India is Safe for Japanese Money, Market Good for Low Price Japanese Goods

Japan Opens Doors to Indian Engineers to Lower Costs

Maruti-Suzuki and Honda in the auto sector are the showing examples of Japan in India. There are many failures too in manufacturing. Sony and Toyota are the prominent cases. The DMIC for $14.5bn and Rail Freight Corridors along the Delhi-Mumbai and Delhi-Howrah track are based on liberal Japanese finance. The Japanese Shinkansen (Bullet) High Speed Rail system is relevant in the light of Modi advocacy of Bullet Trains between Ahmedabad and Mumbai. Buddhism is the key link between India and Japan.

India’s ‘Look East’ policy since the Narasimha Rao Government of 1992 posited Japan as a key partner. Since 1986, Japan has become India’s largest aid donor, and remains so.Relations between the two nations reached a brief low in 1998 as a result of Pokhran-II, an Indian nuclear weapons test that year. Japan imposed sanctions on India following the test, which included the suspension of all political exchanges and the cutting off of economic assistance. These sanctions were lifted three years later. Japanese prime minister, Shinzo Abe was the chief guest at India’s 2014 Republic Day parade.

Given Abe’s strong admiration for India, his friendly ties with India’s new premier and his urge to bolster the India-Japan strategic and global partnership, Modi’s forthcoming visit is likely to bring about a major transformation in India-Japan relations in the changing complex Asian geopolitical and geo-economic scenario.

Japan is currently India’s fourth largest source of foreign direct investment; Japanese companies have made cumulative investments of around $2.6 billion in India since 1991. The 2007 annual survey conducted by the Japan Bank for International Co-operation (JBIC) ranked India as the most promising overseas investment destination for Japanese companies over the long term. In recent years, Japan has assisted India in infrastructure development projects such as the Delhi Metro Rail Project. Both sides are discussing the Delhi-Mumbai Industrial Corridor Project and Dedicated Freight Corridor Projects on the Mumbai-Delhi and the Delhi-Howrah routes. The Japanese government has also expressed interest to help establish a Chennai-Bangalore Industrial corridor and a Dedicated Freight project in the south, connecting the cities of Bangalore and Chennai.

India is also one of the only three countries in the world with whom Japan has security pact, the other two being Australia and the United States. As of March 2006, Japan was the third largest investor in India with an estimated total investment of US$2.12 billion.

Kenichi Yoshida, a director of Soft bridge Solutions Japan, stated in late 2009 that Indian engineers were becoming the backbone of Japan’s IT industry and that “it important for Japanese industry to work together with India.” In November 2009, the Japanese steel manufacturer JFE Steel agreed to partner with JSW Steel, India’s third-largest steel producer, to construct a joint steel plant in West Bengal.

During Prime Minister Manmohan Singh’s visit to Japan in 2010, both countries agreed to foster increased business exchanges, people-to-people contact and signed a memorandum of understanding to simplify visa procedures for each other’s citizens. Under the memorandum, any Japanese coming to India for business or work will be straightway granted a three-year visa and similar procedures will be followed by Japan. Other highlights of this visit includes abolition of customs duties on 94 per cent of trade between the two nations over the next decade. As per the agreement, tariffs will be removed on almost 90 per cent of Japan’s exports to India and 97 per cent of India’s exports to Japan.

On 26 October 2010, Japan and India concluded negotiations on a bilateral Comprehensive Economic Partnership Agreement(CEPA).

Starting from July 3, 2014 Japan issues multiple entry visas for the short term stay of Indian nationals.

India has figured as one of the most attractive destinations for Japanese investments in recent surveys conducted by the Japan External Trade Organization. The number of Japanese companies operating in India is increasing rapidly. From 267 in 2006, the number has increased to around 1,800 in 2013 - more than six fold in seven years.

In 2011, Abe opined that the two states would gain significantly from economic complementari-ties such as India’s growing market of more than 1.2 billion people and Japan’s search for new markets, Japan’s strength in hardware and India’s in software, and India’s huge infrastructural and energy needs and Japan’s technological expertise.

India can offer Japan, the world’s largest pool of skilled manpower. Abe also views that the pattern of relations among the U.S., Japan and India as of crucial importance in the context of the emerging security architecture in Asia.