Article 109

India and Japan
Making hay under the rising sun

By M.L. Sondhi
The Pioneer, March 5, 1992

India must impress upon Japan that its liberalization is not merely to overcome the BoP crisis but that it is an earnest process to join the global economic mainstream, says M.L. Sondhi

Indian insensitivity to Japan was in evidence from the time Prime Minister Kishi paid a visit to India, the first ever by a Japanese Prime Minister.  He was keen to institutionalize mutual understanding between India and Japan as part of a new peace order.  Unfortunately, Nehru was so caught up with the hipolarity of the cold war system that he refused to respond to Kishi’s initiative in any meaningful manner. As a self-declared interlocutor on behalf of the Afro-Asian world, Nehru in so many words pooh-poohed the importance of Japan and refused to foresee any changes in the global distribution of power.  One of the major weaknesses of Indian foreign policy-making on Japan has been the lack of deep understanding of Japanese political culture and the evolution of Japanese foreign policy in both its political and economic dimensions.

Although there is an impressive record of economic, political and cultural relations between India and Japan, the cold war confrontation between East and West inevitably resulted in Tokyo and New Delhi remaining passive spectators with regard to many issues on which it was necessary to develop an integrated approach.  Policy makers and intellectuals were reluctant to evaluate the past on a scientific basis.  For example, the archives of the period of Subhash Chandra Bose and the Indian National Army were not seriously studied with the possibility of building a solid future relationship.

Now that the cold war is over it should be recognized that Bose’s contribution to Indo-Japanese relations is crucial and it is an important task for historians and policy makers to sort out the legacy of cooperation between the Indian freedom movement and Japan so as to build future Indo-Japanese relations on a firm foundation.  To begin with, the popular misconceptions about the Tokyo Verdict and the Enemy clause in the UN Charter need to be removed.  To those who are familiar with the documentary sources on the Tokyo Verdict, the arguments of Judge Radha Binode Pal, the eminent Indian Jurist sound more convincing and logical today than the majority judgement which comes out poorly on grounds of objectivity and rationality.

It is critically important for India and Japan to take the initiative to develop a movement to depart from the frozen official attitudes towards the Tokyo Verdict.  Although it may be a long and difficult process, the time is approaching when the reversal of the Tokyo Verdict will be regarded as a stage of maturity in international law and relations in the post-cold war era.

As for bilateral relations, the prospects and possibilities of cooperation may be categorized under five main programme areas and prescriptions offered for adjusting Indian and Japanese policies to the new international environment.  First, initiatives arising out of the liberalization of the Indian economy.  Policy makers of both the countries have to understand that the changes that have now begun to take effect in the Indian economy are related to a broader vision of international, economic and political problems.  Both the Indian government and business firms have to tap the best sources of economic information and technologies and managerial expertise to mobilize Japanese surplus for India.

Second, giving impetus to Indo-Japan economic ties.  An important question for economic negotiators from India is how well they can communicate to the Japanese side the reality of India’s movement towards global integration.  Japan has enough reason to be cautious about socialist-minded officials from India, but Indian companies which are involved in trading with Japan can be important links for influencing Japanese sensitivities to the Indian reform package and for stimulating government action for attracting foreign direct investment from Japan.

The channeling of non-traditional items from India into the Japanese distribution system requires energized export drives and penetrating analysis of India’s export structure.  New initiatives should be undertaken to learn from the experience of other countries which have histories of export-led growth, and government and private sectors should join hands to boost Indo-Japanese economic ties.

Third, international capital transfer.  Indian officials who handle economic cooperation with Japan have often failed to realize that if India is going to make a breakthrough on the economic front it can only be by tapping Japan as the main source of capital and technology.  Many of India’s economic actions in the past decades have been painfully out of step with what was needed for a genuine Indo-Japanese economic partnership.

The crisis in the former Soviet Union has revealed that much of Indian economic cooperation with the communist block was never subjected to real scrutiny.  Soviet insolvency has now placed India in a difficult position.  India’s efforts to move into a free market economy can only succeed by a real commitment to international competitiveness; viable economic decisions must therefore be taken in a timely manner if Japan is to be convinced that India has removed the last vestiges of Soviet-style economic practices.

Fourth, Japanese overseas investment policy.  It is reasonable to say that if Japan continues to adopt a policy of “wait and see” towards the Indian effort to become fully integrated with the world economy, it will not be an encouraging sign to other countries.  For both aid and commercial borrowing, Japan’s role is crucial if India is to aim at a high rate of sustained economic growth.

There is no point in only harping on the undesirable developments on the Indian economic scene.  The recognition that many of India’s problems are of a structural nature is accepted by the general consensus in the policy making process.  It is therefore necessary that the Japanese side should reconsider the first impressions about India and Japanese companies should draw up their investment plans in India in terms of the new chances for Japan in a changing India.

On the other hand, India should learn to lobby in Japan in an effective manner so the Indian liberalization policy is not seen as an expedient for overcoming the balance of payments crisis but is perceived as a process which India is addressing in earnest for realistic solutions to our economic problems.

Lastly, peace and prosperity in Asia.  The Asianisation of Indian foreign policy and the Asianisation of Japanese foreign policy are both necessary for developing salient approaches to major changes in the global political system and to develop new mechanisms to promote peaceful management of conflicts in Asia.  The Japanese involvement in the Indian economy should be viewed in the context of the emerging world order and as an indicator of the possibilities for long term peace and security in Asia.

At a time when the Soviet Union is facing both economic bankruptcy and political and social disruption, the new Indo-Japanese economic relationship will be an evidence of a programme in developing a more orderly world and help to strengthen democracy and freedom in Asia.

It is necessary that both India and Japan should find their place as Permanent Members of the Security Council in the UN system so that both countries should lend historical and political perspective to the emerging reality of Asia in the new world order.