's Handbook Seminar 6th of October, 2007

If you have been considering setting up your own company,
find out what it takes to make it successful.
Terrie Lloyd, founder of over 13 start-up companies in Japan,
will be giving an English-language seminar and Q and A on
starting up a company in Japan.
This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally answered
in business books.
All materials are in English and are Japan-focused.

For more details: http://japaninc.com/terrie_lloyd/
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