Abe visit: India, Japan draw closer

Japanese Prime Minister Shinzo Abe’s visit to India resulted in the two sides signing 15 agreements in a variety of sectors, including civil aviation, nuclear energy, trade and science and technology. These are expected to enhance co-operation between the two Asian powers. During the visit, he and Prime Minister Narendra Modi launched work on the Ahmedabad-Mumbai bullet train. The project has understandably generated much excitement in India. The bullet train project is expected to speed up the modernisation of India’s creaking railway system. Additionally, it could boost infrastructure development in India’s fast-growing western industrial region.

But excessive hype over the bullet train has eclipsed another, more ambitious India-Japan project: the Asia-Africa Growth Corridor. This $40 billion initiative will see Delhi and Tokyo working together to improve connectivity between Asia and Africa as well as build infrastructure, capacity and healthcare facilities in Africa. Aimed at countering the influence China seeks to gain through its Belt and Road Initiative, the Asia-Africa Growth Corridor will deepen India-Japan co-operation even as it enhances Delhi and Tokyo’s influence on the two continents. Clearly, India and Japan are dreaming big. Concerns over China’s territorial and geopolitical ambitions and its rapid rise have pushed Tokyo and Delhi closer to each other. But wariness of China isn’t the only reason for their co-operation. India is looking to Japan for infrastructure development and technology, and Tokyo is willing to provide these on reasonable terms. Consider the Ahmedabad-Mumbai bullet train, for instance. Japan is loaning India $17 billion towards the project, and on generous terms — India will need to repay the loan over a 50-year period at a nominal interest of 0.1%.

Much has been made of how well Modi gets along with Abe. Indeed, the bonhomie was on display during Abe’s visit. However, India-Japan relations are not doing as well as the Modi government would have us believe. Since 2014, when Modi took over the reins as prime minister, India’s trade with Japan has declined. Bilateral trade fell from $18.61 billion in 2012-13 to just $13.48 billion in 2016-17. The Modi government needs to address the reasons behind the decline in trade with such a close ally. Japanese investment in India was $4.7 billion in 2016-17, an 80% increase over the previous year. While this is heartening, several Japanese projects in India are yet to get off the ground. Bureaucratic red tape has stood in the way of these projects. The Modi government must remove these roadblocks if it is keen to see Japanese investment in India grow further. Roadshows are a fun way to entertain a visiting dignitary but it is focused hard work and timely completion of projects that will impress the Japanese.