Story Of The Week

Narendra Modi’s Japan visit – Building New Hopes

Recently Prime Minister Narendra Modi’s visit to Japan has been the center of attention, not only for the two countries but also for the world media. Even major countries like USA, Australia and even China followed the visit very closely due to the implications of the deal that could affect them.

Although it is not the first time that India and Japan have entered into a bilateral agreement, but this time it looks more promising and result oriented. Our prime ministers in past have also had pacts with Japan, like Japan-India Global Partnership in the 21st Century in 2000 and Strategic Orientation of Japan-India Global Partnership in 2005, but this time it seems to be on a larger scale. The past agreements focused on specific projects in infrastructure, transportation etc. Spreading its wings further, the recent agreement has widened its horizon and focused on strengthening the country’s manufacturing base, upgrading its rickety infrastructure, creating a network of new ‘smart’ cities, and introducing bullet trains.

Narendra Modi is fully aware that if any foreign partner can help India revive its slumbering economic growth, it is Japan. Japan has always been a warm and reliable business partner and with significant amount of investments and technology coming from Japan, Modi can turn his dream of making India more robust and stronger, into reality.

The imbalance of trade between India and Japan is shown in the table below.



Exports from India to Japan


Exports from Japan to India



Therefore in order to maintain equitable trade relations with Japan, it was important to bring in investments through this agreement.

Another vested interest of both the countries is to keep checks on China’s propensity to flex its muscles and to assert revanchist territorial and maritime claims. This joint agreement will also prevent the rise of a Sino-centric Asia i.e. China, or else India’s world-power aspirations will stay in a limbo.

Highlights of the agreement:

  1. Japan has committed to doubling its current investment inIndia to $35 billion over the next five years, primarily towards developing India’s infrastructure.


  1. Japan has also pledged $500 million towards the Public-Private Partnership Infrastructure Financing Project to India Infrastructure Finance Company Limited (IIFCL) and an additional $156 million for the Guwahati Sewerage Project in Assam.



  1. Modi also inked a Memorandum of Understanding (MoU) between the Ministry of New and Renewable Energy of India and the Japan Bank for International Cooperation (JBIC) in the field of new and renewable energy. Japan lifted ban on six Indian entities, including Hindustan Aeronautics Ltd, which had been imposed in the aftermath of 1998 nuclear tests.


  1. India and Japan signed an agreement on the development of the Shinkansen system Bullet trains for India, starting with the Mumbai-Ahmedabad corridor. As part of this deal, Japan will provide technical, financial and operational support for such trains.


  1. Japan will work with India on creating smart cities, starting with the Kyoto-Varanasi project. As part of this, Japan will help India Varanasi – Modi’s Parliamentary constituency – develop urban infrastructure to make it a ‘smart’ city. Japan will also help India improve basic amenities across selected cities. 


  1. Modi will set up a Special Management Team within the Prime Minister’s Office to deal exclusively with Japanese investment. This special cell will facilitate Japanese investments so that they do not get bogged down in red tape.


  1. Both India and Japan affirmed their shared commitment to maritime security, freedom of navigation and over flight, civil aviation safety, unimpeded lawful commerce, and peaceful settlement of disputes in accordance with international law.


With so much to offer by this deal, the hopes of both the nations are riding high. Even the USA appreciated the coming together of the two nations and taking the mutually benefitting relations one notch higher. Now, the bigger challenge of implementation is what Narendra Modi and his team should focus on. It remains to be seen that whether this deal turns out to be yet another deal with minimal results or it really becomes a game changer for Indian economy.


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