Narendra Modi’s visit to Japan

A strategic analysis :-

By

Akshay Sikarwar

(GLA University , MBA)

The economy of Japan is :-

the third largest in the world by nominal GDP

 the fourth largest by purchasing power parity

the world's second largest developed economy

According to the International Monetary Fund, the country's per capita GDP (PPP) was at $35,855 or the 22nd highest in 2012.

Economy of Japan

Economy of India

The economy of India is :-

The tenth-largest in the world by nominal GDP

 The third-largest by purchasing power parity (PPP)

According to the International Monetary Fund, the country's per capita GDP (PPP) was at $1504 in 2013.

The GDP growth rate is 5.7%

Analysis of Narendra modi’s visit to Japan

1. PM Modi's 3D mantra: 

• Inviting Japanese investors to 'Make in India', PM Modi said, "There is no better place than India for Japanese investors. India is one of the most competitive markets in the world.“

• Addressing Japan's Nikkei Exchange, Modi said that India offers the three essential 'Ds' for businessmen to thrive namely; Democracy, Demography and Demand. "It is important for Japan to move to low cost hubs of manufacturing."

2.  Bullet trains•  With Japan committing to fund bullet trains, the dream of

running high-speed trains on Indian tracks is now a step closer.

• Modi's dream project got a big push after Japan expressed readiness to provide financial, technical and operational support to introduce bullet trains in India in a joint statement.

• The first high-speed train is expected to run between Ahmedabad and Mumbai at an estimated cost of around Rs 60,000-70,000 crores.

• As Japan is a pioneer in running superfast trains, the agreement is expected to help Modi achieve his dream of a bullet train for India running at a maximum of 300 km per hour.

3.  Two nominees of Japan in PMO's special team: 

• PM Modi announced that a special management team would be set up directly under the Prime Minister's Office to facilitate investment proposals from Japan.

• The decision to include two nominees of Japan in the special management team is unprecedented and such a system of having nominees of the foreign government will happen for the first time.

• Modi said that the two nominees selected by Japan would also be part of the decision-making team which evaluates business proposal.

4.  Special Strategic Global Partnership

•  Japan and India have upgraded their partnership to the level of 'Special Strategic and Global Partnership' with the signing of a defence pact for regional stability and Tokyo's decision to double FDI in India.

• India and Japan also decided to "upgrade" and "strengthen" their defence cooperation as they asked officials to launch consultations to promote military equipment collaboration and accelerate discussions on modalities for the sale of Japanese US-2 amphibian aircraft

5. Civil nuclear deal remains elusive

•  Despite last-minute negotiations, the two sides could not narrow down differences over Tokyo's insistence for a tougher safe-guard regime and "no nuclear test" clause in the bilateral agreement.

• Japan wants India to guarantee not to conduct nuclear tests and more stringent inspections of its nuclear facilities to ensure that spent fuel is not diverted to make bombs.

6. Japan to invest over $33.58 billion in India

•  Japan announced doubling of its private and public investment in India to about $34 billion over the next five years.

• The 3.5 trillion yen ($34 billion) of investment from Japan to India including Official Development Assistance(ODA) during a 5-year period will be under the aegis of India-Japan Investment Promotion Partnership for development of projects including infrastructure and building of smart cities.

7. Japan lifts ban on 6 Indian entities: 

•  Japan lifted ban on HAL and five other Indian entities, which had been imposed in the aftermath of the 1998 nuclear tests, amid Modi's assertion that cooperation between the two countries in defence and security will get a "new direction".

• "Japan has decided to remove ban on some entities," Modi said. Sources later said the ban had been lifted on six entities, including Hindustan Aeronautics Limited. However, four entities still remain in the banned list.

• The removal of the ban will enable these companies to have cooperation with Japanese firms, including transfer of technology.

8. Japanese companies to speedy clearance

• Holding that the environment of "disappointment" was over, Modi invited Japanese businesses to join India's developmental efforts with a promise of non-discriminatory and speedy clearances.

• Inviting Japanese businesses, particularly to infrastructure and clean energy sectors, the Prime Minister asked them to keep in mind the Gujarat experience.

• He promised single-window clearances, speedy decision- making which is non-discriminatory in nature.

9.  New TCS training initiative

• PM Modi inaugurated TCS Japan Technology and Culture Academy, which will work towards enhancing technology and cultural knowledge between IT professionals of the two nations.

• Modi also flagged off the first batch of 48 TCS Japan trainees, who will proceed to India to undergo training for 6-8 weeks at various TCS locations.

10. Double Foreign Direct Investment

•  Shinzo Abe also agreed to double foreign direct investment (FDI) from Japan as well as the number of Japanese companies in India in the next five years.

• This is part of the Japan-India Investment Promotion Partnership.

• Modi has wanted Japan to set up manufacturing units in India, much like the South Koreans.

• This could help boost India’s slowing manufacturing sector, technology and create jobs.