Japan Bets Big on India: Abe Lends New Delhi the Same Helping Hand that China and Southeast Asia Leveraged to Take Off
In the early 1990s, just a few years after the Tiananmen Square crackdown drew international opprobrium, China began raking in foreign investment. Between 1990 and 1996 some $435 billion was committed to China, helping to fuel that country’s transformative economic modernisation. Japanese pledges during that period accounted for a significant proportion, including almost 11% of total investment into Shanghai. At the same time, Tokyo was committing similar amounts to the Asian Tigers (Singapore, Hong Kong, South Korea and Taiwan) and to the emerging economies of Southeast Asia (Thailand, Indonesia and Malaysia).
If there is one takeaway from Prime Minister Shinzo Abe’s just concluded visit to India, it is that Japan is willing to make the same big bet on India that it once did on China and Southeast Asia. During Abe’s visit, Japan and India signed a spate of agreements – 16 in all. But there were four developments of major significance.
The first was the much-anticipated agreement to introduce high-speed railway technology between Mumbai and Ahmedabad, with financial and technical assistance from Japan. If seen through to its full conclusion, this agreement has the potential to create a valuable demonstration effect for Indian infrastructure, much as Hyderabad showed that India could have world-class airports or Delhi demonstrated the possibility of efficient and safe metro rail systems.