Wall Street Journal
Monday, May 2, 2005

Editorial: Courting India

India has no shortage of international suitors these days, as visits by Chinese and Pakistani leaders highlighted over the past few weeks. Amid all this high-level attention, perhaps the most consequential visitor will turn out to be Japanese Prime Minister Junichiro Koizumi, who came courting at the end of last week.

In strategic terms, a stronger Indian-Japanese alliance appeals to both countries as a way to help balance Beijing's regional ambitions. And in the wake of the recent anti-Japanese protests in China, Japan -- and Japanese business -- have even greater reason to woo new friends in Asia. Tokyo's chilly relations with Seoul play a part as well.

Though India has reveled in the spotlight, there is a sense that Japan's attention carries further meaning. "Of all the visits that have taken place in New Delhi in recent weeks, this is the most important, because it could help bring about a fundamental change in the India-Japan relationship and in the security architecture of Asia," says Brahma Chellaney, a professor of strategic studies at the Centre for Policy Research in New Delhi. Mr. Chellaney told us that the "single most important shared strategic objective of India and Japan is that no single power should dominate Asia."

In addition to containing Beijing, New Delhi and Tokyo share other goals. In a joint statement Friday, Mr. Koizumi and Indian Prime Minister Manmohan Singh reiterated their countries' support for each other's bids for permanent seats on the United Nations Security Council. The two leaders also agreed to deepen economic ties. It's also possible that the two countries may join forces in the fight against maritime terrorism in the Indian Sea, which is a strategic sea-lane for Japanese marine transport.

Above all, there is much room for growth on the economic front, leading to questions about why there is so much untapped potential in Indo-Japanese trade relations. "New Delhi must reflect on why trade with Japan has stagnated for six years at around $4 billion, while that with China has raced ahead in the same period from a near-zero level to $14 billion last year," writes Jasjit Singh in The Times of India. Mr. Singh also points out that there is much potential for an increase in Indian exports to Japan in textiles, electronics, chemicals and automotive parts, all of which are high on Japan's list of priorities. The two countries could cooperate in the field of information technology too. Over in Tokyo, the Daily Yomiuri points out, "India is good at creating software, while Japan is competitive in creating hardware."

Why has it been so hard for these two countries to tap the economic potential in their relationship? The economic sanctions that Tokyo slapped on New Delhi in response to India's nuclear tests in 1998 didn't help, but the broader issue is that in the past, Tokyo just didn't take India seriously. Before the reforms of the 1990s, Japan was understandably turned off by India's socialist economy. In recent years as well, however, cautious Japanese investors have continued to be wary of India's notorious bureaucracy and red tape. Given all this, Mr. Koizumi's visit may have an additional benefit: The potential of new investment from Japan could compel New Delhi to press ahead with the reforms needed to increase efficiency in the Indian economy.

It is not just India and Japan that stand to gain from stronger ties. An alliance between the two democracies could make a valuable contribution to stability in Asia.