COVER STORY • 1

Roundtable with Amitabh Kant, Prof. Shujiro Urata, Prof. Yukiko Fukagawa & Masakazu Toyoda(Jan. 18, 2024)

I

ndia – the Future of a Powerful
Country

By Japan SPOTLIGHT
Participants

Amitabh Kant

Prof. Shujiro Urata

Introduction by Masakazu Toyoda, Chairmanof JEF
According to estimates by the United Nations Economic Office,India’s population reached 1.43 billion by the end of April last year,
making it the most populous country in the world. On the economic
front, India is expected to overtake Japan in terms of GDP in the late
2020s to become the third-largest country in the world. If theChinese economy stalls and fails to overtake the United States, India
could well become the second-largest economy in the world by
2050. On the management side, India has a wealth of humanresources, and among GAFAM members, the CEOs of Microsoft and
Google, as well as the chairman of Kameda Seika in Japan, are from
India.
India also has a strong presence on the international politicalscene as a leading member of the Global South amid the deepening
division between G7 countries and China and Russia. While holding
the presidency of the G20, India surprised the world in September
2023 when it reached a summit declaration on the afternoon of thefirst day of the meeting, which was expected to be difficult to agree
upon. India also made its presence felt at COP28 in 2023.
Furthermore, on the scientific front, India became the fourthcountry in the world to successfully land unmanned on the moon in
August 2023, beating Japan, and is likely to become a significant
player in the space business. On the cultural front, India is famous
for its movie industry. Personally, I love Indian movies and often
watch them on airplanes.
I have been wondering why India did not join the RCEP while
https://www.jef.or.jp/journal/

Prof. Yukiko Fukagawa

Masakazu Toyoda

concluding free trade agreements with Australia and the UAE. It is
unfortunate that India’s complicated regulations and underdeveloped
infrastructure are factors that make foreign companies, including
Japanese companies, cautious about investing in India at the
moment, even though it is one of the most promising investment
destinations.
Today, three experts will gather to discuss the future of India, agreat power full of contradictions. The first is Mr. Amitabh Kant,
sherpa of the G20. Until recently, he was the CEO of NITI Aayog, agovernment think tank established at the initiative of Prime Minister
Narendra Modi to promote structural economic reforms. The second
is Shujiro Urata, professor emeritus of Waseda University, who iswell versed in international economic issues. The third is Prof.
Yukiko Fukagawa of the School of Political Science and Economics at
Waseda University, who is an expert on Asian economies.
First, I would like to ask Mr. Kant. India’s recent growth has beenremarkable. Since 2014, the growth has been averaging around 6%.
The latest World Bank report released in October last year projects agrowth rate of 6.3% for both 2023 and 2024. This is the highest
growth rate among the G20 countries, and 1-2% higher than that ofChina. The reasons for this are said to be population growth(demographic bonus), progress in deregulation, and digitalization.
What do you think is the main reason?

Macroeconomic Development – Reforms to
Encourage Growth
Kant: Thank you, Toyoda-san. Last year we grew at 7.3% and in theJapan SPOTLIGHT • March / April 202411

current year we are projected to grow at 7.2% in 2023, and in 2024.
This is far higher than any large economy in the world and higher
than any estimates made by international organizations. This is the
cumulative effect of a wide variety of steps taken by the government
since 2014, firstly wide-ranging economic reforms. The goods andservices tax was implemented all over the country – it’s like having
one tax across all of Europe; the corporate tax rate was reduced tointernational levels, and sectors for foreign direct investment wereopened up – almost 98% of FDI now comes in through automaticroutes. A new bankruptcy law, modern regulations for real estate,removal of retrospective taxation, commercial exploration andmining, and codification of labor laws are among the long list of
economic reforms which India has undertaken. Production reforms
have also been introduced to bring size and scale to manufacturing
in India.
Secondly, digitization. Today more than 11 billion transactions
take place digitally every month in India. We are transferring
government benefits directly into the accounts of people and we do
FAST payments which account for 46% of the real-time FAST
payments in the world. Entire government processes anddepartments have gone fully online. India’s digital public
infrastructure has delivered ease of doing business and ease ofliving. Thirdly, innovation and entrepreneurship. The start-up
movement in India has seen India become one of the largest start-up
ecosystems in the world and in 2016 we were close to 400 start-ups,
but today we have more than 110,000 and are creating new businessmodels and disrupting traditional sectors.
Lastly, a trust in infrastructure investment is creating a worldclass multimodal transport network in India, moving goods andpeople. Leveraging GIS, an overarching masterplan has been createdto guide investments. Since 2014 government expenditure as apercentage of GDP has doubled from 1.7% to 3.4%. These
investments are lowering the costs of logistics and enhancing ourcompetitiveness. So, this is the broad perspective in response to
your question.
Toyoda: Very impressive, thank you very much. Dr. Fukagawa, you
are familiar with Asian economies such as India and China. What do
you think are the characteristics of India’s growth compared toChina? What do you think are the advantages and disadvantages
from the viewpoint of promoting investment by foreign companies,
including Japanese companies?
Fukagawa: As one who has been observing Chinese economic
development for decades, I think there are lots of differences, but thefirst one is that after all China remains the biggest so-called “EastAsian economy” that has been committed to manufacturing andexport-oriented developments. India is wholly different in this path.
The second thing is that of course China and India are big
geographic countries so there is always the relationship between the
12 Japan SPOTLIGHT • March / April 2024

city areas and their other regional areas. As far as I know, India has
made big progress in utilizing GST, the tax that used to be very
different between provinces and states, and that has resulted in hugeprogress in terms of transaction costs for businesses in India. China
did not have this kind of problem because it is far morehomogeneous in terms of structures. What is interesting about
China’s early development is that the Chinese provinces arecompeting with each other very fiercely, trying to improve theirbusiness climate and attract more FDI, and trying to boost exports
desperately. At the same time, the provinces were learning from eachother very rapidly. As a result, as a whole the Chinese investment
climate had become more standardized, but in India there seems to
be still lacking this sense of competition. Some states are doing very
well like Mumbai or Gujarat, but some stagnating states still exist
and so from a foreign investors point of view it is very hard to
imagine India as an integrated whole big market and that’s probably
one of the big differences.
The other thing is the expectation of India’s demographic bonus
and that is very different from China which has already started to see
the decline of its population. In order to enjoy a demographic bonus
fully, I think we need three things. We need a young population, butalso the labor participation ratio is important. Even though you havesuch a large number of young people, they are not guaranteed jobs.
The third is labor productivity and in terms of the demographic
dividend India should be more interested in investing heavily in
education and also trying to be more focused on job creation,
because China did enjoy this demographic dividend as its
competitive advantage was in its labor-intensive manufacturingindustries. So I think India is full of potential but we need some veryclear priorities and sequencing of industrial policies.
Toyoda: Thank you for your interesting comparison between the twocountries. Let me next ask Prof. Urata, who looks at the world
economy as a whole. The challenge for India is said to be the large
gap between the rich and the poor. The savings rate is low and there
is no virtuous cycle of high savings and high investment. Whatshould be done to overcome this problem?
Urata: Yes, the low savings rate is a problem for India and there areseveral reasons for this; one is, as you mentioned, income inequality.
The savings rate is lower for low-income households compared tohigh-income households so the increasing income gap in the form of
increasing low-income households will lead to lowering the savings
rate. But I think there are other factors which also led to a decline in
the savings rate. I understand that this is a very serious issue which
India is now facing and I have read some articles about this issue.
These other factors include pent-up demand from the Covid-19
pandemic. Pent-up demand led to active consumption not only by
low-income households but also by high-income households.
Inflation also encouraged households to spend before prices ofproducts went up and low interest rates encourage households toborrow from financial institutions to spend. All of these and maybe
some other factors too contributed to increasing consumption andlowering the savings rate.
Also, active government spending, which resulted in a fiscal
deficit, contributes to the low gross savings of the country.
Investment plays an important role in promoting economic growthand domestic savings are a major source of funds for investment,
and therefore a low gross savings rate is a problem in terms ofachieving sustainable economic growth. To increase gross savings,
it is important to deal with the problems I mentioned. Lowering the
inflation rate is a big challenge and reducing the income gap orincome inequality is another challenge. How can India reduce income
inequality? I echo what Fukagawa-san mentioned – education ortraining should be given to people from low-income households as
this could increase their income and in turn contribute to increasing
the savings rate. Also, labor mobility. Mr. Kant talked aboutreforming the labor market and perhaps this has already been done,
but I think it is very important to make a more flexible and mobilelabor market so that people can switch their jobs from lowproductivity ones to high-productivity ones. Finally, reducing thegovernment deficit is important for India to increase its grosssavings.

expand.
My view is that, as the Bank of International Settlements has said,
India has achieved in nine years what it would have normally taken
47 years to achieve. I really feel that this focus on infrastructure
which the government has made the private sector investment in will
accelerate in the coming months and investment rates will rise, andwhat you will see is the private debt to GDP ratio growing. Thebalance sheet of the private sector is in a very good condition. All thecompanies are making good profits and the bank balance sheets
could not be better. They are in excellent health and my view is thatprivate investment will accelerate in a very big way. The government
has opened up the FDI regime in a very big way and you will see FDI
growing and expanding in the coming years.
The issue about India being a large state is correct, and therefore
growth with equity is important. It can’t be that some states growwhile other states do not, and it’s very important that all statesshould accelerate the pace of growth. The southern part of India andthe western part of India are growing but the eastern part of India
needs to grow rapidly. And some states like Odisha have done very
well in recent times and are a beacon of hope, and I am sure that in
the coming years they will further accelerate the pace of growth.

Toyoda: Mr. Kant, could you please comment on Prof. Fukagawa’sand Prof. Urata’s comments, and if you have any objections or points
you would like to add, please do so.

Toyoda: I would now like to ask Mr. Kant about trade policy. India
has decided not to join the RCEP, although it has been participatingin negotiations with great enthusiasm. Bilateral free trade
agreements have been concluded with Japan, Australia, the UAE, andother countries. Many people wonder why India did not join the
RCEP. For India, too, people think the growing markets of the AsiaPacific are important. Many may have been afraid of a flood ofimports from China. In that case, the TPP without China may be agood thing for India. What do you think?

Kant: These are all very valid comments and I want to respond tosome of them. One is that during the last eight or nine years thegovernment has laid a lot of stress on infrastructure and it has
focused on providing essential services to the citizens of India. It has
built close to 40 million houses in the last nine years, and that’smore than the population of Australia. It has also provided about 110
million toilets to its citizens. It has provided piped water connections
to 53 million Indians, and also built about 88,000 kilometers ofroads. It also came out with a new educational policy focusing on
improving learning for children and it has focused on providing
insurance to 500 million Indians, and all of it is cashless so you canmove to any part of India and carry your insurance with you.
What will drive growth in the coming years in India will be theextent of digitization. Every Indian citizen has a digital identity andevery Indian has a bank account. Between 2015 and 2023 we opened
500 million bank accounts. We then linked up bank accounts todigital identities and mobile numbers, and we have over a billion
mobile phones, so everyone does digital transactions on mobiles and
we do 46% of the real-time FAST payments in the world. We areusing this model of digital public infrastructure to provide education
to spread wealth in many other areas, so we are technologicallyleapfrogging in many of these areas, and we will rapidly grow andIndia’s Trade Policy Key to Further Success

Kant: So my belief is that we have signed these bilateral free trade
agreements because we found them to be mutually beneficial. Thisshows that India is not averse to free trade and on the contrary ourgoal is to better integrate ourselves in global value chains. We arestrong believers in free trade, but the economic environment inwhich the RCEP negotiations started and then concluded are very
different. We pulled out of the RCEP because Indians’ concerns were
not being fully addressed. This was a decision guided by pragmatism
rather than idealism. Close to 43% of our labor force is still inagriculture and furthermore millions of enterprises are still microenterprises with much room to grow. We wanted to safeguard theinterests of the millions of our small and medium-sized enterprises(SMEs) and farmers, and any trade agreement with a bilateralregional or multilateral focus must ensure that the interests of all
countries are being met. Each country has national priorities andthose priorities cannot be compromised. We are great believers inJapan SPOTLIGHT • March / April 202413

free trade and we strongly believe that free trade helps to lift people
above the poverty line; free trade enables growth and poverty
elimination but trade agreements must be mutually beneficial, and to
our mind the RCEP was not beneficial to India. The CPTPP we are
examining and we feel it can be a win-win for everyone, including
India.
Toyoda: India did not join the RCEP because it is said to beconcerned about agriculture and SMEs that would be affected by free
trade. There was a time when Japan had similar concerns about
agriculture and some SMEs. Prof. Urata, how do you think Japan
overcame those concerns and is now leading the way to the CPTPP?
Do you have any advice for India?
Urata: This is a difficult and sensitive question. Japan’s policy for
non-competitive sectors like agriculture and SMEs in my view has
been a combination of protection and promotion. As for the
agricultural sector, the five sacred agricultural products are rice,wheat, beef and pork, dairy products and sugar. These fiveagricultural products were excluded from liberalization in any ETA/FTAs that Japan has concluded. As for negotiations in the RCEP and
TPP, as you know Japan was able also to exclude these products
from liberalization. That is how Japan “overcame” this difficult
problem, but in my view, this is not a very good way to deal with the
problem that these sectors are faced with.
What I think we should have done is to commit to tradeliberalization on a gradual basis over time, but what Japan did was to
exclude them and that means no liberalization at all for some time tocome. But I think we should commit ourselves to liberalizing thetrade regime in these sensitive sectors over time, while acceptingthat the government may provide some assistance to them to reduce
adjustment costs in dealing with unemployment problems andproblems which may be reflected in the loss of industry in somerural areas, and so on.
Turning to SMEs, the difference between government policy
towards agriculture and SMEs is very clear. In my view, SMEs are
not protected by high tariffs but they are given assistance in terms ofgetting low interest-rate loans from public institutions and somekinds of subsidies to improve their technology. These are so-called
promotion policies and SMEs are not given protection by trade
policies. Having said that, I would like to recommend India tocommit to gradual trade liberalization, although I know it is very
difficult, particularly politically, but I think it is important to liberalize
over time and during this process reforms should be conducted andimplemented so that in the future these sectors become morecompetitive.
Toyoda: Are you suggesting that India should have some
exclusions?

Urata: No, exclusion is something that Japan should not have done.
Japan should have committed itself to liberalizing the sectors overtime, not right away but gradually.
Toyoda: Prof. Fukagawa, China is enthusiastic about the RCEP. Whyis this a difference between India and China? I think India needs toincrease the level of market openness in order to succeed in its“Make in India” policy. What do you think? Can India really become asuperpower if it remains cautious about free trade or competition?
Fukagawa: That’s another difficult question. There is a kind ofimpression in the last five years or so that India is rather going in the
opposite direction, although as Mr. Kant emphasized, India is more
for free trade but actually we have seen an import licensing system
for automobile tires, color TVs, air-conditioners and many chemicals
or even solar power generation facilities. So we can understand thatIndia is behind China in regard to trade liberalization, even though
the RCEP of which China is a leading member is not a very highstandard of liberalization. Also, if you look at India’s huge trade
deficit with China in terms of goods traded, you will see that Indianindustries are less competitive than Chinese ones. In light of this, I
guess it would be very difficult to gain a trade surplus just withindustrial policies that try to encourage exports with subsidies.
Japan used to be quite similar in terms of agriculture but as waspointed out, the CPTPP was a great opportunity for Japan to be more
serious about agricultural reforms. We have been doing a lot ofreforms about land expropriations of farm areas in Japan and werestructured the land and now have more younger people going into
agricultural businesses. So we definitely need some market pressure
if we are to make reforms, and that’s one thing. The other thing I
would like to counter with regard to India’s integration policy is yourinitiative about the service sector. I know that after introducing the
public identification system, India is pursuing a very interestingsocial experiment in trying to upgrade its huge public services, as
partly pointed out by Mr. Kant. So if this is the situation, I think India
has a huge comparative advantage in various services, including ICT,and so if the RCEP doesn’t look very realistic, then why doesn’t India
participate in the DEPA Agreement first and try to participate in rulemaking on data movement or data technologies, and then it may
have a great opportunity to take the initiative based on its own
experiences. This should be very much appreciated by latecomer
Asian countries which are inferior in terms of competitiveness in theservice industries, as opposed to their super competitive hardware
manufacturing.
Toyoda: Maybe the key ideas here are gradual liberalization andgovernment assistance if necessary, and thirdly service sector
competitiveness. Mr. Kant, do you have some comments on this?
Kant: Some very relevant suggestions have been made and I greatly

14 Japan SPOTLIGHT • March / April 2024

appreciate them because I’m a great believer in free trade and I
believe that it’s not possible for any country to grow at a higher rateover a three-decade period without trade. Exports have to be the key
driver of growth. The challenge with the RCEP was that there wasvery little giveaway on the services sector where India has its
strength and no one wanted to compromise on the services sector,
but they wanted India to compromise on every other sector, and thiswas becoming very difficult for India. But India is not closed to the
RCEP at all and will at an appropriate time consider this proposal
anew. I believe that as we move forward with many of our bilateral
FTAs, India will look at this issue from a different perspective, butthat will be a question of the agreement being mutually beneficial.

South. That is our perspective. We will continue to work in theinterest of global economies and will continue to work in the interestof the Global South. The important thing to realize is that 80% of
growth now is coming from emerging markets and two-thirds of thegrowth in the next three decades will come from emerging markets,and the Global South will continue to play a critical role in the global
economy.

India’s Foreign Policy as a Leader of the
Global SouthFukagawa: India has been in a close relationship with Russia interms of security and has been importing lots of weapons from
Russia due to the potential tensions with China probably, so we canunderstand the position of India. However, we still expect India to bea country of the rule of law and a country of democracy and so insuch terms I think one of the things we need to do is to make India amore efficient country in terms of energy, as well as food selfsufficiency. As Mr. Kant pointed out, India has been chronicallypressured on inflation both by energy resource price hikes and foodprice hikes, and that is why India recently introduced controls onsome exports. However, we all know that India has huge room toimprove its efficiencies in these two sectors, so if we can cooperate
it should create a very nice partnership with Japan. And since we area resource-poor country, we have been making great efforts to makeelectricity transmission as efficient as possible, so this could be agood partnership between us while we try to enhance our ties intimes of geopolitical insecurity.

Toyoda: Turning now to foreign policy. Against the background ofrising geopolitical risks such as the US-China confrontation, theUkraine crisis, and the Gaza crisis, India’s role as a mediator between
the G7 and China/Russia as a leading player in the Global South iscoming under scrutiny. Will India take a different position from its
traditional nonalignment policy? On the other hand, India isparticipating in the Quad and the Indo-Pacific Economic Framework(IPEF), which are being promoted from the perspective of economic
security, but the concept of improved market access is not included.
What is the attraction for India?
Kant: Our position on the various geopolitical risks has been quite
clear and raised in the appropriate forum of the United Nations. We
have taken a pragmatic stance in view of these crises and we haveseen how the destruction of global value chains has impacted theglobal economy. Inflation disruption in industries was just one of theeffects of the pandemic that showed us that supply chains need to beresilient and diversified.
The IPEF for prosperity provides members with flexibility and they
are not required to be signatories to all four pillars of the IPEF. India
has recently signed on to the supply chain resilience agreement of
the IPEF. India is open to the world and wants to integrate itself into
global value chains. Signing up for this pillar of the IPEF provides us
with this opportunity. In the same way, India also signed on to theIndia-Middle East-Europe Economic Corridor during the G20 leaders’summit in New Delhi. We seek to establish ourselves as a reliable
and trusted trading partner.
India’s membership of multilateral forums also allows us tochampion the concerns of the Global South. For instance, we havehosted the Global South Summit which informed the priorities of ourG20 presidency. The inclusion of the African Union into the G20 and
our ability to achieve a full consensus at the G20 on all issues is atestament to our commitment through membership of suchgroupings. We will continue to champion the needs of the Global

Toyoda: I would like to ask Prof. Fukugawa the same question. The
Ukraine crisis is clearly a violation of the UN Charter by Russia. How
would you evaluate India’s refusal to participate in economic
sanctions against Russia?

Toyoda: Japan is emphasizing cooperation with the Quad, IPEF, andother organizations amid the intensifying US-China confrontation. To
ensure economic security, I think it is important for Japan to be
involved in the region. Prof. Urata, how would you evaluate India’s
participation with regard to ensuring economic security?
Urata: I think India’s participation in the Quad and IPEF is very
important in dealing with China’s rapid rise in the international arenaand its very aggressive regional foreign policy. India and Japan sharecommon values such as democracy, human rights, freedom ofspeech, and so on. Because of that, I would like to see India play aconstructive role as it has been playing in maintaining this positionand protecting the international order which China is threatening tochange. I would like to see India lead the group of developing
countries in the so-called Global South to achieve this objective of
maintaining and protecting the international order and I am very
pleased to hear Mr. Kant talk about this. I think I echo what Mr. Kant
was saying about the role that India has been playing on occasions
such as the G20 in 2023. Considering the higher growth of the Indian
Japan SPOTLIGHT • March / April 2024

15

economy and its higher position in the world economy, I would
reiterate that I would like to see India continue to play this very
important role more actively.
Toyoda: I think the keyword here is the stability of supply chains. Mr.
Kant, please provide any objections or supplementary comments on
this matter as well.
Kant: My only comment is that we are in the midst of geopoliticalchallenges such as the Ukraine crisis and the crisis in Syria and the
Middle East, and it is very important that we try to steer
developments. The challenge before the global economy isaccelerating the pace of growth and if we don’t, then sustainable
development goals will be hindered. The world needs strong,
inclusive, sustainable growth. Almost 75% of countries are facing adebt crisis, and almost one-third of the world is in recession:Germany has gone into a technical recession and so therefore in the
midst of these crisis it is very important the countries like Japan andIndia, which share common values and work together on several
platforms, need to promote sanity. We need to drive rationality andtrade, we need to drive prosperity, and we need to work for the
citizens of the world. And therefore it’s very important that we should
bring issues like SDGs and global growth and climate action tocenter stage, rather than getting caught in these present crises which
are confronting the world.

India’s Role in Climate Change
Toyoda: We should discuss such potential cooperation between
Japan and India further, but before that let me turn to other issues
such as climate change. At COP26 in Glasgow in 2021, there wasagreement on “diminishing” rather than “abolishing” coal-fired
power generation, as proposed by India. In response to this, some
said it is a representation of the position of developing countries,
while others are critical of India for delaying action on climatechange. What do you think?
Urata: As you point out, I think there are two different views on
India’s position on this issue. One is to support India’s position as it
is a realistic approach considering the capability of developing
countries in dealing with the reduction of coal-fired power generation
while achieving economic growth. On the other hand, one cancriticize India’s position for a lack of interest or eagerness to deal
with climate change issues or environmental problems, as priorities
are given to economic growth. I understand both views but I am
closer to the second view, and if I may say so, considering theenvironmental problems from a global perspective, India or any
other country should accept lower economic growth to deal with theenvironmental problems. Such an approach would eventually enable
the world to achieve high economic growth in the long run and it
16 Japan SPOTLIGHT • March / April 2024

would be productive if India could, for instance, identify theconditions which need to be satisfied in order to achieve carbon
neutrality by 2050. And then India may come up with measures suchas importing technology or borrowing funds from developed
countries to achieve these objectives, and so I’m curious to know ifsuch an exercise or such a view has been presented or not.
Toyoda: Prof. Fukugawa, the “bad guy” of climate change measures
is “CO2 and methane emissions”, and if fossil fuels aredecarbonized, then it is fine to use them. How do you view theposition of India and other Asian countries which support theposition of India with regard to climate change?
Fukagawa: Regarding the point that Prof. Urata has made, India
should be aware of the need for tackling climate change, including
the threats to agriculture as well as air pollution. One thing India may
be able to bargain with is a commitment to more ambitious CO2
reductions while at the same time trying to use leapfrogging
technologies to attract ESG investment, including in energy-related
business such as renewable energy or sophisticated powergeneration technologies. These will probably require a better
relationship with the US rather than with Russia or maybe perhaps
with European nations. So, I still think India has a lot of room tomaneuver and a huge scope to contribute to the future.
Toyoda: Mr. Kant, please give us your own views on India’s position
on climate change. At COP28, the “abolition” of fossil fuels was
discussed and it was agreed to “transition away” from fossil fuels.
What is your assessment of COP28? Also, India has set 2070 as theyear for achieving carbon neutrality, but is it possible to accelerate
the process?
Kant: First of all let me say that India’s position has been absolutely
clear. We are not responsible for climate change. It is the developed
world that has contributed most to historical emissions. All of the
carbon space has been occupied at 1.5° C and out of the 2,800
gigatons of CO2 emissions 2,400 has been occupied by thedeveloped world. In terms of per capita emissions, India only
accounts for 1.5%, where logically it should have been entitled to17.5% of the carbon space.
The principle of common but shared responsibilities which was
accepted in Paris at COP21 must be respected. Irrespective of that,India is the country which has taken the lead. It is the only G20
country which has achieved its targets nine years ahead of schedule.
We achieved 174.53 gigawatts in February 2023 in total renewableenergy facilities, the fourth-largest amount in the world. The link
between energy security and development is well established anddevelopment necessitates prioritizing economic growth, poverty
reduction and job creation.
At the same time, we have set ambitious climate goals and we arenot abdicating our responsibility. As I said, we achieved our firsttargets under the Paris Accord nine years ahead of schedule and now
we have even more ambitious targets, so that 50% of our electricand storage capacity will be from renewable resources by 2030.
We’re also making a huge push towards green hydrogen to
decarbonize. My own view on COP28 is that it recognizes thephasing out of inefficient fossil fuel subsidies and a phase down ofcoal power. The language keeps the 1.5° C goal intact while allowing
developing countries the space they need to develop.
It’s important that without increased ambition on climate financeand technology transfer, the world’s collective goals face a very realrisk of failure and the developed world will need to provide increased
allocations to the developing world. Assuming that the developed
nations cannot have much room for carbon emissions, they should
be willing to transfer technology, or provide finances for developing
countries to develop technology for environmental protection. Yet
they continue to use fossil fuels and try to impose sanctions on
developing countries for doing the same.
Therefore, our stance has been that these ambitious goals arecontingent on climate finance flows and technology transfer – frombillions to trillions was one of the key outcomes of the G20 summit. I
think it is possible to be more ambitious but the developed worldmust advance its net zero goals before ensuring that otherdeveloping countries advance their goals. Without developed
countries taking the lead in advancing, then zero goals will not be
possible. And greater ambition among developing countries has tobe matched with greater action by developed countries in the realmof both finance and technology transfer. Developing countries mustbe supported in this transition.

India’s Contribution to Science & Culture
Toyoda: That’s very clear. I think developed countries are asking
India to accelerate the process of carbon neutrality. In that case, they
may have to accelerate their own efforts to make it possible toachieve that, for instance by 2040.
The last issue I would like to look at is science and culture. Dr.
Fukagawa, as mentioned at the beginning of this roundtablediscussion, India has excellent scientific knowledge and an
outstanding cultural heritage. How would you evaluate India’s
activities and contributions in terms of science and culture?
Fukagawa: One day when I was walking in Cambridge, a scientist
from India said to me that India is idealizing Japan and I wondered
what he was talking about. But he said that Japan is the only country
that has been producing Nobel Prize winners based on their own
language, and that is what India wishes to do. So maybe we will havea Hindi-based Nobel Prize winner in the future. We have a large
interface with Western cultures and Western intellectual assets, butnevertheless we wish to have some alternative approach towards

humanity’s problems. So I think that Indian education is going to becontributing a lot, especially in basic research, which is supposed toprovide a public good not only in Asia but also globally. So that’s
why I was emphasizing the roles of digital-based technologies. Of
course, India needs to make some progress in terms of hardware but
one of the basic strengths of India is to provide excellent humanresources to lead in software, rather than hardware based on
hardware manufacturing.
Toyoda: Dr. Urata, until now, I feel that the world has been driven byWestern-centric values. In addition to China, I feel that India’s
activities are changing the world’s view of Asia. What is yourevaluation of India, which is said to be the world’s largest
democracy?
Urata: Yes, both India and China recognize that they have so-called
major civilizations, in addition to, say, Egypt. Given that India andChina had these major civilizations, what we are observing now is arenaissance. This is not so surprising and it is quite natural that therise of these countries has a huge impact on the world in many
respects, including economics and politics. They both have big
populations, high economic growth, and importance in regional andglobal affairs, but there are some differences. One big difference isthe one that Toyoda-san mentioned, namely political systems –democracy in India and authoritarianism in China. Japan, being a
democratic country would like India to maintain democracy and leadother countries towards democracy. According to some studies by
research institutes in Sweden or Finland, the number of democratic
countries is declining, and I would like to see India and of course
Japan play an important role in maintaining democracy in the world.
Toyoda: In addition to India’s success in scientific and cultural fields,
there are many people of Indian origin serving as CEOs of worldrenowned companies. Yet while India has cutting-edge science and afascinating culture, discrimination based on gender and status seemto remain. Mr. Kant, what are your thoughts on these issues? Are
you trying to change such social constraints?
Kant: More than half of India’s population is now composed ofwomen and the prime minister has focused on this in a very big way
himself. We have opened hundreds of millions of bank accounts toensure financial inclusion and between 2015 and 2023 we opened
over 500 million bank accounts, over half in the name of women, andover 69% of all micro loans have been to women entrepreneurs,
numbering approximately 35 million. We are creating an ecosystem
where women are not just seen as the beneficiaries of government
schemes but seen as leading development. The focus of thegovernment has been to ensure that everybody has equal access tothe benefits of development. Through a combination of governancereforms and leveraging technology we have been able to better target
Japan SPOTLIGHT • March / April 202417

beneficiaries for government schemes. By ensuring better access,we are empowering the marginalized to chart their own destinies andthe focus is clearly on youth and on women in a very big way.

Future of India-Japan Cooperation
Toyoda: That is very interesting. Finally, I’d like to turn to thecooperation between India and Japan. The relationship between
Japan and India is very close and friendly. How do you evaluate thecurrent situation and what kind of cooperation do you think should
be promoted in the future? Please give your frank opinions on
economics, trade, diplomacy, climate change, and so forth.
Kant: Japan and India are natural partners. We have seen success inthe automobile sector through the partnership between Maruti and
Suzuki, and the role of JICA in building India’s Metro systems, alongwith our country’s partnership in the Mumbai high-speed rail project.
Many of the Delhi/Mumbai industrial corridor development projects
also reflect our close ties. Also in the dedicated free trade corridor,
Japan is one of the largest foreign investors in India and ties have
only gotten stronger.
India’s presidency of the G20 coincided with Japan’s presidency of
the G7 and I worked very closely with my counterparts in Japan
during this time, as India was an invitee to the G7 as well. The twoprime ministers have met on several occasions in India and Japan,
both bilaterally and as part of multilateral summits. They both want
to see the relationship grow. Firstly, bilateral trade between the twocountries totals about $21 billion per annum, being the third-largest
and the fifth-largest economies in the world. This level of trading is
not reflective of our positions in the global economy. We must bothleverage our strengths to build a mutually beneficial and balanced
trade relationship. India’s potential in food processing,
pharmaceuticals and garments sectors can be further utilized, andwe cooperate on sanitary and other non-tariff barriers in the foodprocessing field.
We have a lot that we can learn from Japan in these areas. In
return, India can serve as a reliable trading partner and we must also
continue our cooperation on climate change and energy transition.
With an aging workforce in Japan and a demographic dividend in
India, there is room for cooperation between the two nations onlabor and orderly migration. Indian students are keen to study inJapan and Japan must encourage them and allow them to work for a
few years, given the language requirements. You must become moreof an open economy for Indians in both countries, who need to work
together to grow and advance together. Thank you very much.
Fukagawa: Of course, I think we have a great potential for further
cooperation in various projects and business activities, and as was
mentioned we already have the good example of automobiles andsubways. But probably in the next phase we are going to share
18 Japan SPOTLIGHT • March / April 2024

something that should benefit our societies; we have been suffering,for instance, recently from a huge shortage of pharmaceuticalsupplies because of our broken supply chain system, but India has ahuge capability to complement it. So if we can work on basic
research for mass production of pharmaceutical supplies, that will be
a great improvement and may also contribute to the Indian medicalcare industry, which should in the meantime be very much coveredby national insurance. So these could be common projects. Also,
India seems to have very good evidence-based policy making and wehave relatively good quality of data in terms of old-age medical care,so we could develop a complementary relationship with ourhealthcare industries, and many others. Thus, evidence-based policy
making should be one of the positive common strategies for us toshare.
Urata: The two previous speakers have made all the points that I
agree with, so I will add just one more point. I would like to see morehuman exchanges involving tourists, students, researchers andbusinessmen. I especially think student exchanges should be more
active. There is the potential for more Indian students in Japan and I
would like to see this number increase. I think there areapproximately 1,500 students from India currently in Japan,
compared to approximately 25,000 students from Nepal. Of course,
there are some reasons for this, but the sheer numbers tell us that
our relationship with India in terms of personnel exchanges is notvery developed and there is a huge potential there. Exchanges
between people would increase mutual understanding of theirsocieties and culture, which in turn would expand economic
relations.
Toyoda: Recently I have been trying to promote collaboration
between Indian and Japanese start-ups. Actually, 50 start-up
companies from India are coming to Japan in March or April, so I am
excited about that and there will be some new associations between
Japan and India in this area. I hope that India, in cooperation withJapan, will lead the world as a great power with an Asian worldview
and contribute to building a more peaceful and prosperous world.
Thank you very much for your time today.
Written with the cooperation of Joel Challender who is a translator, interpreter,
researcher and writer specializing in Japanese disaster preparedness.