Indo-Japan Bilateral Relationship - 2 | UPSC Mains: International Relations PDF Download

Economic and Commercial relations

• Japan is regarded as a key partner in India’s economic transformation. In the recent past, the India Japan relationship has transformed to a partnership of great substance and purpose. Japan's interest in India is increasing due to a variety of reasons including India's large and growing market and its resources, especially the human resources. Japan’s bilateral trade with India, totaled US$ 17.63 billion in FY 2018-19. Exports from Japan to India during this period were US$ 12.77 billion and imports were US$ 4.86 billion. The bilateral trade between India and Japan for FY 2019-20 (April – December) totaled to US$ 11.87 billion.  India’s exports from Japan amounted to US$ 3.94 billion while India’s import from Japan amounted to US$ 7.93 billion.India’s primary exports to Japan have been petroleum products, chemicals, elements, compounds, non-metallic mineral ware, fish & fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn, fabrics and machinery etc. India’s primary imports from Japan are machinery, electrical machinery, iron and steel products, plastic materials, non-ferrous metals, parts of motor vehicles, organic chemicals, manufactures of metals, etc.
• Investment and ODA Cumulatively, since 2000 till September 2019 the investments to India have been around US$ 32.058 billion (Japan ranks third now among the major investors). Japanese FDI into India has mainly been in automobile, electrical equipment, telecommunications, chemical, financial (insurance) and pharmaceutical sectors. During FY 2015-16 and FY 2016-17, Japanese FDI into India increased from US$ 2.61 billion to US$ 4.7 billion respectively. Japanese FDI during FY 2018-19 was US$ 2.96 billion. The amount of FDI for FY 2019-20 (April – November) has reached 3.99 billion. The number of Japanese companies registered in India increased 5.0 percent in 2018 compared to 2017 with number reaching to 1,441 as of October 2018, according to the latest joint survey by the Embassy of Japan in India and the Japan External Trade Organization (JETRO). Similarly, number of Indian companies working in Japan is also increasing with number now crossing more than 100. Japan has been extending bilateral loan and grant assistance to India since 1958 and is the largest bilateral donor for India. Japanese ODA supports India’s efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs. The Mumbai-Ahmedabad High Speed Rail, the Western Dedicated Freight Corridor (DFC), the Delhi-Mumbai Industrial Corridor with twelve industrial townships, the Chennai-Bengaluru Industrial Corridor (CBIC) are all mega projects on the anvil which will transform India in the next decade. Japan’s ODA Commitment in FY 2018-19 was at historic highest amount of JPY 522.405 billion. The Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman participated in the G20 Meeting of Finance Ministers and Central Bank Governors on 7-8 June in Fukuoka and addressed the Session on Development Finance and Global Economy. At the Ministerial Symposium on International Taxation on Globally Fair, Sustainable and Modern International Taxation System, she spoke on the ongoing efforts of Indian Government to counter tax avoidance and evasion.
• India-Japan Digital Partnership (IJDP) and Start-up Hub: In view of synergies and complementarities between the two nations, “India-Japan Digital Partnership” (I-JDP) was launched during the visit of PM Modi to Japan in October 2018 furthering existing areas of cooperation as well as new initiatives within the scope of cooperation in S&T/ICT, focusing more on “Digital ICT Technologies”. During Minister Seko’s visit to India in May 2018, both sides signed Joint Statement on Japan-India Startup Initiative setting up the first Startup Hub in Bangalore by JETRO to identify selected Indian start-ups for Japanese market and for potential Japanese investors. Thereafter, Startup-India (under Invest India) and Japan Innovation Network (JIN) have signed a MoU on innovation collaboration with a focus on SDGs (Sustainable Development Goals) connecting two start-up eco-systems in June 2018. At the 5th meeting of the JWG on ICT in India on 7 August 2018, both sides discussed cooperation in the field of cyber security, 5G telecommunication infrastructure, and human resource development in ICT sector in third countries. Along with JWG, a “Disaster Prevention ICT Workshop” was also held. Union Minister of Commerce and Industry Mr. Piyush Goyal attended the G20 Ministerial Meeting on Trade and Digital Economy on 8-9 June 2019 in Tsukuba and participated in discussions relating to increasing trade and cooperation to harness the potential of digital economy. On the sidelines, he held a bilateral meeting with METI Minister Hiroshige Seko on India-Japan bilateral cooperation in trade and investment. India and Japan are jointly launching a fund-of-funds of $187 million (Rs 1,298 crore) to invest in technology startups in India. US$150 million of the targeted corpus will be raised from Japanese investors and the remaining will be raised from Indian investors. Reliance Nippon Life Asset Management Ltd (RNAM) will manage the fund. Four Japanese investors- Mizuho Bank, Development Bank of Japan, Nippon Life and Suzuki have already signed letters of intent. The fund aims to invest in more than 200 Indian companies focused on emerging areas such as Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), fin-tech, healthcare, consumer, education, robotics, automation and businessto-business (B2B) software. MeitY Startup Hub & JETRO signed a partnership agreement to strengthen the Indian & Japanese tech startup ecosystem on 20 January 2020. Under which Meity Startup Hub aims to support Japanese tech-startups in India by providing a soft landing sector-specific tech. incubation platforms for 6 months free of cost. NASSCOM after the success of its start-up delegation in Sept 2019 has now decided to bring start-up delegation to Japan two times a year to organize Live Pitching Event at the Embassy of India. The next edition will be held in March 2020. In last event 26 startup participated out of which three already got significant investment while many other are discussing business partnership with Japanese investors/ companies. 
• Disaster Risk Reduction: Following the 2017 MoC in the field of Disaster Risk Reduction, the Cabinet Office of Japan and Ministry of Home Affairs of India jointly organized a series of workshops to exchange information on policy and measures on disaster risk reduction, and to enhance cooperation between Japan and India. The first workshop was held in March 2018 in New Delhi; the second in October 2018 in Tokyo and the third workshop on 18 March 2019 in New Delhi.
• Skill Development: Under the MoC signed in 2016 to train 30,000 shop floor leaders, Japanese companies have established 12 Japan India Institute of Manufacturing (JIM) in India and 4 Japanese Endowed Courses (JEC) in Indian Engineering Colleges. Following the signing of MoC on Technical Intern Training Programme (TITP), NSDC completed the first round of accreditation of 23 Sending Organizations in March 2018 that are recognized by Japan for accepting interns under TITP. As of March 2019, 31 TITP interns arrived in Japan including the first batch of Indian nurses as elderly care-workers to Japan.
• Healthcare: In view of the similarities and synergies between the goals and objectives India’s AYUSHMAN Bharat Programme and Japan’s AHWIN, both sides had been consulting with each other to identify projects to build the narrative of AHWIN for AYUSHMAN Bharat. Both sides have subsequently concluded a MoC to formalize cooperation under the overall MoC in the field of Healthcare, which includes establishing a high-level consultative mechanism on the lines of HSR cooperation to build robust health care partnership. 1st Joint Committee Meeting between India and Japan was held on 18 October 2019 under the MOC which was co-chaired by Dr. IZUMI Hiroto, Special Advisor to the Prime Minister (Japan) and Dr. Harsh Vardhan, Hon’ble Minister of Health and Family Welfare (India).During the visit of PM Modi to Japan in October 2018, MOC between Kanagawa Prefecture and Ministry of AYUSH was signed to promote Ayurveda. In pursuance to that AYUSH Seminars with the theme of “Healthy Aging with Ayurveda” were organized in collaboration with MoAYUSH, Kanagawa Prefecture, Kobe City, and Tokyo in the first week of December 2019.
• Bilateral S&T cooperation was formalized through an Inter-Governmental Agreement signed in 1985.  Recent initiatives include establishment of three India-Japan Joint Laboratories in the area of ICT (AI, IoT and Big Data); Initiation of DST-JSPS Fellowship Programme for the young researchers; MoU for second phase of Indian Beam Line at KEK Tsukuba for advanced materials research   Setting up the DBT-AIST Advanced International Laboratory for Advanced Biomedicine (DAILAB) at Tsukuba, Japan and Six SISTERs (Satellite International Institutes for Special Training Education and Research) for drug development and therapeutic diseases in India. Around 570 Indian students & researchers have visited Japan under the SAKURA Science programme and HOPE meetings. ISRO and JAXA signed an MoU on 11 November 2016 to pursue future cooperative activities in the use and exploration of outer space exclusively for peaceful purposes. ISRO and JAXA scientists are exploring the possibility of cooperation in realizing a joint satellite mission to explore moon, feasibility study for which is planned to be completed by the end of year 2019. Latest meeting of India-Japan Science Council was held in Tokyo on 1 March 2019. Council approved joint projects, joint seminars and identified speaker for the Raman Mizushima Lecture. Institutional exchanges are growing in R&D in emerging technologies such as AI (in last one year MoU between IIT-Bombay and NEC; IIT-Hyderabad and RIKEN-AIP have been concluded.
• Sister-State and Sister-City Cooperation: There are growing links between Japan’s Prefectures and States in India. As of now 7 Indian states (currently active 6 MoUs) and 3 cities/regions in India have partnered with the Prefectures and Cities of Japan through MoUs to cooperate under diverse sectors.
• Indian Community in Japan: In recent years, there has been a change in the composition of the Indian community with the arrival of a large number of professionals, including IT professionals and engineers working for Indian and Japanese firms as well as professionals in management, finance, education, and S&T research. Approximately 38,000 Indians live in Japan.