Saturday, August 18, 2007

The Samurai and the Swami Unite: How Japan and India are Working Together to Take on China

As Beijing’s influence in Asia and around the world has grown, their common interests have forced Tokyo and New Delhi to begin warming their historically chilly relationship and to start forging closer economic ties.

“The key issue facing the whole region is how to accommodate the rise of China,” said Suman Bery, the director general of the National Council of Applied Economic Research, a New Delhi research group. Indian economists estimate that Japanese investment in India will reach $5.5 billion by 2011, compared with just $515 million in the 2006 fiscal year.

Consultants are trying, so far in vain, to coin the catchphrase, like “the Samurai and the Swami,” that will sum up the nascent strategic economic relationship between the countries.

Courting India has come slowly for the Japanese, who were highly critical of India’s surprise nuclear weapons test in 1998. While Japan is a large lender to India, until now it has not been a major investor or business partner. Instead, Japan has virtually sat on the sidelines while countries from Switzerland to Brazil cemented business alliances in India, where economic growth is about 9 percent a year.

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