JAPANESE PLEASED WITH VISIT OF INDIAN PRIME

C O N F I D E N T I A L SECTION 01 OF 05 TOKYO 007067

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/17/2016
TAGS: PREL ECON EAIR EINV ETRD SCUL KNNP IN JA
SUBJECT: JAPANESE PLEASED WITH VISIT OF INDIAN PRIME
MINISTER

REF: A. TOKYO 6468


B. NEW DELHI 3187

Classified By: Ambassador J. Thomas Schieffer for reasons 1.4(b),(d)


1. (C) SUMMARY: Japanese officials are pleased with Indian
Prime Minister Singh's December 13-16 Tokyo visit, according
to MOFA contacts. During the visit, the "Global Partnership"
inaugurated in 2000 was elevated to a "Strategic and Global
Partnership" calling for closer political and diplomatic
coordination on bilateral, regional, multilateral and global
issues, as well as comprehensive economic engagement,
stronger defense relations, and greater technological
cooperation. In the Joint Statement, PM Abe's desired
announcement of a U.S.-Japan-India-Australia quadralterial
was, in the end, cast as "dialogue" between India and Japan
"and other like-minded countries in the Asia-Pacific region.
On India's request for Japanese support for the U.S.-India
civil nuclear agreement, Japan, as predicted, would only
commit to continuing to discuss this subject with New Delhi.
Japan succeeded in including language on North Korea, and
both parties reaffirmed their commitment to push for
"comprehensive reform" of the UN Security Council. Despite
high hopes for new life in a sluggish economic relationship,
one well-placed observer predicts increased trade and
investment will be easier wished for than done. And the
announced intention to increase the few existing direct
flights between the two countries is likely to bump up
against commercial realities. END SUMMARY.

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A POSITIVE VISIT
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2. (C) Japanese authorities are very pleased with the outcome
of Prime Minister Singh's December 13-16 official visit to
Tokyo, MOFA India Desk official Naoshige Aoshima told Embassy
Tokyo Political Officer December 18. The general consensus
in the Ministry is that Singh's visit was more substantive
and significant than Chinese President Hu Jintao's November
visit to New Delhi, thus "qualifying it as a success." In
addition, the agreement to call the India-Japan relationship
a "Strategic and Global Partnership" is proudly seen here as
more impressive than the India-China "Strategic and
Cooperative Partnership." The highlights of Singh's visit
were his call on the Emperor and Empress, meeting with Prime
Minister Abe, and the signing of the Joint Statement that
sets forth the future of the relationship. Indian Embassy
First Secretary Pise Prashant told Embassy Tokyo Political
Officer that the Indian Embassy also considered the visit to
be a success, although he was not quite as exuberant about
its long-term prospects.

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SPEECH TO THE DIET
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3. (U) Prime Minister Singh's first major public appearance
was before a Joint Session of the Diet on December 14, in
which he called for greater cooperation between India and
Japan and announced 2007 as "India-Japan Friendship Year."
(NOTE: 2007 is also "India-China Friendship Through Tourism
Year." END NOTE.) Observing that Japan and India share the
universally respected values of freedom, democracy,
fundamental rights, and the rule of law, Singh stated that,
accordingly, "India and Japan must play their rightful and
commensurate role in the emerging international order."
Pronouncing that economic ties must be the bedrock of the
relationship, Singh pointed to the "knowledge economy" as the
most important area in which to build a partnership, and
mentioned as possible areas of cooperation nano-technology,
bio-technology, life sciences, and the information and
communication sectors. Singh then previewed the talks he
would have with Prime Minister Abe December 15 by noting
other areas of mutual interest, including energy security,
defense cooperation, terrorism, and U.N. reform. On nuclear
energy, Singh stated that India sees nuclear power as a
viable and clean energy resource and asked for Japan's
support in "helping put in place innovative and forward
looking approaches" that will help India realize this
potential. Singh invited Japanese businesses to invest in
India, slightly altering the phrase, "an arc of freedom and
prosperity" coined by Foreign Minister Aso in a recent
foreign policy speech by stating, "Our partnership has the
potential to create an 'arc of advantage and prosperity'

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across Asia, laying the foundation for the creation of an
Asian Economic Community." The fact that Singh was able to
address the Diet was, in itself, a positive accomplishment.
We had been told in advance of the visit by Diet member
Yasutoshi Nishimura - a leading India booster - that such a
speech would be unlikely, given the Diet's preoccupation with
wrapping up its session by December 15.

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THE JOINT STATEMENT
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4. (U) The Joint Statement
(www.mofa.go.jp/region/asia-paci/india/pdfs/j oint0612.pdf)
released by both governments on December 15 is divided into
six sections: (1) Strategic and Global Partnership; (2)
Political, Defense and Security Cooperation; (3)
Comprehensive Economic Partnership; (4) Science and
Technology Initiative; (5) People-to-People Exchanges; and
(6) Regional and Multilateral Cooperation. The first,
"Strategic and Global Partnership" sets forth the
commonalities shared by both countries and calls for closer
political and diplomatic coordination on bilateral,
regional, multilateral and global issues, as well as
comprehensive economic engagement, stronger defense
relations, greater technological cooperation, and, hopefully,
a "quantum increase" in cultural ties, educational linkages,
and people-to-people contacts.

Political, Defense and Security Cooperation
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5. (C) This section commits both sides to participate in
annual summit-level meetings, enhanced contacts at the
ministerial level, the institutionalization of the Strategic
Dialogue at the foreign minister-level, and the creation of a
regular Policy Dialogue between the Indian National Security
Advisor Narayanan and his Japanese counterpart. As mentioned
reftel B, Aoshima said MOFA officials are in a quandary about
who exactly Narayanan's counterpart will be. The
"candidates" are Special Advisor to the Prime Minister for
National Security Koike or, perhaps, Chief Cabinet Secretary
Shiozaki. The section also addresses enhanced defense
cooperation, including a goodwill exercise conducted jointly
by the Japanese Maritime Self Defense Force and the Indian
navy sometime in 2007. The section continues that Japan and
India will work together to ensure the safety and security of
international maritime traffic, combat piracy, and foster
exchanges between Coast Guards. The section also calls for a
new Japanese consulate in Bangalore, which, under current
budget constraints, represents a victory for India supporters
within the Japanese government. Finally, paragraph 13
declares that both countries unequivocally condemn terrorism.


Comprehensive Economic Partnership
--------------


6. (C) As mentioned in Singh's speech, the economic
relationship is the "bedrock" of India-Japan ties (reftel A).
Accordingly, this is the longest section of the statement.
The major highlight is confirmation that India and Japan will
launch immediate negotiations on a bilateral Economic
Partnership Agreement/Comprehensive Economic Partnership
Agreement (EPC/CEPA),with a goal of completion within two
years. Aoshima revealed that the intention to complete the
agreement in two years was the subject of much interagency
debate. While MOFA supported including this milestone, the
Ministry of Economy, Trade, and Industry (METI),the Ministry
of Finance, and the Ministry of Agriculture, Forestry and
Fisheries were opposed. He explained that it is not
traditional for the Japanese to be so specific in such
statements when discussing the future of negotiations, but
the Indians insisted and MOFA supported them.


7. (U) As expected, the economic partnership section also
notes a number of areas for cooperation (reftel C),including
the announcement of a Japan-India Special Economic
Partnership Initiative (SEPI) to promote Japanese investment
in India. The SEPI sets out a number of specific projects
grouped under the headings of Development of Infrastructure
and Promotion of Manufacturing, Trade and Investment, and
Human Resource Development for Promotion of Manufacturing.
The Policy Dialogue between METI and India's Ministry of
Commerce and Industry is upgraded to the Ministerial level,

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existing and future investments by Japanese companies in the
Indian economy are noted, and the establishment of a Business
Leaders' Forum comprising ten business leaders from each
country is also announced. The model for this organization
is the existing U.S.-India CEO Forum.


8. (C) Global energy security issues are also addressed and
the establishment of a Japan-India Energy Dialogue is
endorsed. Addressing non-proliferation, the Joint Statement
notes the launch of a consultation mechanism designed to
facilitate bilateral high technology trade and address
matters relating to respective export control systems of the
two countries. According to Aoshima, this paragraph, 28, was
also the object of some contention. METI maintains a list of
foreign entities subject to export controls that currently
lists 33 Indian companies. India wants this number reduced,
but METI is adamant that the issue is not a matter for
discussion with foreign governments. Aoshima acknowledged
that MOFA is inclined to support the Indian point of view on
this.

Science and Technology Initiative
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9. (U) The fourth section refers to ongoing science and
technology exchanges and announces the launch of a joint
research and development program in areas such as
nano-technology, life sciences, and information and
communication technologies. It also calls for the development
of an open access database for the sharing of research, and
enhanced collaboration in the area of scientific deep sea
drilling. Cooperation between the Japan Aerospace
Exploration Agency and the Indian Space Research Organization
is also noted.

People-to-People Exchanges
--------------


10. (U) The Joint Statement calls for a "quantum increase in
cultural, academic and people-to-people exchanges" and sets
forth a number of initiatives to achieve that result. These
include expanding the number of visitors between the two
countries to 5,000 in the next three years, stepping up
exchanges under India's recent designation as a target
country for the Japan Exchange and Teaching (JET) program,
and the promotion of Japanese language studies in India with
a target of 30,000 students by 2010. The two Prime Ministers
further agreed to designate 2007 as the "Japan-India Tourism
Exchange Year" and welcomed the positive outcome of bilateral
civil aviation talks, directing the responsible authorities
to expeditiously expand air links "commensurate with the
requirements of growing economic relations and enhanced
tourist flows."


11. (SBU) Realizing an increase in direct flights between
India and Japan will most likely be more difficult than
hoped. Currently, while Japan and India's bilateral air
agreement authorizes 14 flights per week, only 11 direct
flights now link the two countries. The goal of the
agreement, according to press reports, is to triple the
weekly total to 42 flights per week (with each country having
rights to 21). Aoshima said increasing flights presents a
number of potential problems. First, Air India would like to
fly to Narita, but this is "impossible" given the lack of
available slots at that airport. Instead, Japan wants to see
Air India fly to either Kansai or Nagoya. In addition, if
the number of flights is to be increased, All Nippon Airways,
which discontinued flights in India in 2001, is likely to
want to get back into the market, a fact that Japan Airlines
does not appreciate.


12. (C) Nonetheless, the increase in flights is an important
symbolic gesture. Whether it is flight frequency or number
of tourists, the Japanese government casts people-to-people
exchanges as a measure of the Japan's relative relationships
to China and India, as well as the relationships' long-term
prospects. Aoshima has stressed the exchanges to Embassy
officers in previous meetings, and MOFA's standard briefing
on Japan-India relations includes such direct comparisons as
the number of Indian vs. Chinese tourists to Japan (1:19),
the number Indian vs. Chinese exchange students in Japan
(1:196),the number of Indian vs. Chinese learners of
Japanese (1:62),and the number of India-Japan vs.
China-Japan air flight connections (1:61). The Joint
Statement includes several measures that directly address

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these relative positions.

Regional and Multilateral Cooperation
--------------


13. (U) Japan and India agree to work closely in the East
Asia Summit framework while acknowledging that ASEAN is the
driving force in creating a new regional architecture. In
addition, they agreed to undertake studies to advance earlier
proposals for a Pan Asian Free Trade Area and for a
Comprehensive Economic Partnership in East Asia.


14. (U) Both countries pointed to the role of the G-4 in
bringing Security Council reform to world attention and
agreed to strengthen cooperation and coordination for
comprehensive reform of the United Nations, including the
expansion of the Security Council in both permanent and
nonpermanent categories to reflect contemporary realities of
the world.


15. (C) With regard to a possible quadrilateral grouping
combining the United States, Australia, Japan, and India, the
final statement in paragraph 46 reads as follows: "The two
leaders share the view on the usefulness of having dialogue
among Japan, India and other like-minded countries in the
Asia-Pacific region on the themes of mutual interest. The
two governments will consult on the modalities." Aoshima was
unable to provide any atmospherics on how the Indians reacted
to this phrasing. The fact that Prime Minister Abe hoped to
announce a quadrilateral partnership was no secret and has
been mentioned in the press. Embassy will continue to
monitor whether the media notes the distinction between what
was promised and what was announced, but thus far (December
20) there has been no media comment.


16. (C) As predicted, the Japanese did not give the Indians
the clear support they sought for the U.S.-India civil
nuclear agreement. According to Aoshima, obtaining this
support was a top priority for the Indian delegation (reftel
B). The best Prime Minister Abe was willing to give was an
acknowledgment (para. 50) that nuclear energy can play an
important role as a safe, sustainable and non-polluting
source of energy, that international civil nuclear energy
cooperation should be enhanced through constructive
approaches under appropriate IAEA safeguards, and that India
and Japan will continue to discuss the international civil
nuclear cooperation framework with respect to India. (Note:
One former MOFA official told us that India's request had
essentially split MOFA, with an Asia group supporting
cooperation with India despite its nuclear program and a
non-proliferation group arguing against. The split reduced
MOFA to a "wait and see" position, or, as Aoshima more
optimistically put it in a previous meeting, MOFA sought a
way to add a "positive nuance" to the statement language
without changing the government's neutral stance.)


17. (C) Of great importance to Japan was the inclusion of
language addressing the threat posed by the DPRK. The
Indians were initially opposed to including any language that
named another country. Eventually language (para. 49) citing
a shared "grave concern" over the North's nuclear test was
adopted, along with a sentence stressing the need to fully
implement UNSCR 1718. The Japanese also prevailed on the
Indians to accede to language urging that the abduction issue
be resolved at the earliest as a humanitarian concern. One
word the Indians did insist upon in this paragraph was
"clandestine", in that the nuclear test by the DPRK "has
greatly complicated the security situation in the region and
highlighted the true extent of clandestine proliferation."

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BUT WILL IT PLAY?
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18. (C) Japan and India undeniably share many basic values
and see each other as important political and trading
partners for today and into the future. Questions remain,
however, about if and when this relationship can really take
off. Sakutaro Tanino, former Ambassador to India ('95-'98)
and China ('98-'01) and current director at Toshiba, told
Political Officer that many people in the government
wishfully see India as an economic counterweight to China.
This trend is driven by Prime Minister Abe, Foreign Minister
Aso, and Shoichi Nakagawa, Chairman of the LDP's Policy
Affairs Research Council, who Tanino says share strongly

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critical views of China and who have had personally positive
experiences with India. He downplayed the idea of India as a
counterweight for China, saying that although Japanese
interest in India is soaring and the Indian economy is
making impressive gains, many roadblocks remain to full-scale
Japanese investment in India. Despite strained political
ties with Beijing, China will continue to be Japan's major
trading partner in Asia.


19. (C) Tanino said he believes that India has many positive
attributes: shared basic values on issues such as democracy,
rule of law, freedom of speech, and market economics; warm
sentiments toward Japan untainted by negative historical
conflicts; a geographically strategic location; a huge market
yet to be penetrated; and a huge human resources potential
perfect for expanding manufacturing, software, and
information technology operations. He noted that Toshiba has
sent young technicians to be trained in India and they come
back in four months having learned more than they learned
during their entire time in college in Japan. But at the
same time, there are many impediments to effective trade and
investment. He mentioned the poor quality of basic economic
infrastructure, including daily power shortages, outdated
airports, and poor seaport facilities, along with a
bureaucracy that is crushingly difficult to navigate through.
Finally, the very different culture in India makes it
difficult for Japanese to success fully work there. While
the Indians are very hospitable and warm on a personal basis,
they have a top-down business culture that is very foreign to
Japan's bottom-up way of doing business. The language
barrier is also problematic, said Tanino. He also believes
India suffers from a strong, almost xenophobic sentiment that
opposes foreign investment. He said that the reason Suzuki,
a Japanese car manufacturer, has been so successful in India
is because it completely turned over every aspect of its
operations to Indians and let them run the business
themselves.


20. (C) Tanino admitted that some of India's infrastructure
deficiencies offer potential in themselves for major Japanese
investments, but his bottom line was that developing trade
with India will take a long time and it is not a substitute
for trade with China. (Note: Japan's trade with India is
currently one-thirtieth of its trade with China, and the
relative investment is one-fiftieth.). As for Japan's
fixation with countering Chinese moves in India, Tanino said
that this is not reciprocated by China, given the
increasingly wide gap between China-India trade and
Japan-India trade. He concluded with the reminder that there
are many official and state visits of the type just
undertaken by PM Singh, and that one visit will not change
everything overnight.

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COMMENT
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21 . (C) We believe there is a genuine desire by the
leadership of both India and Japan to greatly enhance their
relationship. And we concur with Embassy New Delhi's call to
look for concrete measures to build upon the shared values
and positive momentum in our relationships with the Indians
and Japanese. (Reftel D.) We will continue to monitor
developments between Tokyo and New Delhi and remain alert for
potential breakthroughs and opportunities.
SCHIEFFER