Japan's India Investment Of $30 Billion Over 5 Years Begins For Real

Japan’s India Investment Of $30 Billion Over Five Years Begins For Real

No prime minister of India before Modi dared to dream this big, and certainly no one before him made a material difference on this scale in a matter of months after taking over. None before him have managed to obtain pledges, let alone actual investment flows of $30 billion from a single country, spread over a period of five years in the history of independent India. But Japan has begun, and in earnest.

In statecraft, all the bonhomie is meant to be taken as routine diplomacy, but to witness an unforced connection between heads of government is not very common.  And to see intentions and memorandums of understanding turn into reality in the near term is equally infrequent.

Narendra Modi has achieved a rare bonding with Shinzo Abe during one of his first visits abroad as prime minister. And this is the cherry on top of the cake that is animating India-Japan bilateral relations at present.

Prime minister Abe is in India on a state visit preceded by much preparation. It is expected to yield unprecedented breakthroughs and long lasting benefits to both countries.

On the designing board for India, is Japanese technology nuclear power plants, some defence purchases for the navy, Japanese investment in highways, particularly in the long neglected North East, and India’s first bullet train between Mumbai and Ahmedabad.

There will be myriad spin offs for the Indian Railways, in terms of advanced technology, track, signalling, more speed generally. Japan will help us build state-of-the-art railway stations, clean and hygienic, almost difficult to imagine in our extended playing of a 19^th century EM Forster written scene.

There will also be more consolidation of India’s metro network, already part financed by Japan for long. And the fleshing out of Indo-Japanese industry in the largely India-Japan manufacturing corridor. Though the South Koreans and others are also involved in it, in clusters, all along the Mumbai-New Delhi highway.

While Modi’s detractors and mockers are legion, the man has a way of defying the odds and coming through on top.

This, even as his principal opposition, the dynastic Gandhis of the Congress party, may well be in some unanticipated but real danger from the legal system. They have been personally caught out subverting the working of their tax exempt political party, in favour of blatantly organising an asset grab, and monetary profit for themselves.

This unsavoury matter, exposed, has become a threat facing the oldest political party in the country at 130 years, one that has ruled for five decades and more.

Congress, in an effort to brazen it out, is holding parliament to ransom over its troubles, even as prime minister of Abe of Japan visits. But this back drop is happily not able to affect or stop the Modi-Abe juggernaut.

But Congress could nevertheless lose its tax exemption status over this, if the National Herald case in the courts goes badly. It could also, in a spiralling action like Watergate, even be debarred from contesting in  future elections, if the Election Commission takes a view on it.  

But Modi, unable to pass legislation because of Congress intransigence,  is not looking ineffective as  a consequence. Japanese FDI will come. His image as a reformer and doer is intact. Some countries have already said the postponing of GST , the Land Bill, Labour Law reforms etc. will not reduce their FII/FDI interest this country.

In something of a minuet between the two, Abe is going to accompany Modi to his constituency in the ancient holy city Varanasi, there to witness a Ganga arati. This is an echo of Modi’s visit to the temple town of Kyoto accompanied by Abe, when he visited Japan some months ago. Japan could also help in the clean Ganga effort.

Another key perception that is emerging from this visit is that the Indo-Japanese cooperation is off and running, even as the bilateral overtures with China are yet to yield very much.

But the fact that this is going so well, is likely to stimulate Chinese interest in future. For India, it can only mean more investment coming in from a wealthy neighbour.

More countries, big ones such as the US, France, Russia, and smaller others, are also getting ready to take a substantial plunge into India.

Come Republic Day next month, when President Hollande will be chief guest, many breakthroughs, including the manufacture of the Rafale fighter jets in India, and the advent of Areva nuclear power plants, the most advanced in the world, are expected to fructify.

Meanwhile, it is Japan that is leading the charge.

For: The Quint

(762 words)

December 11^th 2015

Gautam Mukherjee