But what do the Japanese think of Modi?

His tea ceremonies, his walk through rock gardens, his kimono-clad appearances: much has appeared in the Indian media about PM Narendra Modi’s trip to Japan in September. But what do the Japanese think of Modi? Senior Japanese journalist Hiroyasu Suda reports exclusively for SWARAJYA.

When new Indian Prime Minister Narendra Modi chose Japan for his first official overseas trip, it aroused the interest of people in both countries. Sensing a pleasant wind of change, diplomatic and business circles in both countries sat up and took note. A new regional economic relationship was taking shape: one that both India and Japan could make much of.

“In the long-term perspective, there are no two other countries in the region that can provide as steadfast and solid a base for economic development without much risk, as India and Japan,” wrote Akihiko Tanaka, head of the Japan International Cooperation Agency (JICA), in the daily Yomiuri Shinbun, soon after Modi’s visit to Japan.

Importantly, Tanaka argued that Japan’s forging good relations with South Asian countries, notably India, is not merely a reactionary trend to China’s expansionism in various parts of the world. Instead, the JICA chief sees it as an effort to lay a firm and long-lasting foundation for development in South Asia: one in which Japan can play a much moee effective and dynamic role.

Any India-watcher in Japan will tell you that it has been obvious for long that India holds enormous potential for Japan. And yet, a look at the past 23 years since India made drastic policy changes by easing out its former Soviet-style economy and opening up markets to foreign investors reveals, that Japan’s pace of investment in India, compared not only to western countries, but even to Asia’s emerging economies like Singapore and South Korea—has been rather slow.

The reasons for Japan’s reticence were not very different from those of many foreign investors. The Japanese, like others, were overwhelmed by the chronic ‘India problem’: a combination of politics, bureaucracy and corruption.

Consequently and for many Japanese companies, China and Southeast Asia remained the main playing fields in the 1980s and 1990s. Even though they were evaluating India’s unique potential as a ‘sleeping elephant’ through those decades, Japanese investors prioritized expanding their businesses in the geographically closer Asian markets first.

On the other hand and despite the sluggishness, Japan’s presence in India remained on a steady upward curve. Take New Delhi alone. In the 90s, the number of Japanese residents in the Indian capital was around 1,000. In 2014, there are about 5,000 Japanese residents in the NCR (National Capital Region), most of them in the suburban business areas of Gurgaon.

Since 2000, Tokyo’s political horizon has witnessed chronic stalemate. Several prime ministers have been toppled after the briefest terms in office. This unsteady scenario posed serious challenges to Japan’s overall competitiveness in business.

Asia’s most industrialized nation began to lose out miserably by the economic emergence of China and South Korea. As we struggled with the turbulence of domestic politics in Tokyo, those two countries grew and consolidated their presence across Southeast Asia, especially in the automobile and home electronics industries.

Of course, many Japanese remain confident of their prowess in sophisticated technology, which remains at the global forefront and still sells successfully in many countries.

Indeed, the government of Japan’s current Prime Minister, Shinzo Abe, mirrors this faith. Abe and his team have made it clear that they are determined to rescue Japan’s economy from the doldrums, plagued as it has been by deflation over the past two decades.

They have adopted some drastic measures to do so, like stimulating the Central Bank’s release of large amounts of money into the market.

It is therefore entirely in keeping with that goal, that Abe has set out to reassess Japan’s global partnerships and identify the ‘good’ ones that will be of reciprocal benefit.

Ever since his Liberal Democratic Party came to power in a landslide victory in the December 2012 general elections and much like Indian PM Modi, Abe, has travelled more extensively than any of his recent predecessors, visiting almost 50 countries in the barely two years since he came to office. He has made trips to the US—the traditional ally of the post-World War period, to South Asia, to Latin America and many African countries.

In Abe’s vision of who or what constitutes a ‘good’ partner and already during his earlier tenure as premier in 2006-2007, he had taken note of the potential India holds for Japan. But to improve relations with New Delhi, there were several hurdles to be crossed.

The first was India’s consistent policy towards nuclear disarmament. India has not signed Nuclear Non-Proliferation Treaty (NPT) for the discriminatory nature of the treaty between the “Haves’ and the “Have-Nots”. But in Japan, the world’s only victim of nuclear weapons, strong anti-nuclear sentiment persists in some sections of public opinion: one that all governments have to factor in to all policies, at least to an extent. Consequently, every initiative to improve relations with India, too, must bear this section of opinion in mind.

Since Abe’s first government faced declining popularity at home, his idea of forging ties with India did not make substantial progress.

Then came a five-year period of virtual political gridlock. This was followed by what in Japan is referred to as the “Lehmann Shock”: the global financial crisis of 2008, caused by the bankruptcy of Lehman Brothers and the subsequent crash of global stockmarkets. The crisis crippled subsequent Japanese governments, already struggling with conflicts within both the Liberal Democratic Party as well as the socialist-inclined Democratic Party. Japan’s global strategy lay neglected on the sidelines.

By the time the general elections of December 2012 came round, a deep distrust of all political parties prevailed among Japanese voters. All of them expected any new government to revive the stagnant economy.

Much like the public mood ahead of the general elections in India earlier this year, it is these voter expectations in Japan that lent a big momentum to Abe’s return to the political centrestage two years ago.

Indeed and given the significantly greater public support, Abe’s second coming has proved far stronger than his earlier tenure. He has begun to tackle the most crucial issues head-on: reviving Japan’s economy and lending consistency and practicality to domestic policies.

Simultaneously and over the past 15 years, the world also began to notice changes in the regional political climate in East Asia. China’s expansionist policy became apparent and Tokyo’s relationship with two prominent neighbours, China and South Korea, turned sour over territory and—differing views on mutual history.

Increasingly, Abe and Japanese business leaders began to share the view that Japan needs partner countries in areas beyond East and South East Asia to forge mutually supportive relationships.

Abe was thus able to close the circle and return to his old idea of improving ties with India. The opportunity to employ Japanese technology to develop India and other countries closely connected with India, the Middle East and Indian Ocean-rim African countries, is a stepping stone to that new dimension of Japan’s foreign policy.

The bilateral relationship with India has already seen a significant development: Tokyo has made it clear that it will cooperate in the transfer of nuclear technology for peaceful use in spite of the domestically prevailing anti-nuclear sentiment. This clearly indicates a more pragmatic and realistic stance towards business.

Another area of interest for Japan is the introduction of its rapid rail system in the vast land of India. Of course there are other competitors—Germany, France and China—keenly interested and waiting on the sidelines.

Further, Japanese businesses are also considering some parts of India as hubs in the supply chain of Japanese goods to the world market. Such industrial estates already exist around the Thai capital of Bangkok. These bases produce car parts and audio-electronic goods for prominent Japanese companies such as Nissan, Panasonic, Canon and others to export to clients around the world.

But when Thailand was hit by severe floods in late 2011, some of these factories were forced to suspend operations, leading to a sharp drop in their production of goods meant for world markets. Having another hub for the supply chain in India would certainly minimize this kind of risk.

The landslide victory of the BJP in the general elections in May this year made news in faraway Japan. But even Modi’s earlier reforms during his 12 years as Gujarat chief minister, such as streamlining the state bureaucracy and revitalizing the style of doing business were already viewed here as big successes.

It is therefore no coincidence that Abe’s long-held interest in India has been energized through the emergence of a new government under Modi, one that is more ambitious to push for reforms than its predecessor was.

Modi, on his part, set the ball rolling. By choosing Japan as the venue of his first official visit as Prime Minister, he sent a clear signal to Abe that he, too, views Japan as one of the most important partners for India’s development and economic reforms.

Of course, sceptics abound in both countries: they want to await ‘substantial results’ before commenting on Modi’s promises to ‘rebuild’ India

Given India’s complexity of religions, castes, bureaucratic red tape and ironically because of its strong democracy, many people in Japan know that India is a notoriously difficult country to govern. and that any government can be ousted for mismanaging issues, no matter how insignificant. And yet, positivity has the upper hand.

“The current scenario in India is vastly different from the past,” said one Japanese business leader. “This is a time of rare optimism, it has come after a decade. We must not lose the momentum.”