C O N F I D E N T I A L SECTION 01 OF 04 TOKYO 003015

SIPDIS

E.O. 12958: DECL: 10/29/2018
TAGS: PREL PARM ECON EAID ENRG MARR TSPA SENV KGHG
KSCA, KNNP, KUNR, XB, IN, JA
SUBJECT: JAPANESE PLEASED WITH VISIT OF INDIAN PM SINGH

REF: TOKYO 2794

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


1. (C) SUMMARY: Japanese officials are pleased with Indian
Prime Minister Manmohan Singh's October 21-23 visit to Tokyo.
The primary objective of the visit was to solidify and move
forward with the "Strategic and Global Partnership" between
India and Japan. The visit's major deliverable was the
commitment by Japan to grant an approximately 450 billion yen
loan (USD 4.5 billion) to India to help construct a freight
railway corridor between New Delhi and Mumbai. This loan
will constitute the largest Official Development Assistance
(ODA) loan for a single project in Japan's history. The two
prime ministers also signed a "Joint Declaration on Security
Cooperation between Japan and India." Although Japan has
signed similar declarations with only the United States and
Australia, MOFA officials downplayed its significance,
stating that "it contains nothing new." Other key issues
addressed during the visit included the status of an Economic
Partnership Agreement, climate change, nuclear power and
energy issues, United Nations Security Council reform,
regional architecture, and the global financial crisis. END
SUMMARY.

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JAPAN-INDIA "ANNUAL" SUMMIT
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2. (C) Other than a cursory meeting July 9 between Prime
Minister Singh and former Prime Minister Fukuda on the
margins the Lake Toya Hokkaido G-8 Summit, the October 22
meeting between Singh and Prime Minister Taro Aso marked the

first substantive summit meeting since former Prime Minister
Abe visited India in August 2007. According to the Joint
Statement signed by both leaders, such meetings are now to
take place annually. MOFA Southwest Asia Division Principal
Deputy Director Aya Yoshida confirmed to political officers
that there is now an agreement setting forth a rotating
annual summit schedule. Accordingly, the 2009 meeting will
be held in New Delhi. Notably, Singh is the first foreign
head of government to visit Japan since Aso assumed the prime
ministership. Yoshida also explained that the Japanese
wanted to signal that their relationship with India remains
strong in spite of recent differences of opinion in the
Nuclear Suppliers Group (NSG) about the U.S.-India civil
nuclear deal.

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HUGE ODA LOAN
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3. (C) The centerpiece of the visit was the announcement by
Japan of a 450-billion yen (USD 4.5 billion) ODA loan for the
western corridor of the Dedicated Freight Corridor (DFC)
project -- the "flagship project" of Japan-India cooperation.
The loan -- which is the largest ever made for a single
project in Japanese ODA history -- will finance engineering
services for the first phase of the project. According to
Yoshida, the loan will utilize Japan's Special Terms of
Economic Partnership scheme, meaning that much of the work
will done by Japanese firms. The DFC project is linked to
the Delhi-Mumbai Industrial Corridor Project (DMIC). The
concept is to construct a high-speed electrical railway for
freight between Delhi and Mumbai, which will serve as the
spine for business and industrial centers bringing new
infrastructure, investment, and economic prosperity to the
areas in the corridor. Yoshida said that in addition to
participating in the design and construction of the project,
existing Japanese enterprises in the corridor area will

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benefit from the new avenue to move their goods and products.

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JOINT DECLARATION ON SECURITY COOPERATION
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4. (C) Another significant outcome of the summit was the
"Joint Declaration on Security Cooperation between Japan and
India." However, according to Yoshida, the areas for
cooperation listed in the declaration break no new ground and
have already been agreed to, although in not such a formal
document. MOFA negotiated the agreement some time ago, she
said, and while the Ministry of Defense and other involved
ministries were consulted during the drafting process, they
did not play a direct role in forging the declaration. In
fact, neither PM Singh nor any member of his delegation met
with the Ministry of Defense during the visit. Yoshida also
sought to underline that great care was taken to not make it
seem as if Japan-India security cooperation is aimed at China.


5. (C) Yoshida was at a loss to explain why the declaration
was necessary if it doesn't signify any new developments. In
response to a question about whether Prime Minister Aso might
be seeking to resurrect former Prime Minister Abe's
U.S.-Australia-Japan-India "quad" idea, she replied that MOFA
has not received any instructions from the Prime Minister's
office to revisit this initiative. (COMMENT: It may be that
the Japanese desired to enter into such a visible but
allegedly "inconsequential" security arrangement with India
in order to highlight the fact that its relationship with
India is more "strategic" and "global" than the India-China
relationship. END COMMENT.)


6. (C) According to the declaration, the two countries agreed
to a comprehensive framework for the enhancement of security
cooperation, to include: consultations at the Ministerial,
Vice Ministerial, and Director General levels in both MOFA
and MOD; military and student/researcher exchanges;
consultations at the National Security Advisor level; Coast
Guard cooperation; bilateral consultation on
counter-terrorism cooperation; information sharing on
suspicious financial transactions; cooperation on developing
a tsunami disaster map in India; capacity building through
information sharing on disaster prevention and preparedness;
and cooperation between the Japan Aerospace Exploration
Agency (JAXA) and the Indian Space Research Organization
(ISRO) in the field of disaster management.


7. (C) COMMENT: With regard to cooperation between JAXA and
ISRO, Embassy Tokyo's NASA Attache reports that in a
relatively new "Space Diplomacy" program over the past few
years, MOFA has been urging JAXA to be more active in Asia,
particularly with regard to India and Southeast Asia. JAXA
has set up an office to promote the use of their satellite
data in Southeast Asian countries; data which includes free
data and JAXA technical expertise on how to use it for things
like flood prevention. They have also started offering
opportunities to conduct science experiments in their lab on
the Space Station on behalf of other partners in the region,
for example, South Korea and Malaysia. India is more
advanced than other countries in the region, so the two sides
are discussing building a joint satellite for disaster
monitoring, with data shared around the region. NASA Attache
believes this has been one of JAXA's most successful
programs, with true benefits to the countries in the region
and a resulting positive view of JAXA. China is pointedly
not included. END COMMENT.

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ENERGY ISSUES, NUCLEAR POWER, AND CLIMATE CHANGE

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8. (C) The two leaders agreed to accelerate cooperation on
energy efficiency and conservation issues as set forth in the
last summit in August 2007. Aso and Singh also agreed that
the Energy Ministers will exchange views and information on
nuclear energy policies. With regard to India's nuclear
program and the recent U.S.-India nuclear accord, Japan finds
itself caught between two of it's bedrock policy imperatives:
non-proliferation and climate change. For example, Aso
agreed with Singh that nuclear power can play an important
role in providing safe, sustainable, and non-polluting
energy. At the same time, Aso stressed Japan's strongly-held
view that international disarmament and non-proliferation
efforts must be reinforced. According to Yoshida, PM Aso did
not want the nuclear issue to become contentious and did not
touch on sensitive issues already discussed at Nuclear
Suppliers Group meetings. That said, Aso emphasized that
India must have a clear commitment to non-proliferation.
Specifically, before Japan can begin to consider providing
nuclear technology to India, India must clearly affirm that
it will not again test a nuclear weapon. Yoshida said Tokyo
realizes this will be a difficult condition for India to
meet, and hinted that perhaps the Japanese position could
soften over time.


9. (C) Major Japanese companies including Toshiba, Hitachi
and Mitsubishi Heavy Industries, all want a piece of the
Indian nuclear power plant market and are frustrated that
they cannot move forward to compete for contracts, according
to press reports. PM Singh told PM Aso that he understands
Japan's sensitivity and that India will move forward with
Japan at a pace that Japan is comfortable with, Yoshida said.
(Note: Embassy contacts at MOFA's International Nuclear
Energy Cooperation Division confirmed the Japan has no plans
to proceed with negotiations on a nuclear cooperation
agreement with India at this point. End Note.)


10. (C) India continues to reject binding greenhouse gas
emission or energy intensity targets, such as those suggested
by Japan in its UNFCCC submission (reftel), and still has
strong reservations about sector specific targets, Yoshida
continued. According to the Joint Statement, the Indian side
welcomed the various initiatives taken by Japan, and Aso and
Singh expressed support for the Bali Action Plan and the
principle of common but differentiated responsibilities and
respective capabilities. They reaffirmed the desirability
for the UNFCCC parties to adopt a long-term goal for reducing
global emissions and pledged to cooperate closely in this
regard toward COP-15 next year. According to MOFA Climate
Change Division Director Kenichi Kobayashi, who characterized
the talks as "basic," although Japan sought India's
understanding of Japan's UNFCCC proposal, the talks did not
break new ground.

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ECONOMIC ISSUES
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11. (C) The two Prime Ministers expressed satisfaction with
the growth in bilateral trade, which is expected to reach USD
20 billion by 2010. They also welcomed substantive progress
toward achieving an Economic Partnership Agreement. However,
Yoshida confirmed that the Japanese side had hoped to be able
to announce an EPA at the summit and was disappointed that
last-minute negotiations had failed to close a deal. She
said that MOFA, which has the lead in the negotiations,
remains cautiously optimistic that a deal can be reached by
the end of the year, but said that there are still "technical
issues" to be resolved.

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12. (C) With regard to the current financial crisis, Aso and
Singh shared the view that India and Japan should continue
discussions on promoting global and regional economic
stability and growth. They touched on the effect of high oil
prices and rising food prices, and discussed the current
status of the WTO Doha Development Agenda, reaffirming their
will to continue to cooperate towards an early and successful
conclusion of the negotiations with a balanced and
comprehensive outcome.

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OTHER ISSUES
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13. (C) Some of the other issues addressed by the two Prime
Ministers included the following:

-- Regional Architecture: the leaders reaffirmed their
support for the East Asia Summit as an open, inclusive,
transparent and Leaders-led forum to promote cooperation on
issues of common interest and to deepen regional economic
integration, and welcomed the establishment of the Economic
Research Institute for ASEAN and East Asia;

-- United Nations: they shared the view that the reform and
expansion of the Security Council are central to the process
of a comprehensive reform of the UN;

-- Technology: the leaders noted progress made in bilateral
consultations on high tech exchanges and pledged to continue
to promote such trade while addressing matters relating to
their respective export control systems. They also promised
enhanced cooperation in the field of information and
communication technology, including research collaboration
and the introduction of wide-band wireless technology.
Finally, they agreed to move forward with the development of
the Indian Institute of Information Technology, Design and
Manufacturing at Jabalpur, as well as possible collaboration
in establishing a new Indian Institute of Technology in
Hyderabad.

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ATMOSPHERICS
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14. (C) Yoshida characterized the relationship between the
two Prime Ministers as friendly and warm, and said their
formal meeting lasted 90 minutes. In addition to meeting
with PM Aso, Singh was also called upon by Minister of
Economy, Trade and Industry Toshihiro Nikai and New Komeito
Party leader Akihiro Ota, and had breakfast with former Prime
Ministers Abe and Mori. One glitch occurred when Democratic
Party of Japan leader Ichiro Ozawa canceled his call on Singh
at the last moment, allegedly due to health reasons -- the
DPJ was represented by Secretary General Yukio Hatoyama
instead.
SCHIEFFER