NEW DELHI, Jan 24 (Reuters) - Japanese Prime Minister Shinzo
Abe visits India this weekend, hoping to wrap up the first
overseas sale of military equipment by Tokyo in nearly four
decades and open up the world's biggest arms market for his
nation's defence manufacturers.
Abe's visit to India will underline growing business and
political ties between the two nations as they close ranks
against mutual rival China, with the initial focus on the sale
of amphibious search and rescue aircraft to India.
Japan and India are also trying to finalise an agreement on
civilian nuclear energy that would open up the Indian market to
Japanese players, officials said, reflecting another shift in
Tokyo's policy on a sensitive issue. However, a Japanese
official said a signing was unlikely during the visit.
Japanese officials say the proposed sale of ShinMaywa US-2i
planes would not infringe Japan's self-imposed ban on arms
exports because the aircraft to be given to India will be
unarmed and can be used for civilian purposes.
Still, it will give India considerable aviation reach across
the seas and could raise China's ire.
"We have been discussing with Japan the possibility of
purchase of the aircraft," said Gautam Bambawalle, the top
Indian foreign ministry official dealing with North Asia.
"It will take a bit of time because defence equipment is
difficult to transfer, and also the terms and conditions take
time to work out."
The plane, built by ShinMaywa Industries, could be
outfitted for firefighting or as a kind of amphibious hospital
and costs an estimated $110 million per unit. ShinMaywa
estimates that there could be a global market of about 100
amphibious planes for which it could compete.
Japan's Prime Minister Shinzo Abe is seeking a more
assertive military and national security posture for Japan,
whose post-war constitution, written by U.S.-led occupation
forces, renounces war and a standing army.
Abe's government vows to review Japan's ban on weapons
exports, a move that could reinvigorate struggling defence
contractors like Mitsubishi Heavy Industries Ltd and
Kawasaki Heavy Industries Ltd. Mitsubishi Heavy will be
represented on the business delegation accompanying Abe on the
The current ban did not formally take effect until the
fast-growth era of the 1960s and the evolution of Japan's Self
Defense Forces put the issue on the agenda.
India has been the world's top arms importer for three years
running, the Stockholm International Peace Research Institute
said in its report last year, accounting for 12 percent of
global arms imports.
Security ties between India and Japan were virtually
non-existent until a few years ago. But Abe has pushed for a
stronger relationship with Asia's third largest economy to
balance a rising China.
The two countries held joint maritime exercises for the
first time in 2012, in the north Pacific, followed by another
set of manoeuvres in the Bay of Bengal last month.
More exercises including exchanges between the air forces
are planned this year and Abe has been pushing for Japanese
participation in naval exercises that India holds with the
United States each year, an Indian defence official said.
Sino-Japanese ties, long plagued by what Beijing sees as
Japan's failure to atone for its occupation of parts of China in
the 1930s and 1940s, have worsened recently due to a territorial
row, Tokyo's mistrust of Beijing's military buildup and Abe's
December visit to a shrine that critics say glorifies Japan's
On Wednesday, the Japanese leader said Japan and China
should avoid repeating the past mistakes of Britain and Germany,
which fought in World War One despite strong commercial ties.
Like Japan, India is locked in a territorial dispute with
China over their Himalayan border since a brief war in 1962. In
recent years, trade between India and China has boomed, but the
border row has festered and New Delhi has frequently complained
of intrusions by Chinese troops, a charge dismissed by Beijing.
"China is a major factor driving closer ties between India
and Japan," said Michael Auslin who leads Japanese studies at
the American Enterprise Institute in Washington.
"Japan is looking for partners outside northeast Asia. How
far this progresses depends on Chinese assertiveness and
Japan is also involved in various projects aimed at
revamping India's antiquated infrastructure and building
high-speed railway connections and industrial corridors between
the cities of Delhi and Mumbai, and Chennai and Bangalore.
Abe will be accompanied by several top executives from
companies like Mitsubishi Heavy, Sumitomo Chemical
Toshiba and Hitachi, which are looking to
expand commercial operations in India, the Confederation of
Indian Industry said.
Mitsubishi Heavy has a wholly owned unit in India that sells
machines for industries such power plants while Hitachi and
Toshiba plan to supply products to urban railway systems coming
up across the country.
Abe is expected to inform Indian counterpart Manmohan Singh
that Japan will provide yen loans totalling about 210 billion
yen ($2 billion) for construction of subway lines and
energy-conservation projects, the Nikkei newspaper reported.
A Japanese official said the two sides will also likely talk
about ways to make India's business environment friendlier to
(Additional reporting by Krishna Das and Kiyoshi Takenaka in
Tokyo; Editing by Raju Gopalakrishnan)