By Ashok Bhattacharjee, Bloomberg
New Delhi: Foreign Minister Pranab Mukherjee will seek Japan’s support to bolster its energy supplies after a civilian nuclear agreement with the US.
Mukherjee, on his second visit to Tokyo in 10 months, is looking to expand India-Japan ties after Prime Minister Manmohan Singh on a trip three months ago promised to bring the nations economically closer. Mukherjee is scheduled to meet Japanese Prime Minister Shinzo Abe and hold talks with counterpart Taro Aso during his two-day visit starting today.
“India’s goal to enhance its nuclear-power output should not ruffle feathers in Tokyo any longer because Japan now looks on India as a partner,” N. Bhaskara Rao, Chairman of the Centre for Media Studies in New Delhi, said in a telephone interview today. “China’s rise has forced a sea change in the regional balance of power, drawing India and Japan ever closer.”
India and the US are negotiating details of the agreement, which will end the South Asian nation’s isolation from global trade in nuclear technology and fissile material. Among the sticking points are whether India can reprocess spent nuclear fuel and conduct atomic tests. Japan, which Rao said criticized India’s 1998 nuclear tests, considers recycling spent nuclear fuel central to its energy policy.
Japan’s Chief Cabinet Secretary Yasuhisa Shiozaki denied a report in the Yomiuri on 10 January that Asia’s richest economy may allow its companies to help India build civilian nuclear facilities after reacing agreement with the US.
India, which will allow overseas monitors to inspect its civilian reactors as part of the agreement, needs to increase the share of atomic power in total output from 3 % now to provide uninterrupted supply to factories, homes and services centres.
India must still reach an agreement with the International Atomic Energy Agency, the United Nations’ nuclear watchdog, on a regimen for international inspection. The Nuclear Suppliers Group, a 45-nation forum dedicated to limiting the spread of atomic weapons, must also approve the agreement.
Japan needs closer links with India to counterbalance China’s dominant share of trade and investment in Asia. China and India’s combined economy will rise to $16 trillion by 2020, double Japan’s, according to CLSA Ltd.
Japanese banks and companies have begun engaging with the $854-billion Indian economy, where companies such as Nomura Holdings Inc. and Mitsubishi UFJ Securities Co. are expanding to meet record appetite for funds.
Mukherjee said his discussions with Japanese leaders will follow up on certain programs and actions initiated during Singh’s visit. Mukherjee didn’t detail the agenda of the meetings. The two countries are expected to enhance cooperation on regional matters of mutual interest, the report said, citing unnamed officials in Japan’s Foreign Ministry.
Japan’s business with India has risen to $6.54 billion in the year to March 2006, up 77 % from $3.7 billion in the year to March 2003, according to trade data compiled by India’s federal statistical department.
Shipments of merchandise goods between China and India more than tripled in the period to $17.63 billion from $4.78 billion. These statistics don’t include sales of computer software or other services.
India is persuading Japanese companies, which have favoured investments in China and other Asian nations, to take advantage of the purchasing power of a 216-million strong middle class. While Honda Motor Co. and Suzuki Motor Corp.’s vehicles have been on Indian roads for more than a decade, the world’s second- biggest economy has traditionally trailed the US, Europe and now China in trade with India.
India needs $320 billion of investments in roads, ports and railway services. A key beneficiary of Japanese aid, India now wants to offer its market as the lure to draw investments from Japan and narrow the gap in overseas funding with China, which began unshackling its economy in 1978, 13 years before India. India’s northern neighbour got $60 billion of FDI in 2005 compared with India’s $7.5 billion.