Japan will give loan to India to build a high speed bullet train. It will connect Mumbai and Ahmedabad.
Japan is also interested in the overall modernization of Indian railways. It is willing to participate in new station building, station management, and computerization of the entire railway operations.
Negotiations on civil nuclear deal have been completed. If signed, India will become the first non-NPT country with which Japan has signed a nuclear deal. Issues like, should/can India conduct another nuclear test like Pokhran after the deal, are yet to be addressed.
Why should Japan sign nuclear deal with a non-NPT country?
Japan has got about 54 nuclear reactors. Most of the reactors are shut after the recent events of Tsunami, earthquake and radiation leak from Fukushima. They are shut due to internal protests and for safety reasons. Now, the PM Shinzo Abe has been attempting to open one or two of them. Besides, the Japanese economy is slowing down. It needs exports and can transfer nuclear technology. India is the potential country where it can export.
It is also said that the “China factor” is one of the main reasons for Japan agreeing to go ahead with civil nuclear deal with India. It has territorial problems with China, Russia, and South Korea in the East Asia region. In addition, the Chinese aggressive maritime activities in the South China Sea are alarming. In fact the Japanese PM has said that economic choices were being made because of security choices.
Japan was more inclined towards US and has not got regional allies within Asia. Strengthening ties with India is a step in the right direction for Japan to fill this gap. In fact, Japan has described Indian economy as being high speed, safe and reliable.
However, the Japanese experience in the manufacturing sector in India has not been happy in the fast. For example, there were bad experiences like lockout for Toshiba in Kerala; rampage by workers in Maruti Suzuki plant at Manesar. Such incidents won’t happen in Japan. So, they are doubtful about how Indian labour would react to Japanese manufacturing plants in India. Besides, there are legacy issues like land acquisition, which is a state subject, labour reforms, tax reforms, etc.
Japan is also looking to attract 10000 students from India.