Shamshad Ahmad Khan replies First of all let us understand what the Official Development Assistance (ODA) is. It is a low-interest and a long-term loan offered by Japan to developing nations including India. Japan claims that it is a tool to maintain good relations with other countries. To begin with, Japan extended large amount of soft loans to Southeast Asian and East Asian countries including its erstwhile colonies to achieve twin purposes: gaining their goodwill and maintaining presence in their market through Japanese-funded projects. However, the fact that it is driven by Japan’s entrepreneurial interest cannot be negated as ODA was mostly a “tied aid” under which the recipient countries had to buy technical equipments for Japanese funded projects from the Japanese companies. Later, post-1990s, Japan left the option open for the recipient countries to buy technical equipments through open biddings.

India was one of the first countries to receive Japanese ODA loan in 1958. In 2007, India became the largest recipient of Japanese ODA loan when Japan had to cut the ODA loan to China owing to people’s demand. Japan’s ODA Charter stipulates that the country will halt its ODA loan to countries that violate human rights, do not promote democracy, invest hugely in defence, or are involved in proliferation of weapons of mass destruction.

Major portion of Japanese loan to India goes to infrastructure development projects. Japan wants to lower its presence in China in view of growing tension between the two countries over disputed territories in the East China Sea. Also, studies suggest that China will become an ageing society in the next 20 to 30 years (if it does not ease its one-child policy), and in that scenario the consumption of Japanese manufacturing products will decrease. So they want to shift their productions to India which still has a large youth population and a growing middle class. But since the infrastructure in India remains poor, they believe that it will hamper the flow of their goods from one corner of India to another. This explains why Japan has been extending loans for infrastructure development projects in India, including road and railway corridors. Japan also wants to make India its export hub to reach out to the West Asian economies and to minimize the shipping costs.

R.N. Das replies: It is true that India’s relations with Japan have undergone a significant transformation in recent years, with the signing of ‘India-Japan Strategic and Global Partnership’ in December 2006. In October last year, the two countries signed the joint document, ‘Vision for India-Japan Strategic and Global Partnership in Next Decade.’ The India-Japan-US trilateral took place in the US in December. All these, however, should not mean to suggest a containment strategy, though there has been such a perception in some sections of the strategic community both in India and elsewhere.

Prime Minister Mammohan Singh, time and again, has asserted that the India-Japan strategic and secureity cooperation is not aimed at any third country, least of all China. India has neither the inclination, nor the capability or for that matter any need to contain China. The two countries are carefully engaging each other to overcome the trust deficit. For example, in spite of the spat over ONGC Videsh’s foray into the South China Sea, the postponement of the talks between the special representatives, and the latest episode of alleged ill-treatment meted out to the Indian diplomat in Shanghai, the two countries have handled the issues very deftly. Prime Minister Singh’s recent statement in Bhubaneswar that China is well ahead of India in terms of research and development in the field of science and technology, and External Affairs Minister Krishna’s appreciation for Beijing’s handling of the issue of Indian traders held captive in Yiwu near Shanghai by the local authorities, clearly suggests that India is serious about engaging China. There should not be any zero-sum game between the two countries.