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India likely to finalise first defence purchase from Japan

Highlights
  • India and Japan are teaming up to roll out big infrastructure and connectivity projects in Asian and African countries
  • India is looking to more collaboration with Japanese nuclear companies
  • Japan is looking for defence partnerships that deliver ballistic and cruise missiles to counter North Korea

India and Japan will not break new ground during Japanese Prime Minister Shinzo Abe's visit, which begins today. But as a detailed joint statement, still being worked out, will reveal, the two sides are digging deep in their bilateral relationshi.

Japan is now possibly India's closest strategic partner in the world, as both sides converge in their strategic and economic outlook.

It will be in the field of defence and nuclear technologies that India and Japan hope to get to the next level. India is likely to finalise the first defence purchases from Japan, the US-2 amphibious plane that has been tossed around between the two governments for some years. Some element of 'Make in India" may be introduced, but the two sides are looking at a future where joint development will be the key. Given the fact that bureaucracies in both countries are notoriously slow and suspicious, this will take a while, needing strong political push to get it off the starting block. On the other side, with the North Korean crisis deepening, Japan is looking for defence partnerships that deliver ballistic and cruise missiles, as was made clear by Katsuyuki Kawai, Abe's top foreign policy adviser, who was in New Delhi last week.

Countering China, India and Japan are teaming up to roll out big infrastructure and connectivity projects in Asian and African countries. The Asia-Africa growth corridor is slowly getting off the ground, and while it will never be as nimble as the Chinese OBOR, India and Japan are working on a different philosophy, involving more local interests and participation.

With the completion of the civil nuclear deal, India is looking at more collaboration with Japanese nuclear companies. The deal was finally signed between India and Japan in November 2016, and the Japanese parliament cleared it in June 2017.

The financial troubles of Westinghouse has necessitated a change in strategy. The Indian government will roll out the proverbial red carpet for the hundreds of Japanese nuclear companies whose expertise is desperately in need of markets, after Fukushima closed doors in Japan and many western countries.

The model will be different from the Russian one, where the foreign partner builds entire reactors from scratch, as would have happened with Westinghouse or GE-Hitachi. Instead, Japanese companies like Hitachi, Toshiba, Mitsubishi and numerous smaller nuclear companies are being invited to invest and provide support services for designing, building and operating reactors to Indian companies. For instance, Westinghouse, owned by Toshiba, is being invited to prove technology, components and equipment as well as service expertise for six reactors in Andhra Pradesh which would have earlier been a turn-key project, but now may be done with an Indian partner.

Here the Indian government's decision in May to build 10 new nuclear power reactors is expected to provide a glide path for Japanese companies. It also shifts India's focus from negotiating for full reactors to using Japanese expertise and technology to augment Indian capacities, and, India hopes, in time to look for third country markets. It would have helped India if its membership to the NSG was through, but there is little hope here that will be done anytime soon. Until then, India plans to use the waiver granted to it in 2008 to the fullest.

The high speed railway (HSR) groundbreaking ceremony, India reckons is a gateway to a different way of life and work for Indians, just as the Maruti Suzuki and the metro changed the face of urban transportation in India. The two sides are already looking at adding new lines to the high-speed railway network, one of the aims being to connect the major metropolises in India via HSR in the coming years.


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