NEW DELHI--Prime Minister Yoshihiko Noda confirmed wide-ranging cooperative relations with his Indian counterpart, Manmohan Singh, in the fields of security and economy on Dec. 28 in the Indian capital.
Noda apparently intends to strengthen cooperation between Japan and India to counter China's emergence as a military power, while increasing Japan's presence in the huge Indian market.
During a lecture in New Delhi, Noda emphasized that Japan and India have vital interests in marine security in Asia.
India faces sea lanes on the Indian Ocean that lead to the Middle East. Strengthening relations with India is important for Japan's security as China is intensifying its activities in the South China Sea.
In an interview with an Indian newspaper before visiting New Delhi, Noda showed a sense of caution regarding China.
"The strengthening of China's national defense capabilities that lacks transparency is a common concern in this region," Noda said.
India has also grown concerned about China's increased involvement in Sri Lanka, Nepal and Pakistan in recent years. Because of this situation, India has been expanding military exchanges with the United States, Australia and Southeast Asian countries. They all have a common objective to keep China in check.
In 2008, Japan and India agreed to create a comprehensive framework for cooperation in security. In 2012, the two countries will hold their first joint exercises on the sea.
"India has no historical problems with Japan. There are no obstacles for strengthening relations. Such a country is rare for Japan," an aide to Noda said.
However, intensifying bilateral relations to counter China is risky.
In early December, China suddenly postponed the dates of Noda's visit to China, which was scheduled for around Dec. 12 and 13. Later, Beijing proposed changing the dates to Dec. 28 and Dec. 29--the days planned for Noda's visit to India.
"Beijing intentionally sounded out the dates of Noda's visit to India as those of his visit to China. China has begun to pay attention (to the growing relations between Japan and India)," a high-ranking Japanese government official said.
The government led by the Democratic Party of Japan regards "infrastructure exports to emerging economies" as one of the pillars of its new growth strategies. It wants to expand Japanese companies' businesses in India by extending loans to infrastructure projects in the country.
Due to chronic fiscal deficits, the Indian government lacks budgets to construct infrastructure for industrial use.
However, companies from China, South Korea and some European nations are also working hard with their governments to win orders for Indian infrastructure projects. In such a situation, Japanese companies are struggling to obtain orders because their personnel costs are high and they lack the know-how to make products of average quality at low costs. This know-how is indispensable for businesses in emerging economies.
The metro railway construction project planned in Chennai in southern India is subject to the Japanese government's official development assistance. However, French company Alstom SA won the orders in the bidding for train cars.
Japan and India are also cooperating in the construction project of an industrial corridor stretching from New Delhi to Mumbai. However, Japanese consulting companies have lost repeatedly in the biddings held by state governments for urban planning programs.
"If Japan offers only monetary assistance, all the orders for the project will be won by Chinese and South Korean firms," said an official of a major Japanese construction company.
In the Dec. 28 summit between Noda and Singh, Japan and India also decided to expand their currency swap arrangement, in which both governments put up foreign currencies to each other when they face shortages of those currencies.
Due to the Europe's sovereign debt crisis, the growth of India is slowing. In such a situation, the expansion of the currency swap arrangement is expected to play the role of "sea walls" to prevent economic confusion in advance, said an official of the Japanese Finance Ministry.
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