New bilateral relationship has been given shape
The massive commitments Japan has made to India, and which were inked during Prime Minister Shinzo Abe's recent visit to this country, demonstrate Tokyo's faith in the India Growth Story helmed by Prime Minister Narendra Modi. It has also placed a big responsibility on India to leverage the occasion and make optimum use of this outreach of trust. Japan is not known to throw good money after bad, and the investments it has made in other countries have invariably turned around the economy of the beneficiaries because the latter did the right things.
For instance, Japan pumped in more than $430 billion into China in the first half of the 1990s, when China was struggling to attract foreign investment in the wake of the Tiananmen Square episode. Japan's helping hand contributed a great deal to China's resurgence. Similarly, Japan reached out to ‘Asian Tigers' such as Singapore, South Korea, Taiwan, Malaysia and Indonesia, by pledging huge sums to develop their infrastructure and other primary sectors. Needless to add, all these nations benefitted significantly from Tokyo's initiative.
Now it's India's turn. While several agreements have been signed between the two countries, the most important ones, both from the economic and strategic interest perspective, are the pacts for a high-speed train service (the Bullet Train, in popular language) for which $12 billion has been promised; a $12.4 billion finance to boost the Indian Government's Make in India programme; the long-anticipated civil nuclear deal; and, defence cooperation (in which transfer of technology is a key component). Of course, these commitments come in the wake of the excellent personal relations that the Prime Ministers of the two countries share, but it would be naïve to assume that Tokyo would agree to such heavy investments merely on the basis of personal equations. It truly believes that India has the potential to make a dramatic makeover. Japan was scouting for nations where it could invest and be assured of decent returns, and it found India on the cusp of change with a new leadership in place in New Delhi. In taking the decision to put its money in India, Japan believes it has taken a wise decision.
It's true that Japan has made significant changes in its outlook in a bid to reach out to countries such as India. It has, for instance, junked its earlier apprehensions on the civil nuclear deal prompted by its experience of being bombed by atomic weapons and of the more recent Fukushima-Daiichi disaster. The finalisation ‘in principle' of the agreement, which means Japan will now sell nuclear material to India, shows Japan's trust in India's ability and commitment to use nuclear energy for peaceful purposes.
A similar faith is evident in Tokyo's decision to transfer cutting-edge defence technology to this country. On its part, India has responded in a befitting measure: It has virtually welcomed Japan's new-found military assertiveness and its reach overseas. It has also endorsed Japan's position on the freedom of navigation in South China Sea — something that has already deeply upset China, with its Foreign Ministry spokesperson advising countries “outside the region” to not meddle in the affairs of the “regional countries”. But that is unlikely to weaken either India's or Japan's resolve.