India-Japan relations

India-Japan relations have undergone a significant and qualitative shift in

recent years, propelled by the successful regular summit level exchanges. Former
Prime Ministers Koizumi and Abe visited India in April 2005 and August 2007
respectively. Prime Minister Dr. Manmohan Singh visited Japan in December 2006
and again in October 2008. This process was continued by Dr. Hatoyama, who
visited India for the annual summit on 27-29 December 2009, about three months
after taking over as Japan’s Prime Minister.

The establishment of the Strategic and Global Partnership between India and
Japan in December 2006 has elevated relations to a new level. This Partnership is
based on five pillars of cooperation viz., Political, Defence and Security Cooperation;
Comprehensive Economic Partnership; Science & Technology Initiative; People-to-
People exchanges and cooperation in Regional/Multilateral fora. During the visit of
PM Abe to India in August 2007, a Roadmap for New Dimensions to the Strategic
and Global Partnership was unveiled. A Joint Statement on the Advancement of the
Strategic and Global Partnership and a Joint Declaration on Security Cooperation
were issued during PM’s visit to Japan from 22-23 October 2008. During Prime
Minister Hatoyama’s visit, the two sides released a Joint Statement on the New
Stage of India-Japan Strategic and Global Partnership and an Action Plan to
advance India-Japan Security Cooperation. These political documents provide the
basis for all-round development of India-Japan partnership.

Leaders of India and Japan meet frequently on the sidelines of international

events. Soon after taking over as Prime Minister of Japan from Dr. Hatoyama,
Japan’s Prime Minister Naoto Kan met with Prime Minister Singh on the margins of
the G-20 Summit in Toronto on 27th June 2010. There are a number of official
dialogue mechanisms between India and Japan, covering a range of subjects,
including Ministerial-level dialogue mechanisms like Strategic Dialogue between
External Affairs Minister and Japan’s Foreign Minister, Policy Dialogue between
Commerce and Industries Minister and Japan’s Minister of Economy, Trade and
Industry and Energy Dialogue between Deputy Chairman of the Planning
Commission and the Japanese Minister of Economy, Trade and industry. All
Ministerial Dialogues were held in New Delhi in the calendar year 2010. In addition,
during Ralska Mantri’s visit to Japan in November 2009, the two sides agreed to
have annual exchange of visits at the level of Defence Ministers. Accordingly,
Japan’s Defence Minister Mr. Toshimi Kitazawa visited India on 30 April-1 May 2010.
There have been other high-level visits and exchanges between India and Japan in
2010. The sharp jump in such exchanges has also been accompanied by more
broad-based interaction between parliamentary delegations and provincial and local
governments of both countries.

There are several dialogues between India and Japan at senior official level
covering specific issues of foreign policy, defence and security policy, economic
cooperation, urban development, ICT cooperation, energy cooperation, high
technology trade etc. A new 2+2 dialogue led by Foreign and Defence Secretaries of
India and their Japanese counterparts was announced during the Annual Summit of
2009 and held its first meeting in New Delhi in July 2010.

As part of India-Japan Strategic and Global Partnership, the two sides have
launched a Special Economic Partnership Initiative (SEPI), which has several high-
visibility flagship projects like Western Corridor of the Dedicated Freight Corridor
(DFC) and the Delhi-Mumbai Industrial Corridor (DMIC). The total volume of
Japanese ODA loan for the first phase of the Western Corridor is expected to be
about 405 billion Yen. Delhi-Mumbai Industrial Corridor (DMIC), projected to attract
foreign investment worth about US$92 billion, will be built around DFC and will
include cooperation in development of one or two sea ports on the west coast and
industrial estates and Special Economic Zones with high quality physical and social
infrastructure through collaboration between private and governmental sectors of
India and Japan. The Japanese side has contributed to the Project Development
Fund (PDF) for the Early Bird Projects of the DMIC. A consortium of Japanese
private sector companies is collaborating with the DMIC Development Corporation
as well as the Governments of the concerned states, in developing eco-friendly
townships in the DMIC zone using Japan’s best practices.

Bilateral economic and commercial relations have vast potential for growth.
Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with
Japan have been completed. The Agreement is expected to be signed and
implemented soon. As per official Japanese statistics, bilateral trade during fiscal
2008-09 reached US$ 12.18 bn. However, in 2009-10 FY it declined 14.3% to
US$11.3 billion. In the current calendar year (2010), trade has continued to grow,
reaching US$8.3 billion in the first 7 months, according to Japanese Govt. statistics.
Japan’s exports to India during this period increased 47.8% over the corresponding
period last year to US$4.996 billion, while Japan’s imports from India rose 59.7% to
US$3.306 billion. The major items of India's export to Japan are petroleum crude and
products, gems and jewellery, marine products, iron ore etc. India’s import basket
consists of machinery other than electric, electronic goods, electronic goods, Iron &
steel, transport equipment and machine tools.

Japan presently ranks sixth in cumulative foreign direct investment flows into
India. According to latest available statistics, a total of 1049 Japanese companies
have representative offices in India and 627 have business operations in India.
Japanese companies have made actual investments of US$ 4.083 billion between
April 2000 and May 2010. The sectors attracting Japanese investment are
automobile industry, electrical equipment, trading, service sector (financial & non-
financial), and telecommunications. With regard to cumulative Foreign Technology
Transfers (FTC), Japan is the third largest collaborator nation for India. Japanese
investments in the infrastructure and industry sectors will secure a boost from DFC
and DMIC projects under finalization.

Since FY 2003-04, India has been the largest recipient of Japanese Official
Development Assistance. Cumulative commitment of Japanese ODA to India upto
July 2010 is Yen 3.3 trillion.

The two sides have launched an Energy Dialogue to promote cooperation in

the energy sector in a comprehensive manner. The areas of cooperation include oil
and natural gas, coal, electric power, renewable energy sources, energy efficiency
and other relevant sectors. The two sides have also decided to exchange views of
respective nuclear energy policy under the Energy Dialogue.

The Festival of India in Japan was inaugurated in December 2006. The

Festival of Japan in India was inaugurated in February 2007 in New Delhi. The year
2007 was designated as the “India-Japan Tourism Exchange Year”. Both sides are
collaborating for the development of a greenfield IIT at Hyderabad. The Indian
Cultural Centre in Tokyo was formally inaugurated in September 2009. Government
of India introduced a visa on arrival scheme for tourists from Japan on an
experimental basis from 1st January 2010.

India and Japan share similar positions on major regional and international
issues, like the reform of the UN Security Council and the regional architecture in
East Asia including East Asia Summit. The two sides also conduct consultations on
emerging issues like disaster management, climate change, maritime security and
nonproliferation and disarmament.

October 2010