Japan is at the heart of India's Look East policy: Narendra Modi

Prime Minister Narendra Modi arrived in Japan on Saturday for a five-day bilateral visit–his maiden one outside India's immediate neighbourhood. Before taking the flight to the ‘land of the rising sun’, the prime minister expressed confidence that his visit will write a new chapter in the annals of the relations between Asia's two oldest democracies and take the Strategic and Global Partnership to the next level.

While interacting with media, Modi gave a detailed picture of how India plans to go ahead with its economic agenda and its bilateral relations with Japan.

Question: For the last two fiscal years the GDP of India has been below 5 percent - what reasons do you attribute to this low growth rate? What is the target GDP for this year and the next? What are the measures the government will take to fast track economic growth of India and how will India invite more investment especially in the infrastructure and manufacturing segment? What according to you will encourage investors?

PM Modi: Regarding the question on economy, first of all you would appreciate that for the last several years, we have seen great period of global economic uncertainty. I believe that the people of India have voted for development with their decisive mandate. I think these two things, the vote for development and decisive mandate, I am confident, will take India to the highest levels of growth. We have already taken, as you would have seen in our last budget, certain new initiatives. In less than 100 days, we have initiated several reforms. Whether they relate to labour reforms, ease of doing business in India, made in India movement, financial inclusion or FDI liberalisation in field of defence and insurance and skill development. In all these areas we have initiated several reforms. I think we have crossed the difficult situation that the country was facing. Within the first 100 days of this government, we have achieved stability and stopped the continued reversals that the country was facing. We have to move ahead now on the runway; I am confident that, very soon, we will attain greater heights.

Question: During your forthcoming visit to Japan, what further progress do you expect in diplomatic, economic and security relations with Japan, particularly in terms of three major pending negotiations namely the civil nuclear pact, US-2 amphibious aircraft, and the high speed rail "Shinkansen" ?

PM Modi: I see the choice of Japan as my first destination for a bilateral visit outside India's immediate neighbourhood as a recognition of Japan's importance in India's foreign policy and economic development and her place at the heart of India's Look East Policy. Our two countries enjoy consensus on the importance and potential of our Strategic and Global Partnership across the political spectrum, the business community and people from all walks of life in the two countries. This is a partnership that is sustained by the convergence of our values and interests.

In the economic field, I see a lot of complementarity and synergy between the goals of Abenomics and what I am trying to achieve in India. Japan will always remain our preferred economic partner. Japan has supported India's infrastructure development over the years through generous ODA loans.

In the field of defence and security, I feel time has come for us to upgrade our relations. I see in the recent changes in Japan's defence export policies and regulations a possibility to engage in a new era of cooperation in high-end defence technology and equipment.

There has been significant progress in our negotiations on the civil nuclear agreement; on the US-2 amphibian aircraft; and in the field of high speed railway. It is my hope that my visit this time will pave the way for concrete cooperation on these fields.

Question: We have heard that you have planned to visit Hiroshima. Could you please confirm that you would visit Hiroshima as Prime Minister of India in the near future?

PM Modi: I have visited Hiroshima in April 2007 during my visit to Japan as the Chief Minister of Gujarat. In future also, if presented with an opportunity, I would like to visit there again.

Question: Japan recently changed its defence policy to be more proactive and expanding the interpretation of the right of collective self-defence to have deeper commitment to regional security issues. While Japan seeks deepening defence cooperation with India, "Malabar 2014" India-US-Japan Naval drill marked a success last month. What is your opinion as to how will India continue to hold trilateral or multilateral defence exercises that include Japan? Do you plan to have India-Japan 2+2 Foreign and Defence Ministerial Consultations?

PM Modi: Defence relations constitute a strong underpinning of our Strategic and Global Partnership. We have a shared interest in working together with Japan and with other countries, to foster peace and stability in Asia and beyond. We are committed to strengthen defence exchanges and cooperation between Japan and India. The two sides will strengthen defence exchanges at all levels and continue to hold naval exercises with regular frequency. I am glad that Japan took part in the Malabar exercise this year.

Question: I would like to ask about relationship with SAARC countries. Prime Minister chose Bhutan and Nepal which were located between India and China as the first countries for the bilateral visits. What is the aim of that?

PM Modi: My visits to Bhutan and Nepal reflect the high priority and focus on our immediate neighbourhood in our foreign policy priorities and my conviction that India and the SAARC countries must reinforce economic growth in the SAARC region by promoting synergy. India's relations with Nepal and Bhutan are above all relationship forged by our people through the ages. We have open borders with both countries in more than one sense of the term. My discussion in both countries covered the entire gamut of bilateral cooperation including in trade and economy, developmental assistance, hydropower cooperation, defence and security, education and culture. My visits there imparted a fresh impetus to our close relationships with our two Northern neighbours.

Question: India cancelled the foreign secretary meeting between India and Pakistan. What is the reason for that? How will you improve the deteriorated relationship?

PM Modi: India desires peaceful, friendly and cooperative ties with Pakistan. I had a very good meeting with Prime Minister Nawaz Sharif in May 2014, when he attended the swearing-in ceremony of my Government. We together decided that the Foreign Secretaries should meet and explore how to take relations forward. India has no hesitation to discuss any outstanding issue with Pakistan within the bilateral framework that has been established under the Simla Agreement and the Lahore Declaration. We, therefore, were disappointed that Pakistan sought to make a spectacle of these efforts and went ahead with talks with secessionist elements from Jammu and Kashmir in New Delhi just prior to the meeting of the Foreign Secretaries. We will continue to make efforts to build peaceful, friendly and cooperative ties with Pakistan, but I might add that any meaningful bilateral dialogue necessarily requires an environment that is free from terrorism and violence.

Question: In Afghanistan International Security Aid Force (ISAF) will leave by the end of this year, and the new president will be sworn in. How will you construct better relationship with new Afghanistan and contribute to its peace and stability?

PM Modi: As the ISAF has been drawing down its presence, the Afghan National Security Forces and their valiant personnel have been showing themselves more than capable of taking on greater responsibilities for Afghanistan’s security. However, peace and stability in Afghanistan continues to face a serious threat from terrorism and extremism coming from across its borders. India has a strategic partnership with Afghanistan and we remain committed to helping Afghans build a strong, independent and prosperous country.

Question: According to the manifesto of BJP, your government will revise and update the nuclear doctrine to make it relevant to challenges of current times. Could you please elaborate what the new doctrine would be like?

PM Modi: India's nuclear doctrine was adopted during the previous NDA government and has in general governed our nuclear weapons posture since then. While every government naturally takes into account the latest assessment of strategic scenarios and makes adjustments as necessary, there is a tradition of national consensus and continuity on such issues. I can tell you that currently, we are not taking any initiative for a review of our nuclear doctrine.

Question: Are there are any possibilities that India accede NPT or CTBT sometime in the future. If any, what conditions would be required by India to consider signing NPT or CTBT?

PM Modi: India’s position on the NPT and the CTBT is well-known and needs no reiteration. There is no contradiction in our mind between being a nuclear weapon state and contributing actively to global nuclear disarmament and non-proliferation. India remains strongly committed to universal, non-discriminatory, global nuclear disarmament. Our track record of non-proliferation is impeccable. We will continue to contribute to the strengthening of the global non-proliferation efforts. India’s membership of the four international export control regimes will be conducive to this. As to the CTBT, we are committed to maintaining a unilateral and voluntary moratorium on nuclear explosive testing.

Question: What is China for you? What are your views on China's "expansionism"? What becomes the main topic at the summit meeting with PRC President Xi Jinping in September?

PM Modi: China is India’s largest neighbour and a high priority in India’s foreign policy. It is my government’s resolve to utilize the full potential of our Strategic and Cooperative Partnership with China. I am keen to work closely with the Chinese leadership to push the relationship forward and to deal with all issues in our bilateral relations by proceeding from the strategic perspective of our developmental goals and long-term benefits to our peoples. I had a good first meeting with President Xi in July and I am looking forward to welcoming him in India. India, Japan and China, as major countries in Asia, have many common interests and we need to build on them to convert ours into an Asian Century by working together.

Question: How do you look at the concept of establishing Asian Infrastructure Investment Bank (AIIB) raised by China? Do you have an intention to support it and how do you find it different from the already established ADB and WB?

PM Modi: India desires that global savings be channelled towards infrastructure development in developing economies. Parts of the Asian continent face enormous infrastructure deficits. Hence, in principle, any initiative which seeks to address these deficits in infrastructure and connectivity is welcome. China has invited India to join the proposed AIIB as founding member; India is considering the invitation. India would like any new multilateral development bank to incorporate the reforms that we advocate for the existing international financial institutions.

Question: Obama administration has sent ministers one after another to India and invited you to visit Washington next month. What kind of relation with the US would like to build and what needs to be done in order for India and the US to enhance strategic partnership?

PM Modi: India’s strategic partnership with the United States is an important pillar of India’s foreign policy. This partnership is not only relevant for the attainment of India's national, regional and global aspirations, it is also an important contributor to peace, stability and prosperity in Asia and the world. As I have said in the recent past to visiting American dignitaries, we should not look at the relationship merely in terms of what India and the US can do for each other, but more importantly, what India and the US can do together, for the world. As the largest and oldest democracies in the world, there is also a convergence of values, which also means that it is natural for India and the US to want to partner more closely with traditional friends who share such values, such as Japan. Both sides recognize that there is value in building further substance in this partnership for the benefit of our people, the region and the world. We should challenge ourselves to realise the true potential of this relationship. It is in this spirit that I approach my meeting with President Obama in September.

Question: How do you plan to expand the influx of foreign direct investment (FDI)? The government has proposed to increase the FDI limits in defence and insurance sectors from 26 percent to 49 percent. In what other areas do you plan to ease FDI limits? Also, it is expected that the implementation of GST will remove certain barriers for foreign companies to do business in India. Are you confident that your government will be able to roll out GST before the end of 2014? Could you please tell me the roadmap for the much delayed indirect tax reform?

PM Modi: FDI regime in India is free with minimal conditionalities. I feel that with the right signal of policy stability and genuineness of intent by the Government, FDI influx will happen on its own, as India is an excellent investment destination. We are open to dialogue and will strive to remove all roadblocks to inviting FDI. There are not many sectors left where FDI has restrictions. Review of FDI policy is a continuous exercise. We have recently opened up the railway sector to 100 percent FDI and 49 percent in defence. We have also deregulated a number of items in defence list which do not require licensing now.

The introduction of GST is likely to reduce cost for industry, trade and consumers. Further, it would lead to widening of tax base and a significant improvement in tax compliance. We are discussing with States and holding dialogues for assuaging their apprehensions about possible revenue loss, and I am confident that sooner rather than later the States will come on board. Even if it takes a little more time to convince them, in a Federal democracy the way forward is to convince the States and arrive at a consensus.

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