India-Japan bonding

This refers to the editorial "Natural partners" (May 30). One must wonder why Indo-Japanese economic ties have been so comatose for years now. Japan had become inward-looking - fighting for almost a decade a persistently stagnant economy. It has since spurred itself into an aggressive rebuild mode under its new premier. This comes at a time when India, too, seems to have shed its laxity, after being transfixed by China's global trade blitz and its own internal faults. India's enormous appetite for new infrastructure today is matched by the established ken of the Japanese.

While China is overflowing with resources and large-scale cheap labour, Japan is dependent on external sourcing. It has taken its strength from design, planning and optimising cost and time. This should prove useful, given the global commodity prices are also declining. A fast-track tie-up with Japan on critical infrastructure projects can serve interests of both nations. A report shows that India may be overtaking Japan to be the third-largest economy in purchasing-parity terms. This must provide us the required confidence to act the part, and promptly move to scale up trade and economic transactions with our old ally, Japan.

Yamaha to make global models in India

Japanese bike major Yamaha plans to take the made-in-India brand global. The company has decided to develop and manufacture 'global models' here that would be sold in emerging markets, European countries and its home market Japan.

"India is a low-cost market, but we are not looking at just that. We want to develop sporty and stylish models from here and these would be for European markets and Asian markets ," Hiroyuki Yanagi, president and CEO of Yamaha Motor Co told TOI here.

The company, he said, wants to make India a location for developing and manufacturing "commuter" bikes or those powered by engines ranging between 100cc and 200cc. Other markets for these vehicles would be South America and even Japan where it has already started export of 150cc R15 and 150cc FZ series bikes.

Yamaha, a popular brand in India till late nineties, lost out when others like Hero Moto-Corp (formerly Hero Honda), Bajaj Auto, Honda Motorcycle and Scooter India ( HMSI) and TVS gained ground.

The company, however, is looking to change its fortunes by launching new models aimed at both the domestic market as well as overseas. It has also ventured into the fast-growing scooter segment with the launch of the Ray model last year for women , and the range has been complemented by the introduction of Ray Z for men.

Yanagi said the company expects sales in India to grow at a rapid pace, even though the base is relatively small at the moment. The company's wholly-owned subsidiary India Yamaha Motor (IYM) sold 4.9 lakh units in 2012 and is among the top 10 operations of Yamaha globally at present. This included 1.4 lakh units sold overseas.

Yanagi said with rapid expansion and new model introductions , he expects India to become one of the company's top-five markets by 2016. The company would be rolling out at least two-to-three new models and variants every year, and these would be both in motorcycle and scooter segments.

Yamaha has undertaken one of its most ambitious projects in India by kickstarting the development for its cheapest (sub $500 or below Rs 27,000 approximately) motorcycle and scooter models here. The company in April announced the establishment of a new motorcycle R&D set-up at Surajpur and this is Yamaha's fifth overseas research centre on the lines of similar ones in Italy, Taiwan, China and Thailand . Among other markets, the low-cost products would also be exported to China, in perhaps the first instance of a major made-in-India automobile product making its way to the dragon land.

Yamaha has an installed capacity for making 10 lakh units annually at Surajpur in Uttar Pradesh. It is also constructing a new plant in Chennai, which will be operational next year and will have a peak output for 18 lakh units by 2018.

India is finally looking East, but is it enough?

The importance India and Japan now attach to their bilateral ties was evident in the statements from the Indian and Japanese prime ministers.

Prime Minister Manmohan Singh gave India’s ‘Look East’ policy another fillip with his trips to Thailand and Japan last week. In Thailand, Singh’s visit resulted in a landmark extradition pact, along with ratification of an agreement for the exchange of sentenced persons, and a memorandum of understanding for facilitating cooperation for investigation into money laundering and terror financing. These pacts will make it difficult for criminals and other fugitives wanted for terrorism and transnational crimes to make Thailand their preferred destination, something that has been of great concern to India. India has invited participation of the Thai private sector in its plans to modernise and upgrade manufacturing and infrastructure sectors, especially in the Delhi-Mumbai and Chennai-Bangalore industrial corridors, the Buddhist circuit and the northeast states of India.

Thailand also expressed a keen interest in India’s defence sector, an area that will be further explored when the Indian defence minister will visit Thailand later this month.
But it was Japan where India’s ambitions in the region really came out in the open. New Delhi and Tokyo not only agreed to institutionalize joint exercises by their navies and to increase their frequency,  but Japan also offered its highly advanced sea plane Shinmaywa or US-2 to India. This is a remarkable development as this is the first instance of Tokyo’s readiness to offer a dual-use technology to New Delhi, setting a new bench-mark in the rapidly evolving bilateral ties. The Singh-Abe joint statement also directed officials of their countries to “accelerate” the negotiations of an Agreement for Cooperation in the Peaceful Uses of Nuclear Energy. These talks have been going on for quite some time now and have been in the deep freeze since the Fukushima incident but the new Japanese government is keen on nuclear power. Unlike in the past, Japan has not made India signing the NPT a precondition for the conclusion of this civil nuclear energy pact this time.

The importance India and Japan now attach to their bilateral ties was evident in the statements from the Indian and Japanese prime ministers. According to Singh, “It is not only our spiritual and cultural affinities that bring us together, but also our shared commitment to democracy and international peace. The success of our partnership is vital for the prosperity of our people and indispensable for a future of peace and stability in Asia and Pacific region.” Shinzo Abe reciprocated suggesting “India from the west, Japan from the east, the confluence of the two most deep-rooted democracies is already one important part of international common good for the 21st century. I am of a belief that it is important that Japan and India should ensure that Asia remains in peace and prosperity.”
That this visit has not gone unnoticed in China is apparent from the Chinese media’s over-the-top reaction. State-run Global Times warned that strategic cooperation with Japan “can only bring trouble to India.” But India’s gravitation towards East and Southeast Asia is not something that has just begun. It was the end of the Cold War that really brought this region back to the forefront of India’s foreign policy horizons. And the then prime minister, PV Narasimha Rao, whose contributions are often ignored in Indian foreign policy discourse, was visionary enough to recognise the importance of engaging with the world’s most economically dynamic region. Since then, India’s ‘Look East’ policy, which originated primarily to focus on trade and economics, has now attained a distinct security dimension.  As India’s economic linkages with various countries in the region have become more extensive, demands have grown for a gradual strengthening of security ties at a time of China’s rapid ascendance in the global hierarchy.

China is clearly too big and too powerful to be ignored by the regional states. But the states in China’s vicinity are now seeking to expand their strategic space by reaching out to other regional and global powers. Smaller states in the region are now looking to India to act as a balancer in view of China’s growing influence and a broader leadership vacuum in the region, while larger states see India as an attractive engine for regional growth. To live up to its full potential and meet the region’s expectations, India will have to do a more convincing job of emerging as a credible strategic partner of the region. India, for its part, would not only like greater economic integration with the fastest growing region in the world but would also like to challenge China on its periphery. But India will have to do much more to emerge as a serious player in the region.

China’s aggressive turn towards the region in the last few years has provided India with a key opening in the region to underline its credentials as a responsible regional stakeholder. On the one hand, China’s aggressive pursuit of its territorial claims has aggravated regional tensions. On the other, despite Obama administration’s famous ‘pivot’ towards the Asia-Pacific, there are doubts about the ability of Washington to manage regional tensions effectively. India’s proximity to the region and its growing capabilities make it a natural partner of most states in East and Southeast Asia.
New Delhi, which so often likes to sit on margins and avoid taking sides, must assume it can no longer afford the luxury of inaction if it wants to preserve credibility as a significant actor in both East Asia and Southeast Asia. Indian foreign policy moves in recent years have underlined New Delhi’s ambitions to expand its footprint in the region which has so far been viewed as outside India’s core interests. At a time when China’s bullying behaviour has been evident in its actions and pronouncements, India is signalling that it is ready to emerge as a serious balancer in the region. The regional states have often complained about Indian diffidence and its lack of seriousness. Now India is getting serious but it remains far from clear if it is well prepared to challenge China on its own turf.

Fuji spoils DRL’s Japanese dream

India’s second largest drug maker Dr Reddy’s Laboratories Ltd’s long-pending plan to enter Japan’s generic market — one of the biggest in the world — has suffered a serious setback as the Hyderabad-based pharma firm and Tokyo-based Fujifilm Corporation have agreed to terminate their agreement to form a joint venture to sell off-patent drugs in Japan.

The termination comes in the backdrop of Fujifilm’s decision to shift its focus from low-margin generics to highly profitable areas like new drugs in cancer field, more value-added super generics, and bio-related business.
The pacts signed by two firms in July 2011 was expected to open doors to Japan — the world’s second largest pharmaceutical market in the world — for Dr Reddy’s.  Despite a massive pharma market in Japan, estimated to be around $64.5 billion, the share of generics is still at a negligible 6.6 per cent.
However, reports suggest that Japan plans to increase the share of generics to 50 per cent to cut down on the expenditure.
Apart from this, major drug patent expiries in the coming years make the Japanese generic drugs market, attractive to foreign manufacturers looking for a large and relatively unta-pped market. The country was till recently closed for foreign players.
Meanwhile, Dr Reddy’s had also planned to open a local office in Tokyo or Osaka. Despite expressing his disappointment over the development, Dr Reddy’s chairman, G.V. Prasad, reiterated his firm’s desire to enter Japan.
“I want to reinforce our commitment towards a plan-ned entry into Japan to bring affordable and innovative drugs to more patients worldwide,” Mr Prasad said in a statement.
The first Indian generic company, which could enter the Japanese drug market, was Ranbaxy after it was acquired by Daiichi Sankyo. Later, Ahmedabad-based Zydus Cadila and Torrent Pharma and Mumbai-based Lupin had succeeded to foray into Japan.
DRL and Fujifilm have agreed to explore partnership opportunities in the development and manufacturing of active pharmaceutical ingredients (APIs) and contract research.

India, Japan and the grand bargain

As India extends its strategic reach into East Asia and the Pacific, Japan will be one of its most important relationships. But building a meaningful partnership will require changes in the way both India and Japan do things.

Both India and Japan have high expectations of the relationship. During his visit to Tokyo last week, Prime Minister Manmohan Singh argued that Japan was a "natural and indispensable partner." A few months ago, Japanese Prime Minister Shinzo Abe called for a strategy in which India, Japan, the United States and Australia formed a "diamond" to safeguard the maritime commons stretching from the Indian Ocean Region to the western Pacific.

These are grand words. But it will take work on both sides to give them substance. In building its relationship with India, Japan is making some major changes to its traditional strategic posture.
The first big leap is in Japan's nuclear policy. Abe has given his strong support to renewed negotiations for an agreement on the sale of nuclear technology to India. He also gave Japan's support for India to become a full member of international export control regimes, including the Nuclear Suppliers Group. Abe understands the symbolic and practical importance of a nuclear deal with India, especially after Australia lifted its ban on uranium exports to India in 2011.

Currently, Japan bans the supply of nuclear technology to India because it has not signed the Nuclear Non-Proliferation Treaty (NPT) or the Comprehensive Nuclear Test Ban Treaty (CTBT). In practice, this not only prevents Japanese companies from working in India but also makes it difficult for major US suppliers, such as Westinghouse and General Electric, which are owned by or in joint ventures with Japanese companies and rely upon Japanese technology. Access to this technology is therefore an important factor for the development of India's nuclear power industry. Japanese nuclear suppliers also see it as a big commercial opportunity.

Japan may soon export nuclear reactors to India

Japan will soon export nuclear reactors to India as the two countries have moved forward to sign civil nuclear energy agreement soon.

Speaking to reporters, Prime Minister Manmohan Singh today expressed confidence that India will soon conclude a civil nuclear deal with Japan that will allow Tokyo to export nuclear reactors to the country. "There have been discussions with Japan and this visit marked a formal move in that direction. I am hopeful that before long we will be able to put our signatures to a civil nuclear energy agreement with Japan as well," Singh told reporters on his way back from Japan and Thailand. A joint statement issued at the end of exhaustive talks between Singh and his Japanese counterpart Shinzo Abe this week had said the two leaders reaffirmed the importance of civil nuclear cooperation between the two countries, while recognising that nuclear safety is a priority for both governments. "In this context, they directed their officials to accelerate the negotiations of an Agreement for Cooperation in the Peaceful Uses of Nuclear Energy towards an early conclusion," the statement had said. Negotiations for the bilateral civil nuclear cooperation agreement have not made much headway since Japan was struck by Fukushima nuclear disaster in March, 2011. Answering questions on progress made so far in India's Look East policy, Singh said, "I am hopeful that Look East policy of India is paying rich dividends and the results are going to improve as we move forward". "The Look East policy of the Government of India is not a new development. When Narsimha Rao was our Prime Minister, and I was the Finance Minister, we charted out a course of action to get closer to South East Asian countries particularly ASEAN," the Prime Minister said. During Singh's visit, India and Japan signed the Exchange of Notes for yen loan totalling USD 424 billion. This includes USD 71 billion for the Mumbai Metro Line-III project as well as the yen loan of the fiscal year 2012 for USD 353.106 billion for eight projects.

Japan to bankroll Mumbai Metro

Prime Minister Manmohan Singh and Japanese Prime Minister Shinzo Abe today signed this Exchange of Notes here.

Mr Abe reaffirmed that Japan would continue its Official Development Assistance at a substantial level to encourage India's efforts towards social and economic development, including in the area of infrastructure and human resource development.

The two Prime Ministers welcomed the signing of the Exchange of Notes for yen loan totalling 71 billion yen (70 Crore dollar) for the Mumbai Metro Line-III project,as well as the yen

loan of the fiscal year 2012 totalling 353.106 billion yen (3.5 million dollar) for eight projects.

Prime Minister Singh expressed his appreciation to the Government and people of Japan for their continued and unwavering support to India's development.

He appreciated the pledge by Prime Minister Abe for the Campus Development Project of Indian Institute of Technology,

Hyderabad (Phase 2) for 17.7 billion yen and the 'Tamil Nadu Investment Promotion Programme' for 13 billion yen.

The two Prime Ministers, recognising the importance of upgrading the speed of passenger trains on the existing Delhi-Mumbai route to 160-200 kmph (Semi-High Speed Railway system), also welcomed the final report of the feasibility study undertaken with Japan's cooperation, and confirmed that further consultation between the two countries would be continued to draw up a roadmap.