Ambassador Ronen Sen, Indian Ambassador to the United States, Discusses Indo-Japan-U.S. Economic, Trade & Diplomatic Ties

February 15, 2008

Speaker
Ambassador Ronen Sen, Ambassador of India to the United States

Presider
Bal Das, InsCap Management, LLC; Chair, India Policy Forum

Ambassador Ronen Sen, India's ambassador to the U.S., spoke about the growing trilateral cooperation among India, Japan and the United States.

Japan's connections with India date back to the introduction of Buddhism in the 6th century AD Ambassador Sen noted. "It has been reported that subsequently, in the Japanese perspective, the civilized world consisted of three countries--India, in which Sakyamuni Buddha was born; China, to which Buddhism spread; and Japan, where Buddhism flourished supposedly in the most strong and pure form," he said. "The Japanese perspective of the civilized world changed, with the West taking the place of China and India. But if history is any guide, it is inevitable that a more balanced perspective will ultimately prevail."

Japan's rise as a great power in the early 20th century was viewed favorably in India "as the beginning of Asian resurgence," the ambassador said. After World War II ended, India refused to attend the San Francisco Peace Conference and instead signed its own separate peace treaty with Japan, waiving reparations claims. Ties between India and Japan during this period were friendly though "undoubtedly constrained by the reality of Cold War politics," he said.

"India's Look East policy, launched over a decade ago, envisioned Japan as a key partner," and recent visits to India by former Prime Minister Koizumi and former Prime Minister Abe, and to Japan by Prime Minister Singh, have given India-Japan relations "a significant positive momentum," the ambassador said. Under the India-Japan Strategic and Global Partnership, the two countries are pursuing a wide range of initiatives, from political, defense and security cooperation, including maintaining the security of sea lanes, to economic and technology development, people-to-people exchanges, and coordinated action in regional and multilateral forums.

Ambassador Sen noted that India and Japan aim to raise trade between them to $20 billion by 2010, up from about $7.5 billion in 2007. The 2007 figure does not take into account trade from Japan that comes through third countries, and thus understates the true level of trade between the two; nevertheless, "I think we can do much better," he said.

"Japan is currently India's third largest source of foreign direct investment. But Japanese companies have cumulatively made investments of just around $2.6 billion in India since 1991. Here again we can do better," Ambassador Sen observed. "After all, the 2007 annual survey conducted by the Japan Bank of International Cooperation ranked India as the most promising overseas investment destination for Japanese companies over the long term," he added.

As the largest single recipient of Japan's ODA funding, India accounts for almost a quarter of Japan's global ODA funding, the ambassador said. Japan's aid has helped build industrial and transportation-sector projects, and the two countries work together on projects in science, technology and energy.

India and Japan conduct "a comprehensive security dialogue as well as military-to-military talks," and the Japanese and Indian coast guards have signed a memorandum of cooperation; "we have held bilateral, trilateral and multilateral joint military exercises and we hope to continue these," he said.

As democracies based on the rule of law, India, Japan and the U.S. share common values; moreover, all three nations recognize that "free markets are the most sustainable in free societies," Ambassador Sen said. When American innovativeness is joined with Japanese technology expertise and India's skilled scientific and technical workforce, benefits accrue to all three, for example in current collaborations on space technology. If India and the U.S. are successful in concluding a civil nuclear energy agreement, that will spur progress in other high-tech fields such as biotechnology, nanotechnology and defense technology, he said.

All three countries depend on imported hydrocarbons, and all three have joined as partners in ITER, a fusion-energy project, as well as the Asia-Pacific Clean Development Partnership and various other projects, he noted. India, Japan and the U.S. put defense assets to work to combat the aftermath of the December 2004 tsunami in the Indian Ocean, and in April 2007, they conducted the first trilateral naval exercises south of Japan. "The intersection of the shared interests of the three countries finds reflection also in multilateral institutions," he said, ranging from the UN, where India and Japan are seeking permanent seats on the Security Council, to ASEAN, the East Asia Summit and the Asia-Europe Meeting.

"The trilateral interaction of India, the U.S. and Japan did not emerge from a decision to forge a new grouping or alliance," Ambassador Sen said. Rather, the trilateral relationship is founded on a shared tradition of contributing to international systems, and a "growing recognition of the convergence of the ideals and interests of the three democracies and the desirability of channeling these in a constructive and cooperative direction," whether in fighting international terrorism or global pandemics, addressing environmental problems, or combating illegal traffic in narcotics, arms and people, he concluded.

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Many of the ties between India and Japan that you describe, aside from the business ties, are relatively recent--late 1990s and this century. Why did it take so long to identify common strategic interests?

"Part of the reason was both the mindset and the constraints of the Cold War," the ambassador replied. However, "that interaction was always there," and though it's not well known, there have even been interactions on a trilateral basis, with India using aid from Japan to buy some critical imports from the U.S.

Recent history has brought about new perspectives on international cooperation, he indicated. "Some of the concerns which were thought to be just regional or local, people recognize that these post-Cold War challenges are not local, and that if you solve the local issues they won't go away."

To what degree do Japan and India see their relationship, one with the other, as part of their formula for dealing with China?

"Trilateral cooperation was not aimed at China," Ambassador Sen stated. "It doesn't serve either the purpose of India or Japan or the U.S. to even convey an impression of sort of ganging up on China, because we have a vital stake" in China's integration into the global marketplace.

"I am glad in a sense that I have been associated with the opening of relations in a significant manner with China," in the course of serving with Prime Minister Rajiv Gandhi during the time of the prime minister's 1988 visit to China, he said; "and since then there has been continuous improvement of relations between India and China."

The interaction of ordinary citizens in India and Japan is much less than would be suggested by the robust dialogue that's taking place on a macro level, with only about 200,000 Japanese citizens living in India, and only 16,000 Indian citizens living in Japan. To what do you attribute this?

Education is one issue, and not just vis à vis East Asia, Ambassador Sen responded. Notwithstanding all that is going on in Iran, proficiency in Farsi is actually declining in India. It's been reported "that in all of India there are just about 20 students at any given time" who are studying Chinese, and "Japanese, just about eight or 10. If anybody wrote that in a book of fiction, people wouldn't believe it. They would say it's too far-fetched for fiction."

"Part of that learning of languages is a very important step in opening up people-to-people cooperation and there should be much, much more."

What more could our government be doing to enhance India's and Japan's candidacies as permanent members of the UN Security Council?

"The question is not really that we are knocking at the door and we should be let in," the ambassador reflected.

"But if you look at it from a more realistic point of view, the United Nations or its Security Council will not be effective if we leave India and Japan out."

"So, I would in fact wait, and I don't think we are in hurry. But if people are serious about having a United Nations which functions, you can't let it be frozen at a particular time in history," he said. "It is one particular moment, and we have to look ahead in civilization terms, not just in terms of a victor in a particular war."

Do you sense, in your time in Washington, that worries about the ambitions of China are in fact driving greater attention towards India, both in government and at the popular level in the U.S.?

"I don't think so," Ambassador Sen answered. "I think people here have a better understanding. You can't put India in a tiny box. It's just too big, too diverse, too disorganized. It just won't fit in. And it's far too independent, you might say."

In terms of sea-lane security, do you see international cooperation becoming more multilateral than trilateral, with South Africa and Australia, and other members, getting involved?

The Straits of Malacca and other areas are vital because of India's dependence on imported oil, and from this perspective, India hopes to benefit from Japan's expertise with nuclear energy, the ambassador said. "When you look at it as how other countries might figure--I will say that the Indian Ocean will live up to its name in the long term."

I would be very interested in any comments you might make on the situation in Pakistan right now. They're about to have an election there. It's very precarious in terms of politics and security.

"If you look at India you will find not just Pakistan, but if you look all around us there is no other country in the world, in any continent of the world, which has as diverse a neighborhood. You can imagine every possible type of government is there--just in our immediate neighborhood. And we are very careful not to make any hasty pronouncements on those internal developments there," Ambassador Sen said.

"One is because we believe that you cannot impose a system which is not acceptable. It has to have some domestic roots. Second is that, to be frank, rhetoric--we haven't hardly had any rhetoric from India, because the level of rhetoric is always inversely proportional to your stakes. So, since our stakes are so high, sometimes you find us virtually saying nothing."

"Sometimes we are criticized for it. At the time when President Musharraf was condemned by Europe and the U.S.--now, of course, there are some changes in perception. But even at that time, what did India do? We invited him to pay a state visit to India."

"In terms of Pakistan, we have a vital national security interest in peace and stability and prosperity of that country, and we believe that that process will help us and help the international community to really tackle the problems of both of religious radicalism, of global terrorism together with the whole heap of other things which are going on in that area. It's a hub of narcotics trafficking and arms trafficking and so on and so forth--it's a long list."

Indian and Japanese companies have cooperated very successfully in automobiles and in consumer electronics. Both countries are vying to become recognized centers for financial services in Asia. What will be the focus in future?

Clear growth areas include infrastructure; financial services, particularly insurance and asset management; and the outsourcing industry, which offers a route to upgraded technology systems for both financial and nonfinancial firms, Mr. Das commented.

Major U.S. financial-services CEOs have been very happy with the profitability of their Indian operations, and "this is taking place without our getting our act together, because we still have a 26 percent cap on FDI on insurance," Ambassador Sen responded. The India-U.S. CEOs forum has "been very useful, because we get together people who are actually doing business to see what are the constraints they are facing" and to come up with practical solutions, "and we are in the process of doing exactly that with Japan."

There's also new interest among Indians in investment abroad, in the U.S. and also in the UK, Ambassador Sen concluded. While serving as High Commissioner for India in the UK, "I made a statement there in 2002 that very soon and in the coming five years you will have Indian investments in the UK equal to British investments in India. They thought I was a bit eccentric, very frankly. And they were very polite. But today it is not only equal, it is double that of British investments in India." He added that the same trend of two-way investments was becoming evident between India and the U.S.

--Katherine Hyde