Modi-Abe Summit: Need for a breakthrough

At last, the speculation about Prime Minister Narendra Modi’s visit to Japan has come to an end with the official announcement that he will undertake his four-day trip from August 31, mainly for his summit meeting with Japanese Prime Minister Shinzo Abe. Considering the series of events that have taken place in the bilateral relations in the last one year or so — Prime Minister Manmohan Singh’s visit to Japan in May 2013, the historic visit of Emperor Akihito and Empress Michiko to India in November and Prime Minister Abe’s visit to India in January 2014 — Prime Minister Modi’s visit will mark a significant milestone by maintaining the momentum of the bilateral partnership.

It is well-known that apart from sharing similar visions on the kind of roles that their countries should play in international politics, there is a strong personal chemistry that binds both Modi and Abe. Even as the Chief Minister of Gujarat, Modi went to Japan for the first time in 2007 in search of investment and trade opportunities and met Abe who was the Prime Minister at that time. Encouraged by his positive impressions, Modi again went to Japan in 2012 and met Abe who was out of power at that time. Modi also received a positive and warm welcome from the Democratic Party led government under the leadership of Yoshihiko Noda. Japanese business leaders were quite impressed by the remarkable economic progress of the Gujarat state under the leadership of Modi. They were equally receptive to the measures that Modi had taken to make Gujarat an attractive investment destination.

When Abe returned to power in December 2012 following a landslide victory in the Lower House elections, Modi was among the first to greet him, a gesture Abe reciprocated to Modi following his remarkable victory in the parliamentary elections in last May. What has distinguished Modi is the fact that even as the chief minister of an Indian state, he had a broad perspective to understand the importance of forging long term friendly relations not only with Japan but also with other Asian countries like China, South Korea and Singapore.

Given the fact that both Modi and Abe enjoy commanding parliamentary strength and that they will stay in power for fairly long periods of time, their personal equations should enable them to work out a roadmap for the bilateral partnership based on mutual economic and strategic interests.

Civil nuclear cooperation

There is no doubt that Modi’s visit has already aroused great expectations on both sides in terms of not only settling some important pending issues but also formulating a fresh agenda for the future. Among the unresolved issues, the first and foremost is how to sign a civil nuclear agreement so that both countries can carry on meaningful cooperation in that field. Despite the fact that four rounds of talks have already taken place, the prospects of an agreement appear to be elusive. Both countries stand by their well-stated positions: Japan insists on stronger assurances from India that it would not conduct any more nuclear tests and India argues that the assurances that it gave to the US at the time of signing the US-India nuclear agreement are sufficient for the present bilateral agreement. In addition, India believes that it has enhanced its transparency in its nuclear infrastructure by ratifying the additional protocol with the IAEA in June this year.

Though Abe is inclined to bring the stalemate to an end, he cannot totally ignore the strong pressures coming from several anti-nuclear groups at home. In the aftermath of the Fukushima tragedy of 2011, public antipathy to nuclear energy in Japan has become too strong. All the 50 nuclear reactors in Japan are still non-functional and though the Nuclear Regulation Authority has recently cleared two reactors in Kagoshima, their resumption is being delayed due to popular resistance. The present Japanese government under Abe is in favour of encouraging the use of nuclear energy, but it is not in a position to determine its share in the overall electricity production.

Defence cooperation

Another issue that remains to be resolved relates to the supply of Japan’s indigenously made US2 amphibious aircraft to India. Defence production is one area which holds out great potential for a new and mutually beneficial partnership. In May 2013, both countries expressed their satisfaction at the expanding defence relations in areas such as naval exercises and decided to increase their frequencies. For the first time, they also agreed to explore the prospects of Japan selling its indigenously made US2 amphibious aircraft to India. They also set up a joint task force to examine the modalities of cooperation on the issue. A Japanese defence delegation visited India subsequently and held discussions with the Indian defence establishment to take defence cooperation to the next level. Though the Abe government subsequently modified its policy by removing restrictions on defence exports, the two countries have not come to any agreement on the modalities determining mutual cooperation in the case of US2 aircraft. It remains to be seen how both Abe and Modi will address this important pending issue.

Trade and investment

Another subject that will draw the attention of the two leaders is how to enhance the volume of bilateral trade and investment. To be sure, both countries have already put into effect a comprehensive economic partnership agreement. But it has not produced any tangible results so far. On the contrary, the volume of bilateral trade has decreased to $16.3 billion in 2013 from $18.4 billion in 2012. Similarly, Japanese investment in India has fallen from $2.09 billion in 2012 to $1.3 in 2013. Japan has always complained that there are still many formidable barriers to the flow of Japanese trade and investment. Equally important are the complaints pertaining to the inordinate delays in the implementation of the Delhi-Mumbai Industrial Corridor. It is high time that the new Indian government makes serious efforts to address these complaints and creates confidence in the minds of Japanese business people.

The views expressed in this article are solely those of the author.
Courtesy (ORF)