INDIA and Japan have finally agreed to disagree. Tokyo was one of the harshest critics of 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 as usual until New Delhi signs the CTBT, Tokyo wasnt averse to chipping away at sanctions to develop a "new partnership for the 21st century". As a start, Mori announced that aid for two major projects - Delhis metro rail and the Simhadri thermal power plant - totalling approximately $178 million, would resume. The main thrust of this new partnership, of course, is in the field of information technology. Japan is a world leader in the hardware industry, but sorely lacks software skills, which India possesses in abundance.
South Block, however, has other reasons to be pleased. mea officials point out that during his visit to Pakistan, Mori had urged Gen Musharraf to curb terrorism in the Valley to initiate talks with New Delhi, "thereby implying that Pakistan is responsible for it, as well as supporting our long-standing condition for talks". This is a departure from 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 and security issues, a dialogue will be started (and) will take place this year at a date and venue to be decided by the two governments."
As for the CTBT, while appreciating Delhis self-imposed test moratorium and empathising with Indias attempts to build a domestic consensus, Mori made it clear that signing it would make bilateral cooperation easier.
However, by landing in Bangalore first, Mori also sent a signal that differences over CTBT wouldnt deter Japan from seeking Indias help for its software industry. On the campus of infotech giant Infosys Technologies Ltd, Mori skilfully employed the metaphor of an unpolished diamond to elucidate his point. "In Japan, theres a proverb 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-Japanese relations. As .R. Narayanamurthy, Infosys CEO, explains: "From his speech at Infosys as well as the one at the luncheon, Mori gave an impression that the Indian software industry has an important role in enhancing the information infrastructure of Japanese companies, and to make them more competitive." Infosys has eight Japanese customers and 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 the global economy through the e-commerce route. Wouldnt it be good for companies like Sony, Sanyo or Casio to take the e-commerce route to sell their products or integrate with vendors?" asks Soumitro Ghosh, general manager (worldwide marketing), Wipro, Bangalore. Japan accounts for 10 per cent of Wipros exports; it has even established a subsidiary, Wipro Japan KK, and is partnering 22 Japanese enterprises for IT services. Obviously, Wipro chairman Azim Premji was elated with Moris interest in Indian infotech companies: "Well double our business with Japan every year."
For the Indian IT professionals, Moris invitation enhances their reputation globally. It indicates a demand for their talents that goes beyond their English language skills. Nasscom thinks Moris visit could catalyse the flow of investments and venture capital of about $1 billion in the next two years.
Mori has announced a three-point strategy on IT: recognition of its importance for promoting economic exchanges in the private sector; exchange of human resources for exploring new Indo-Japanese cooperation in the sphere; and promoting an environment for strengthening cooperation.
As a follow-up, three high-level Japanese business/industrial delegations are scheduled to visit Indian IT companies between October 2000 and January 2001. A Japan-India IT summit is also scheduled. Additionally, the Japanese government will expand training programmes for Indian engineers on Japanese business practices and Japanese language to accommodate 1,000 trainees over the next three years. The government also plans to launch a 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 turn towards India now? Says Ghosh: "The Japanese are fastidious about quality - thats where Indian companies have an edge over others from, say, China or Philippines; and companies like Wipro and Infosys can help with applications software or systems software. Also, our professionals will find working for the Japanese an enriching experience 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 the interpreter at the meeting between Mori and chief minister S.M. Krishna, cautions: "In future, all the products would have to be IT-enabled because theyre going to 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 as its easy to deal with Bangalore or Hyderabad. Theyre going to play one against another, but we dont think on these lines. Sure, it benefits the business of individual companies like Wipro or Infosys. But if need is whats driving them, they should talk of bilateral exchanges at university level or with research labs and cultural organisations, not just plug in, take what they want and leave. If they have a need that only we can fulfil, why cant they help us? They have not even supported us at the Asean (for funds)."
Kulkarni says the $15-billion fund mentioned by Mori to promote IT use would only be spent on upgrading the infrastructure and research laboratories in Japan. "I am sure that none of it will come into India, and what will come will be through salaries of Indians working in Japan. I am not saying we snub them, but we must do our homework and seek mutual benefits."
Others like B.V. Naidu, director, Software Technology Park of India, Bangalore, feel its a godsend for the IT industry. "Presently our software exports to Japanese markets are very small when compared to those to the US. The Japanese market is the second-largest global potential market. Co-operation would mutually benefit both countries. Sixty per cent of the Japanese exports are in multimedia and games software, and they dont 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 Krishna thinks theyve hit jackpot with Moris visit. "Obviously, he seems to be addressing IT in Bangalore and CTBT in Delhi."