Infobahn To Tokyo

INDIA and Japan have finally agreed to disagree. Tokyo was one of the harshest criticsof Pokhran II, and imposed stringent sanctions. But last week on his visit to India,Japanese Prime Minister Yoshiro Mori made it clear that while it may not be business asusual until New Delhi signs the CTBT, Tokyo wasn’t averse to chipping away atsanctions to develop a "new partnership for the 21st century". As a start, Moriannounced that aid for two major projects - Delhi’s metro rail and the Simhadrithermal power plant - totalling approximately $178 million, would resume. The main thrustof this new partnership, of course, is in the field of information technology. Japan is aworld leader in the hardware industry, but sorely lacks software skills, which Indiapossesses in abundance.

South Block, however, has other reasons to be pleased. mea officials point out thatduring his visit to Pakistan, Mori had urged Gen Musharraf to curb terrorism in the Valleyto initiate talks with New Delhi, "thereby implying that Pakistan is responsible forit, as well as supporting our long-standing condition for talks". This is a departurefrom 1998, when Tokyo tried to organise a global conference on Kashmir. Apart from this,external affairs minister Jaswant Singh said in a press conference: "On defence andsecurity issues, a dialogue will be started (and) will take place this year at a date andvenue to be decided by the two governments."

As for the CTBT, while appreciating Delhi’s self-imposed test moratorium andempathising with India’s attempts to build a domestic consensus, Mori made it clearthat signing it would make bilateral cooperation easier.

However, by landing in Bangalore first, Mori also sent a signal that differences overCTBT wouldn’t deter Japan from seeking India’s help for its software industry.On the campus of infotech giant Infosys Technologies Ltd, Mori skilfully employed themetaphor of an unpolished diamond to elucidate his point. "In Japan, there’s aproverb that if a jewel is not polished, it will not shine."

And the ‘polish’ he came looking for has given a new flavour to Indo-Japaneserelations. As .R. Narayanamurthy, Infosys CEO, explains: "From his speech at Infosysas well as the one at the luncheon, Mori gave an impression that the Indian softwareindustry has an important role in enhancing the information infrastructure of Japanesecompanies, and to make them more competitive." Infosys has eight Japanese customersand earned $4.63 million last year from projects executed for Japanese firms.

Wipro, the other infotech behemoth, shared the sentiment. "To be more competitive,the Japanese must imbibe the tenets of e-business and e-commerce and do business in theglobal economy through the e-commerce route. Wouldn’t it be good for companies likeSony, Sanyo or Casio to take the e-commerce route to sell their products or integrate withvendors?" asks Soumitro Ghosh, general manager (worldwide marketing), Wipro,Bangalore. Japan accounts for 10 per cent of Wipro’s exports; it has even establisheda subsidiary, Wipro Japan KK, and is partnering 22 Japanese enterprises for IT services.Obviously, Wipro chairman Azim Premji was elated with Mori’s interest in Indianinfotech companies: "We’ll double our business with Japan every year."

For the Indian IT professionals, Mori’s invitation enhances their reputationglobally. It indicates a demand for their talents that goes beyond their English languageskills. Nasscom thinks Mori’s visit could catalyse the flow of investments andventure capital of about $1 billion in the next two years.

Mori has announced a three-point strategy on IT: recognition of its importance forpromoting economic exchanges in the private sector; exchange of human resources forexploring new Indo-Japanese cooperation in the sphere; and promoting an environment forstrengthening cooperation.

As a follow-up, three high-level Japanese business/industrial delegations are scheduledto visit Indian IT companies between October 2000 and January 2001. A Japan-India ITsummit is also scheduled. Additionally, the Japanese government will expand trainingprogrammes for Indian engineers on Japanese business practices and Japanese language toaccommodate 1,000 trainees over the next three years. The government also plans to launcha scheme of multiple-entry visas for short business trips to Japan.

Not long ago, Japan had turned to China for support in the IT sector. Why this turntowards India now? Says Ghosh: "The Japanese are fastidious about quality -that’s where Indian companies have an edge over others from, say, China orPhilippines; and companies like Wipro and Infosys can help with applications software orsystems software. Also, our professionals will find working for the Japanese an enrichingexperience because most of it would be cutting-edge technology, be it in m-commerce,mobile communications or Internet applications."

But Srikrishna G. Kulkarni, president and CEO of Fanuc GE India, and also theinterpreter at the meeting between Mori and chief minister S.M. Krishna, cautions:"In future, all the products would have to be IT-enabled because they’re goingto be interactive. They have realised they lag behind in infotech, and to bridge this gap,are turning to us for help. But their interest is not India, but regional pockets asit’s easy to deal with Bangalore or Hyderabad. They’re going to play one againstanother, but we don’t think on these lines. Sure, it benefits the business ofindividual companies like Wipro or Infosys. But if need is what’s driving them, theyshould talk of bilateral exchanges at university level or with research labs and culturalorganisations, not just plug in, take what they want and leave. If they have a need thatonly we can fulfil, why can’t they help us? They have not even supported us at theAsean (for funds)."

Kulkarni says the $15-billion fund mentioned by Mori to promote IT use would only bespent on upgrading the infrastructure and research laboratories in Japan. "I am surethat none of it will come into India, and what will come will be through salaries ofIndians working in Japan. I am not saying we snub them, but we must do our homework andseek mutual benefits."

Others like B.V. Naidu, director, Software Technology Park of India, Bangalore, feelit’s a godsend for the IT industry. "Presently our software exports to Japanesemarkets are very small when compared to those to the US. The Japanese market is thesecond-largest global potential market. Co-operation would mutually benefit bothcountries. Sixty per cent of the Japanese exports are in multimedia and games software,and they don’t have the required skilled manpower to retain the lead," he said.

Scepticism or the CTBT are doing little to dampen the elation in Karnataka. CM Krishnathinks they’ve hit jackpot with Mori’s visit. "Obviously, he seems to beaddressing IT in Bangalore and CTBT in Delhi."