India, Japan Draw Closer on China Unease

A meeting between the leaders of Japan and India in mid-November is set to build on security and economic cooperation to help counter China’s increasing sway in the Asian region. Indian Prime Minister Manmohan Singh will meet his Japanese counterpart, Yoshihiko Noda, in Tokyo in the middle of the month (UpdateIndian Prime Minister, Manmohan Singh’s trip to Tokyo has been cancelled as of now as the Japanese Prime Minister Yoshihiko Noda has dissolved the government and called for elections). The two leaders will discuss strengthening security cooperation after a flurry of meetings this year between the countries’ top defense and foreign affairs officials and the first India-Japan joint naval operations in June, according to a Japanese foreign ministry official.


Both countries have committed to start regular meetings on maritime security in the region’s waters and hope to begin such discussions as soon as possible, the official said. A spokesman for Mr. Singh’s office declined to comment. The heightened spotlight on defense, especially maritime security, is a product of unease in Tokyo and New Delhi over Beijing’s territorial claims in the seas around China and its development of  ports in the Indian Ocean. In September, angry crowds across China attacked Japanese businesses in protest of Japan’s claims to a chain of disputed islands in the East China Sea. The islands – claimed by both countries – are known as Senkaku in Japan and Diaoyu in China.

Tensions also have risen in the South China Sea between China and a number of countries, including India, which is prospecting for gas in the area. New Delhi says it’s also concerned about China’s funding of ports in the Indian Ocean – India’s sphere of influence – including in Pakistan and  Sri Lanka. Expanding trading ties between Japan and India are also likely to feature in the upcoming talks. Japan’s difficult relationship with China, a major trading partner, has pushed its companies to look elsewhere to expand business. India, with a young population and growing economy, has been a major beneficiary.

So far this year, Japan is the largest foreign direct investor in India, with investments of $1.5 billion in 34 deals through Oct. 11, according to Dealogic. Two-way trade between the two nations, who signed a free-trade deal in 2011, is expected to touch $25 billion by 2014, up from $18 billion in 2011. Companies like Toyota Motor Corp and Suzuki Motor Corp have invested in India for decades. More recently, Japanese firms have begun to buy stakes in India’s insurance and information technology sectors.

There have also been hiccups in the commercial relationship. Suzuki’s local production joint venture had to suspend operations at a plant this summer after workers rioted over  a dispute between a worker and a supervisor. Japan has pledged $4. 5 billion in financial guarantees for an Indian project to build an industrial corridor between New Delhi, the capital, and Mumbai, the country’s financial center. But the project has been beset by delays, many of the relating to the difficulties of acquiring land.

News source: WSJ