PRIME Minister Dr Manmohan Singh today urged closer ties with Japan to bolster Asian economic growth, as Tokyo struggles to offset the risk of its growing dependence on giant rival China.
Trade and investment flows with India have been unspectacular as Japanese firms focused on business with China and Southeast Asia, but recent Sino-Japanese tensions have underscored the risk of reliance on China’s dynamism to help Japan’s stalled economy.
Dr Manmohan Singh and Prime Minister Naoto Kan were expected today to agree to hold annual ministerial economic talks and to expedite negotiations, begun in June, on a pact that would give Japanese firms access to India’s fast-growing market, the Nikkei business daily said last week.
“I strongly believe that we can, and we must, synergise our complimentary stance to impart new momentum to Asia as well as global economic growth and prosperity,” Dr Singh, in Tokyo until tomorrow, told a group of business leaders from both countries.
Sino-Japanese relations deteriorated sharply last month after Japan detained a Chinese trawler captain whose boat collided with Japanese patrol ships near a chain of disputed islands in the East China Sea, called Senkaku in Japan and Diaoyu in China.
Concerns remain in Japan that Beijing is holding back shipments of rare earth minerals, vital for electronic goods and auto parts, following the dispute.
“Japan wants to cultivate India as a strategic partner to offset problems in its relationship with China,” said Jeffrey Kingston, director of Asia studies at Temple University’s Japan campus.
“Japan remains economically closely tied to China and will for the foreseeable future, but clearly, it behooves the Japanese government and businesses to hedge their bets,” he added.
Trade between Japan and India, Asia’s second and third biggest economies respectively, totalled $11.55bn (£ billion), four per cent of Japan’s trade with China.
In September, Tokyo and New Delhi clinched a basic accord in September on an economic partnership agreement (EPA) to promote two-way trade and investment, concluding more than three years of wrangling over such sticking points as tariffs on Japanese car parts and tough checks on Indian pharmaceutical goods.
Dr Singh said he hoped Japan’s decision to treat Indian generic drugs the same as domestic products and finish approval procedures smoothly would create new business chances for India drug companies including makers of generic medicines.
Japan has been stepping up efforts to strengthen overall ties with India, with the two countries agreeing on closer security cooperation in December 2009.
