Sandeep Dikshit

But he will take care not to upset other countries

A plan to provide direction to security cooperation pact will be finalised

Summit likely to help conclude assistance agreement for Delhi-Mumbai Industrial Corridor

NEW DELHI: Improvement in security and economic ties will top the agenda of Japanese Prime Minister Yukio Hatoyama’s coming visit to India, according to diplomatic sources.

As Japan’s first Prime Minister who is not from the Liberal Democratic Party, that had a stranglehold on power after World War II, Mr. Hatoyama will focus on building security cooperation without ruffling the feathers of other countries, as was the case in 2007 when the Malabar naval exercises earned all the four participants — the U.S., India, Japan and Australia — demarches from China.

While the U.S. remains the cornerstone of Tokyo’s security calculus, India is the second country, after Australia, with whom Japan has signed a joint declaration on a security cooperation agreement during Prime Minister Manmohan Singh’s visit last year. India and Japan are finalising an action plan to provide direction and more depth to this agreement, which will also include joint army exercises, though the focus will be on maritime ties. It is hoped that the action plan would be finalised by the time Mr. Hatoyama arrives here.

Analysts say Mr. Hatoyama’s Democratic Party of Japan does not subscribe to the China containment strategy pursued by the previous regimes in Tokyo and Washington.

Interestingly, a document on similar lines was signed during Australian Prime Minister Kevin Rudd’s visit to India last month. “This symbolises where Japan is trying to place India in forming a partnership. The idea was there, and Defence Minister A.K. Antony signalled India’s willingness to enhance security cooperation during his visit to Japan in November,” said the sources. Mr. Antony’s visit was preceded by that of National Security Adviser M.K. Narayanan. Not only were similar sentiments expressed but Mr. Hatoyama broke protocol and escorted Mr. Narayanan right up to his car, Indian official sources said.

Japan has also welcomed Union Home Minister P. Chidambaram’s announcement of a visa-on-arrival scheme for nationals from five countries, including Japan, and sees it as yet another Indian indication of closer bilateral ties.

Foreign investment

On the economic front, things have never been rosier. Japanese foreign direct investment catapulted nearly three times last year, compared with 2007. For the first time, Japanese investment in India exceeded that in China in a single year: Japanese FDI in India was ¥809 billion against ¥679 billion in China in 2008-09. This was partly because of the 26 per cent equity stake picked up by Japanese telecom giant NTT DoCoMo in Tata Teleservices and 34.8 per cent stake bought by Daiichi Sankyo in Ranbaxy Labs. Mitsubishi is also financing a petrochemical plant at Haldia in West Bengal.

Now, some Japanese companies are showing interest in participating in the Delhi-Mumbai Industrial Corridor (DMIC) project, and an agreement on the first tranche of project development fund would pave the way for a feasibility study. Once issues such as infrastructure building and electricity supply are cleared up, the “early birds” will set their investment plans in motion.

The Delhi-Mumbai Industrial Corridor would be a win-win venture for both countries. India will benefit, but investment in India is crucial for Japan’s future growth. Its economy has barely managed to sustain itself mainly because of China’s robust growth. “Without India, Japan cannot grow in future. Therefore infrastructure building projects in India are very important,” said the sources.

Allaying apprehensions that the global downturn could curtail Japanese financing in the Delhi-Mumbai Corridor, sources expect the summit-level meeting to help to conclude the assistance agreement early next year, and to accelerate the completion of the project, with both sides looking at the timeline of 2016-17.