Chart: Despite Narendra Modi-Shinzo Abe friendship, sharp fall in India-Japan trade under NDA

Gujarat is rolling out the red carpet for Japanese Prime Minister Shinzo Abe, who has arrived in India for a two-day visit. In Gujarat, he will lay the foundation stone for India’s first bullet train project which is being set up with loan and technological assistance from Japan. Abe and Prime Minister Narendra Modi will hold the 12th Indo-Japan annual Summit meeting at Gandhinagar after which agreements will be exchanged. Later, an India-Japan business plenary meeting will be held. [caption id=“attachment_4038905” align=“alignleft” width=“380”]  Reuters[/caption] Fifteen agreements are expected to be signed for investments in Gujarat during the visit of the Japanese prime minister. However, a section of political observers feel the whole visit is being used by the Bharatiya Janata Party for boosting its prospects in the state, which goes to the elections this year. It will be disappointing for the rest of the country, if it turns out to be so. It has to be remembered that when Modi came to power, there were expectations that there will be bigger boost for trade relations between the two countries. The reason for this was the seemingly special friendship between both the leaders. However, as far as bilateral trade between the two countries goes, this does not seem to have translated into concrete gains. A look at the table below shows that the trade between the nations have been on a decline ever since Modi assumed power. A look at the data over six year shows that exports from India to Japan hit $6.81 billion dollar in 2013-14. After that it has steadily declined to $3.85 billion in 2016-17. Similar is the case with imports from Japan. From a high of $12.51 billion in 2012-13, it has now fallen to $9.63 billion. The total trade between the countries hit a high of $18.61 billion in 2012-13 and then declined steadily to just $13.48 billion in 2016-17. The India-Japan Comprehensive Economic Partnership Agreement (CEPA), signed in August 2011, has not been successful in maintaining the momentum of trade between both the countries. The Indian government admits this as a matter of concern in its note on the Embassy’s website. “The negative or slow growth in trade with Japan is a matter of concern for India in view of the fact that there is high potential for faster progress on goods and services trade. The share of India-Japan bilateral trade in Japan’s total trade has been hovering around 1 percent but it is in the range of 2.05 to 2.34 percent of India’s total trade in the last five years,” it says. Seen in this context, if Abe’s visit reduces to an electoral strategy, it will be a loss for the country even if the BJP manages to take advantage of it.

Data by Kishor Kadam