Bullet Train Project Underscores Warm India-Japan Ties
Photo Credit: Reuters
By Tridivesh Singh Maini

Bullet Train Project Underscores Warm India-Japan Ties

Sep. 26, 2017  |     |  0 comments

During Japanese Prime Minister Shinzo Abe’s recent India visit, all eyes were on the inauguration ceremony of the ambitious Ahmedabad–Mumbai bullet train project, valued at USD 17 billion. Apart from the laying of the foundation stone of the bullet train project, a number of other agreements were also signed during the Indo-Japan Annual Summit.

PM Abe landed in Ahmedabad on September 13, 2017. Along with Indian PM Narendra Modi, he visited the historic Sabarmati Ashram — an important center for the struggle of freedom and also home to Mahatma Gandhi for nearly a decade and half. Abe and Modi also visited the famous Sidi Saiyyed Ki Jaali Mosque in Ahmedabad which was built in 1573.

One of the interesting aspects of PM Abe’s India visit was that the national capital, New Delhi, was not part of his itinerary. The summit was instead held at Mahatma Mandir, Gandhinagar. In recent years, especially during PM Modi’s tenure, foreign dignitaries have been encouraged to travel beyond the national capital, with some even landing first in state capitals. Chinese President Xi Jinping landed in Ahmedabad in 2014 on the Indian PM’s birthday, though later he also visited New Delhi. PM Abe on his last trip to India in December 2015 visited Varanasi, PM Modi’s parliamentary constituency.

PM Modi has also received a number of other dignitaries outside Delhi, including former French President Francois Hollande who was a guest for Republic Day in 2016. PM Modi has also hosted a number of important economic events, as well as others generally held in New Delhi, outside the national capital. A prominent example was the African Development Bank (ADB) meeting in May 2017, which was held at Gandhinagar.

This is not to say that foreign leaders did not visit state capitals earlier. During the Information Technology boom, a number of foreign dignitaries visited Bengaluru and Hyderabad. Former US Secretary of State Hillary Clinton, recognizing the importance of Trinamool Congress leader and West Bengal Chief Minister Mamata Banerjee in the erstwhile UPA coalition, landed in Kolkata and not New Delhi during her India visit in 2012. This trend has increased in recent years.

Visits by foreign leaders to state capitals, and the holding of key events there, clearly fall in line with PM Modi’s focus that foreign policy is not the sole preserve of New Delhi. The reason for Gujarat being the natural choice for the latest Annual India-Japan Summit is that a number of projects — including the big-ticket bullet train project — are located in Gujarat.

A total of 15 agreements were signed during PM Abe’s visit. If one were to look at Gujarat-specific projects, apart from the bullet train, another important agreement was Suzuki’s decision to treble its lithium-ion battery production capacity in Gujarat. Currently, the annual capacity is 250,000, which Suzuki is likely to increase to 750,000. The Japanese automobile giant will also set up a unit at Hansalpur in partnership with Denso and Toshiba to produce batteries for electric vehicles. This plant will commence in 2020. Also, four Japanese industrial township will be established in Gujarat, Rajasthan, Andhra Pradesh and Tamil Nadu. India also signed a loan deal worth USD 76 million with Japan International Cooperation Agency (JICA) to enhance environmental management at the Alang-Sosiya ship recycling yards in Gujarat. The target date for completion is 2022 and the Gujarat Maritime Board will execute this project.

Japanese investments have soared in Gujarat in recent years, with a number of Japanese firms including Maruti Suzuki, Mitsubishi, and Hitachi having established a significant presence in the state.

Pertinently, PM Abe was accompanied by a number of Japanese corporate leaders, and 15 Japanese companies evinced interest in investing in Gujarat. Japanese investments — which have risen in India —  have soared in Gujarat in recent years, with a number of Japanese firms including Maruti Suzuki, Mitsubishi, and Hitachi having established a significant presence in the state. As Chief Minister, Modi visited Japan in 2007 and 2012 and developed a rapport with Abe. Speaking about his connection with Japan at the India-Japan Business Leaders Forum, PM Modi said: “My personal engagement with the leadership, government, industry and people of Japan is now a decade old. When I first visited Japan as Chief Minister of Gujarat, I had said that … I want to see a mini Japan in Gujarat. Today, that dream has come true.”

Japan’s interest in India is not limited to Gujarat. Other states which have received high levels of investment are Haryana, which a survey by the Japanese Government in 2016 revealed that it had received the highest level of Japanese investment in India; and Andhra Pradesh, whose Chief Minister Chandrababu Naidu has been wooing investment from Japan, especially for the new state capital Amaravati. Andhra Pradesh has received assistance from the ADB for the Vizag-Chennai Industrial Corridor, and JICA is providing financial support for the Chennai-Bangalore corridor.

The Japanese are also beginning to show interest in the Northeast, especially in the context of infrastructural projects. JICA has also announced financial assistance of Rs. 130 crore for an International Convention Centre in Varanasi. PM Modi explained: “The project of Varanasi Convention Centre is a symbol of cultural co-operation between Kyoto city of Japan and Varanasi. It was conceived by Prime Minister Abe and I when we visited Varanasi together in 2015.”

Japan and India have also decided to set up an Act East Forum, which will promote connectivity between India’s Northeastern states and Southeast Asia. As their joint statement categorically stated, India and Japan seek to “enhance connectivity and promote developmental projects in the Northeastern region of India in an efficient and effective manner.”

Given the increasing importance of the Indian states, it is important to include their Chief Ministers (CMs) in annual summits to appraise big-ticket infrastructural projects. A start could have been made this time by including the CMs of the Northeastern states, especially Meghalaya and Mizoram, which have received financial assistance from JICA. Similarly, since industrial parks are being set up in Rajasthan, Andhra Pradesh, and Tamil Nadu, representatives of these states should have participated. Likewise, the states involved in the Delhi-Mumbai Industrial Corridor include Uttar Pradesh, Haryana, Rajasthan, Gujarat, and Maharashtra. New Delhi should also encourage eastern states like Bihar, West Bengal, and Orissa, which are well-located and endowed with natural resources, to reach out more pro-actively to Japan.

Given the changing geo-political and economic dynamics within the Asia Pacific, the India-Japan relationship is likely to grow by leaps and bounds, and so is the role of state governments. It is important to harness the potential of the different states, not just in the economic sphere, but also in the context of strengthening people-to-people contact.

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