Special Media Briefing by Foreign Secretary Shri Shivshankar Menon

and Secretary(East) Shri N. Ravi on the forthcoming visit

of Prime Minster Dr. Manmohan Singh to Japan and Philippines

(New Delhi; December 6, 2006)

OFFICIAL SPOKESPERSON (SHRI NAVTEJ SARNA): Good evening ladies and gentlemen. We have the Foreign Secretary here who will brief us first on the Prime Minister’s visit to Japan. Thereafter, we will request Secretary (East) to brief us on the India-ASEAN and the East-Asia Summit leg of the Prime Minister’s visit. Then we will take a few questions.

FOREIGN SECRETARY (SHRI SHIVSHANKAR MENON): Good evening ladies and gentlemen.

As you know, the Prime Minister accompanied by Smt. Gursharan Kaur, will be paying an official visit to Japan from December 13th to 16th, 2006 at the invitation of Prime Minister Shinzo Abe. He will be arriving in Tokyo from Cebu in the evening of December 13th. There will be an official welcome ceremony on December 14th . Prime Minister and Shrimati Gursharan Kaur will be received in an audience by Their Majesties the Emperor and the Empress of Japan in the afternoon of December 14th. Official talks between the two Prime Ministers have been scheduled for December 15th, followed by a Joint Press Meeting and an Official Banquet hosted by Prime Minister Abe.

In a singular honour, the Prime Minister has been invited to address a joint session of the Diet on the afternoon of 14th December. He will be inaugurating the Festival of India in Japan in the same evening, when the two Prime Ministers are also expected to unveil the joint logo of the India-Japan Friendship Year 2007. Prime Minister will be addressing the Business Luncheon hosted by Japanese Apex Chambers in association with India Apex Chambers and IBEF on the 15th.

In addition, Prime Minister will be meeting several Japanese dignitaries, including the former Prime Minister Yoshiro Mori, senior Cabinet Ministers, and the President of the Japan-India Parliamentary Friendship League, Dr. Taro Nakayama. He will depart from Tokyo for New Delhi just before noon on December 16th. As you can see, he has a very full schedule during his stay in Japan.

The last visit of an Indian Prime Minister to Japan was five years ago in December 2001, when Prime Minister Shri Atal Bihari Vajpayee visited that country. In April 2005, Prime Minister Junichiro Koizumi visited India. Our Prime Minister’s visit now to Japan is taking place against the backdrop of a marked upturn in India-Japan relations, particularly since Prime Minister Koizumi’s visit last year.

We attach great importance to our relations with Japan which is a friendly nation and the second largest economy in the world. Japan is the focal point in our ‘Look-East Policy’. We believe that our bilateral relations with Japan are now poised to enter an even more vibrant and dynamic phase, based on converging long-term strategic, political and economic interests and our shared desire to enhance the relationship.

I thought I would highlight some important developments and trends in India-Japan relations.

You would recall that during Prime Minister Koizumi’s visit last year, the two sides agreed to reinforce the strategic focus of the India-Japan Global Partnership established in 2000 during Prime Minister Mori’s visit to India, and to put in place an ambitious “Eight-fold Initiative” to bring about a qualitative shift in the relationship. The Koizumi visit represented a new beginning in India-Japan relations. The extent of the understandings reached and their subsequent implementation have confirmed that there is a shared desire to forge an overdue partnership between these two important Asian countries. India and Japan are now taking a long-term and strategic view of their relationship.

We believe that there is a positive political ambience and cross-party consensus in both countries on the continued strength of India-Japan relations. The bilateral relationship is also benefiting from strong personal commitment on the part of the leaders of the two countries to take it forward. Prime Minister Shinzo Abe has publicly articulated his personal commitment to have stronger relations with India. He has said on more than one occasion, “Japan-India relationship is blessed with the largest potential for future development”. Our Prime Minister fully reciprocates these sentiments. He has been associated with Japan for well over two decades now and is taking a personal interest in moving towards a transformation of this important relationship.

The dynamic growth of this relationship is reflected in the number of high-level exchanges that have taken place since last year. Our senior Ministers including Defence Minister, Finance Minister, Commerce Minister have visited Japan. Likewise, there have been a large number ministerial visits from Japan to India including virtually all the Ministers holding key economic portfolios. There have been similarly enhanced exchanges of Parliamentary delegations and interactions at provincial and official level. There is a parallel process of business and industry in both countries taking note of the opportunities that recent economic developments in India have created for them. That has led to a very sharp increase in exchange of business delegations.

Indeed a key driving force in the relationship now is a shared desire to move towards a comprehensive economic engagement. Bilateral trade in 2005-06 showed signs of growth but remains modest at about six billion dollars last year. Japan is the third largest investor in India with cumulative investment totaling US $2.1 billion. A number of new FDI ventures are on the anvil in the areas of petrochemicals, automobiles, auto components, pharmaceuticals and the financial sector. There is also growing interest among Japanese financial institutions in portfolio investment in India, with the flow of FDI funds from Japan to India estimated at over US$ 5 billion since last year. Both sides, however, realise that the present levels of economic and commercial interaction are way below potential. Both sides are working together to try and enhance the economic content of the relationship, taking advantage of the recommendations submitted by the Joint Study Group to the Prime Ministers of the two countries in July this year.

India today is the largest recipient of Japanese ODA, which we greatly appreciate. The Delhi Metro is a fine example of India-Japan partnership. We are working together on several other projects including a Multimodal Dedicated Freight Corridor between Mumbai and Delhi, and Delhi and Howrah.

Defence and security has also emerged as another important area in the relationship. The Joint Statement signed during the then Raksha Mantri’s visit to Japan in May this year has put in place a structured framework for a dialogue for cooperation and exchanges in this field. Joint exercises are being conducted annually by the Coast Guards of the two countries and the Memorandum of Cooperation between the Coast Guards was concluded last month.

We are also witnessing an impressive increase in the areas of functional cooperation, enhanced S&T exchanges and the strengthening of cultural links. I think both sides recognize the need to step up the present level of human exchanges.

India and Japan are also seeking to upgrade their cooperation and coordination on UN reforms and several other regional, multilateral and global issues. We both have similar visions of an emerging Asian economic architecture.

While looking at the possible outcomes of the Prime Minister’s forthcoming visit to Japan, we have to bear in mind that India-Japan relations today are marked by positive trends - some of which I will try to give you an idea of – and that both sides are seeking to further consolidate those strengths and to raise the relationship to a new level of partnership. We are working to utilize the visit to further reinforce the strategic orientation of the India-Japan global partnership to move towards a comprehensive economic engagement and to bring about a quantum increase in people-to-people exchanges and seeking expanded cooperation in science and technology, energy, and a host of other fields.

Simultaneously, we both recognize that India and Japan will be two key anchors in the new emerging Asian era and that partnership has important regional and global dimensions. Both sides have made extensive preparations for this visit and we believe that it will have substantive outcome.

Thank you. I will be happy to answer questions. Perhaps we will first listen to Mr. Ravi about Cebu.

SECRETARY(EAST) (SHRI N. RAVI): Good evening to all of you. Ahead of Prime Minister and Mrs. Gursharan Kaur’s visit to Japan, Prime Minister would be visiting the city of Cebu for the India-ASEAN and India-East Asian Summit.

The Prime Minister would be reaching Cebu sometime in the evening of 11th of December. On 12th December, there would be some bilateral meetings between the Prime Minister and leaders of other countries. These are being fixed for the first half of the day. From about three o’clock till about six in the evening, there is the Fifth India-ASEAN Summit meeting. The day rounds off with the dinner hosted by President Arroyo for all the Leaders.

The agenda for the Fifth India-ASEAN Summit is - “Review of India-ASEAN Relations – the Future Directions”. As far as our expectations from the India-ASEAN Summit are concerned, we would be reviewing ongoing cooperation. To give you an example, we have set up what are called Entrepreneurship Development Centres in three of the CLMV countries, namely, Laos followed by Cambodia and Vietnam. The one in Myanmar is under consideration and it is going to move forward. We are also moving forward on setting up English Language Training Centres in these CLMV countries. These countries are slightly less developed as compared to the other six members of the ASEAN. CLMV stands for Cambodia, Laos, Myanmar and Vietnam. The fields that we are covering apart from these two are IT industry and cooperation in entrepreneurship.

In February-March 2007, we are going to hold a Ministerial and Industry forum in India as part of the ongoing cooperation. We are also in the process of training ASEAN diplomats and (holding) other human resource development programmes for trainees coming from ASEAN to India. We would also be reviewing cooperation in sectors such as tourism, transport, infrastructure, science and technology.

Just to refresh your memory, early in November, 6th and 7th to be precise, there was a technology summit which was jointly organized by India and ASEAN countries here in Delhi. We would also be reviewing economic cooperation. Particularly to give you a figure, India-ASEAN trade crossed about 21 billion dollars in 2005-06, which is an increase of nearly 21 per cent over the previous period. The discussion regarding ongoing India-ASEAN free trade negotiations would also continue.

The East-Asia Summit, which would be held on the 13th of December, starts off with a plenary followed by a retreat just for the leaders after which there will be a presentation of a report on East Asia regional, economic and financial situation by the President of the ADB. This will be followed by a lunch and signing of the EA Declaration on energy security. At the last summit held in Kuala Lumpur, President Arroyo of Philippines had mentioned energy security as the main theme for the East Asian Summit which is going to be held in Cebu later this week.

As far as the expectations from the Second East Asia Summit is concerned, we would be taking forward some of the processes that were initiated last year to establish a regional architecture for cooperation and deeper integration and the declaration of energy security. There would be an emphasis on promoting the use of bio-fuels and collective efforts to develop renewable sources of energy and development of energy efficient and low carbon technologies, investment in infrastructure and development of clean coal technologies.

Other areas where we would be considering cooperation are finance, education, this recent phenomenon of avian influenza which had affected some of the South East Asian countries severely, and cooperation in the matter of dealing with natural disasters. This obviously has arisen from the rather tragic experience all the countries had in May 2004 as a result of the tsunami.

I would like to stop here and perhaps (you may address) some questions to Foreign Secretary.

QUESTION: Will any agreements be signed in Japan?

FOREIGN SECRETARY: I think we will let you know when we come to them. Let us do the visit, then we will know the outcome.

QUESTION: Mr. Foreign Secretary, what is Japan’s position on civilian nuclear cooperation and on the Indo-US nuclear deal? My question to Mr. Ravi relates to the FTA with ASEAN. The fact that we have not been able to conclude this FTA and given the great promise and the summit-level contacts that we held, does it not sort of detract from the ASEAN-India relationship that we have not been able to conclude these negotiations? And recently there has been a statement from one of the Ministers in Philippines about the possibility of expanding the ASEAN Plus Three arrangement. Would you give us some information whether anything on this line is planned?

FOREIGN SECRETARY: On civilian nuclear cooperation, we have discussed this subject with Japan for sometime, since, as you mentioned, the new frameworks that we are trying to put in place started with the Indo-US agreement starting in July 2005. From then onwards, we have been discussing this subject. It is not a subject we have asked the Japanese to either comment on what we are doing with the US or to commit, because as I said to you earlier, this is an ongoing conversation and as the situation evolves, we keep telling people what we think. We have briefed them, we have told them what we think, we shared views. But I think views are evolving on this subject. I would not like to characterize them today because this I think is still an evolving situation.

SECRETARY (EAST): As regards your first question, I would just like to draw your attention to the growth of India-ASEAN trade since 1990. For example, from 2.3 billion dollars in 1990 we have now reached 23.3 billion dollars. It is a ten-fold increase over a period of 15 years. This simply goes to show the potential that has existed and it also goes to show the potential that exists on the basis of a free trade agreement how much we can achieve more. The fact that the negotiations are taking long, or are becoming hard, as you have perceived it, is a clear indication of the fact that all the sides want to cover their interest in a manner that will help the growth of this trade which is showing such a great promise. It is to this end that both sides want to keep negotiating and come to a conclusion in such a way that the business and commercial and trading interests on both sides, that is in India and in ASEAN, are given a framework which can really help them to grow for the next fifteen if not next twenty years on the basis of a good agreement that has been arrived at.

As regards the ASEAN Plus Three FTA and the Philippines leader’s comment, we must note that the ASEAN Plus Three phenomenon began in the late 90s and they have had a head start as compared to the India-ASEAN FTA. The sheer fact is that the volume of trade exchange between ASEAN and ASEAN Plus Three is much more and in multiples as compared to our own. So, the two actually stand on two different frameworks. I would not like to sort of connect the two and say that whether that is good or whether our FTA is going to be affected by that.

QUESTION: I was asking about the political summit. There is some talk of expanding ASEAN Plus Three arrangement to ASEAN Plus Four arrangement which would include India. Is there anything on that?

SECRTARY (EAST): I have no idea.

QUESTION: Could you tell us something about the status of negotiations on the negative list? Has any figure been given?

SECRETARY (EAST): The negotiations are still going on. It would not be proper for me to reveal the extent of the negative list right now.

QUESTION: Is there a meeting planned between our Prime Minister and the Chinese Premier? Secondly, what are the prospects of an FTA between India and Japan? Could you give a little more detailed idea of this comprehensive economic engagement which you are planning with Japan?

FOREIGN SECRETARY: I think they are working on bilateral meetings in Cebu and one of the meetings they are working on is a meeting between our Prime Minister and the Chinese Prime Minister.

On adding content to the economic relationship, I think the Joint Task Force has produced a set of recommendations and both systems have processed these recommendations. It is really for the Prime Ministers to decide whether or not they want, which ones they want to move ahead on and in what form they want to start looking at possible agreement, whether we look at them, whether we show them what form, and so on. So, I think to say now would be a little premature. They will have a discussion on this when Prime Minister will go to Japan. By the end of next week I think you will know what sort of agreements we are looking at, what kind of comprehensive economic agreements we are looking at with Japan.

QUESTION: Mr. Menon, what is the status of G4? The Indian quest for permanent membership of the UN Security Council, will this be high on the agenda of talks? My question for Mr. Ravi is, is there any plan for expansion of East Asia summit membership …?

FOREIGN SECRETARY: On the G4, we continue within the G4 to consult and coordinate. About reform of the UN Security Council, we have just had a meeting actually of our officials in Geneva last month. We plan to meet again in New York before the debate on December 11th in the General Assembly on the reform of the Security Council. Obviously, we as India and the G4 as a group were still talking to other countries, to other groups to gather the largest possible measure of support for our ideas of reform. In this process I think various ideas are being thrown up by other countries, by other groupings. It is our hope that after this process of discussion and the debate in the General Assembly on 11th of December that we would have moved closer towards our goal which as you know is a permanent seat in the UN Security Council. I cannot be more specific at this stage because it is an evolving situation.

SECRETARY (EAST): At present the East Asian Summit comprises 16 countries and as of now we have not heard of any plans of expansion or increasing its membership.

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