By Alyssa Ayres
The US should take note of what Japan (and China) are offering India to further relations.
Indian prime minister Narendra Modi’s five-day visit to Japan was a resounding success. Both the Indian and Japanese press have lauded the visit and its accomplishments—notably, the elevation of the India-Japan relationship to a “special” strategic and global partnership, and the big-ticket investments in Indian infrastructure announced to the tune of U.S. $35 billion in assistance over five years. From a Washington perspective, the India-Japan relationship is a positive development and one that the United States has fully supported. What the visit also shows, however, is the way the state-directed economic policy tools countries like Japan (and China as well) are mobilizing to further their relations with India substantially exceed comparable U.S. approaches.
Virtually every account of the Abe-Modi summit emphasizes the Indian interest in attracting greater foreign investment for India’s enormous development needs. Infrastructure has been a particular focus for the government of India for at least a decade, and the scale is daunting. In March 2010 for example, then-prime minister Manmohan Singh estimated that India would need to invest U.S. $1 trillion in infrastructure development by 2017. India has some way to go to meet this target.
The government of Japan, with its state-directed tools of overseas development assistance (ODA) and large capacity to grant assistance in the form of soft loans, has been working closely with the government of India since 2006 on the high-profile Delhi-Mumbai Industrial Corridor, and has plans for a new collaboration in the Chennai-Bengaluru corridor. Of course there’s a clear Japanese commercial interest in this collaboration—the prospect of India adopting Japan’s bullet trains to upgrade rail travel between these cities—but that can’t fully account for a financial commitment that averages out to around $7 billion per year. It seems clear that Japan’s interests in India’s rise as a stable democracy in Asia, and supporting India’s ability to offset the growth of Chinese influence across Asia, has spurred Japan to meet Indian economic development interests with focused assistance on a large scale.
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