Japan-India Economic collaboration

　

 We have so far reviewed the state of affairs as they pertain to the maritime scene in India today, and as this paper is being presented to an audience of Japanese and Indian practitioners, the natural question to ask is, what are the issues that would merit further discussion with a view to further collaboration between both sides with a view to mutually benefit both? What are the agendas that can be drawn up for future action? But to do that we need to review the state of economic co-operation between the two countries. What is the current state of Japan-India economic collaboration?

　

 Japan is India's third largest trade partner, two-way trade during, for example, the year 2001-02 being $3.54 billion of which Indian exports comprised $1.5 billion.

 The major items of India's export to Japan are marine products (28%), diamonds, gems and jewellery (26%), textile products (12%) and minerals including iron ore (10%). The other items are garments, tea, cut flowers, spices, chemicals, bulk drugs, computer software, leather goods, etc. Japan presently ranks fourth in foreign direct investment in India, behind the United States, Mauritius and United Kingdom. The cumulative approval of Japanese FDI in India is around US $3.1 billion. The actual inflow of Japanese investment from 1991 to August 2002 was around US $ 1251.3 million. The sectors attracting maximum Japanese investment are transportation (28%), telecommunications (18%), fuel (13.5%), chemicals (12.17%) & trading (6.9%). There are also a large number of Japanese technical collaborations, accounting for nearly 7% of total foreign technical collaborations in India. Japanese technical collaborations are concentrated mainly in the areas of electrical industry (26%), transportation (24%), chemicals (9%), industrial machinery (6%) and metallurgy (5%). Japanese investors in India, include Suzuki, Sony, Mitsubishi, Honda, YKK, NTT and Toyota. For the last few years, interaction in the field of IT has increased. The strength of India in the field of IT is now well recognised in Japan not only in the cities like Tokyo and Osaka but also in smaller cities. Some of the smaller cities in fact have taken active interests to promote IT cooperation with India. Now there are more than 40 Indian software companies in Tokyo and surrounding areas. About 800 Indian software engineers are working in Indian and Japanese companies as well as multinational software companies in Japan.

　

 India has been one of the most important beneficiaries of Japanese foreign assistance since the very inception of Yen Loan assistance in 1958, being chosen as the first recipient. Over the years, Japanese Official Development Assistance (ODA) has expanded to cover a wide range of areas from infrastructure, such as, electric power development to health sector and from afforestation to preservation of cultural heritage, making Japan the largest bilateral donor for India during the period 1986-1999.

 In response to India's nuclear tests in May 1998, Japan suspended ODA except for ongoing and humanitarian projects. However in October 2001, Japan unilaterally lifted economic sanctions.

　

Conclusion

　

 Japan-India economic collaboration as an ongoing matter does address issues in the maritime sphere, but perhaps more could be done to deepen this strategic partnership. These issues stem basically from the areas in which it is clear that Indian maritime industry needs to improve and point the way towards meaningful maritime collaboration. Productivity from Indian shipyards has to be increased. Productivity is a function of worker motivation, work rationalisation, production engineering, mechanisation and advanced planning. Modern management techniques have to seep into the age worn traditions of the Indian shipbuilding industry. The supplying industry of marine equipment and machinery has to be developed. International licence needs to be obtained for the manufacture of these specialised equipment and their production started in India. This would also bring some flexibility in the pricing of our ships. Competitive pricing in the international market is hard. Shipbuilding is becoming a subsidised industry in most countries; in India too it has to be, and indeed is increasingly being supported by the Govt. Modern shipbuilding demands are very exacting and we can no longer build ships economically with outmoded methods.

　

 After registering low or no growth for several years, the ports and shipping sectors are beginning to do well again. The major ports registered a 9 per cent growth in traffic in 2002-03. A number of factors are responsible for this growth. On the one hand, capacity is no longer a constraint. On the other, efficiency levels have improved. The average turnaround time of vessels, for example, has been reduced from 3.8 days to 3.1 days. The minor ports have continued to grow at a faster pace and now account for almost 25 per cent of the traffic. There has been uneven progress in private participation in the ports sector. In some areas, like container terminals and greenfield speciality ports, there has been significant private investment; in other areas, like general cargo berths and storage facilities, it has lagged behind. The proposed greenfield port projects at Andhra Pradesh, Kerala or Maharashtra still have to take off. Corporatisation of the major ports, one of the stated goals of the reform efforts, will also help.

　

 Given the Indian government's emphasis on infrastructure building, even if belated , there is an exciting opportunity opening in the Indian economy, and ports, shipping and shipbuilding will all benefit greatly. Agendas for future action relating to these aspects of the Indian economy and maritime spheres would be of great advantage to those willing to invest and participate. Also to the Japan-India strategic dialogue.

　

References:-

1. Various papers, Journal, Indian Infrastructure, Vol 5. No 11. June 2003 and Vol 6. No 1 August 2003

2. Unpublished Paper, Can Indian Ports Be Privatised, by Dr Jose Paul, former Chairman, Marmugoa Port Trust, presented at International Seminar, Indian Ports 2000, Mumbai, Dec 2000

3. Various papers, Journal, Marine Engineer's Review, June 1995 and May 1994

4. Various papers, Journal of Ship Production, May 1996, August 1996, November1997

5. Unpublished Paper, Putting Indian Shipbuilding on the World Map, by Mr. V Kumar, Managing Director Bharti Shipyard, presented at National Shipping Seminar at Goa, Feb 2000

6. Article, Financial Express, New Delhi, 5 April, 2003 , It is Time India Exploited her Maritime Power, By VAdm.(Retd.) M K Roy, Editor SIOS Journal

7. Article, Economic Times, Mumbai, 17 Oct. 2003, Centre plans two maritime varsities, container terminal under Sagar Mala, by Shalini Singh