June 8: The new Narendra Modi-led government plans to change the way Indian diplomacy is conducted by focusing on what moves the world — money.
With that aim, Modi will look to work his charm on cash-rich Japan for investment and trade. New Delhi is keen to offer strategic engagement and preferential status to Japanese businesses trying to find a second home after China turned costly and at times threatening.
Modi, who’s also being courted by China whose foreign minister Wang Yi is currently here, will be visiting Japan early next month. Japan will be his second state visit after Bhutan.
India, Japan and the US will also hold three-way talks later this month, focusing on foreign direct investment (FDI) and defence ties.
India is likely to offer to Japanese investors enclaves along the Delhi-Mumbai industrial corridor, rollback of retrospective taxation that saw tax demands of $3 billion from companies such as Mitsubishi, preferential treatment in investment-related clearances and regular economic dialogues on the lines of India-US talks.
Besides, India is likely to allow FDI in railways, paving the way for an India-Japan joint venture to build a bullet train using the Japanese Shinkansen technology that has been preferred over French and Chinese offers.
The carefully crafted diplomatic move follows a series of visits Modi made to Japan as the chief minister of Gujarat.
After Modi won the elections last month, a bout of public bonhomie followed with Abe tweeting, “Great talking to you, Mr Modi. I look forward to welcoming you in Tokyo and further deepening our friendly ties.” The tweet from the usually dour Japanese Prime Minister was unusual. But Abe has long treated Modi as a kindred spirit. Both are ultra-nationalists, committed to making economics the cornerstone of diplomacy.
Modi, as the chief minister of Gujarat, has long been involved in the Japan-funded Delhi-Mumbai corridor as it passes through his home state, Gujarat.
Modi hopes the indus- trial zone will draw Japanese investment not only in Gujarat but also in northern and western India.