Eastern Epiphany

IN THEORY, THERE ARE few nations that make a better economic and strategic fit than Quad partners and civilisational cousins India and Japan. The former is fast-growing and demographically effervescent while the latter remains in a holding pattern economically and faces a labour crunch. India needs technical expertise and investments to develop its infrastructure. Japan has capital to spare and knowhow to share.

Some of these synergies were on display when Japanese Prime Minister Fumio Kishida visited India earlier in the month. But the real common denominator that has the archipelago and the subcontinent on the same strategic page is their mutual wariness of China’s creeping sway over Asia.

Kishida’s announcement of over $75 billion worth of infrastructure and security assistance for the Indo-Pacific, through private investments and yen loans, was made with an eye firmly on containing the influence of the Chinese Mainland in the region. The Japanese political class has for many years been keenly aware of the importance of decoupling its economy from China’s, with India being seen as a potential replacement.

Yet, despite all these favourable factors, the Indo-Japanese bilateral relationship remains strangely hamstrung. Economic ties, in particular, do not match the strategic closeness that New Delhi and Tokyo have developed. They are underwhelming, not only in relation to their potential but also when compared to the bilateral equation that each nation has with their common bête noir: China.

Japan-India two-way trade stood at $20.57bn in 2021-22, a fraction of the heft of the $371 billion that Japan-China traded in 2021. In fact, China is Japan’s largest trade partner. Even India’s trade with China (which was at an all-time high of $135.98bn in 2022) dwarfs its equivalent with Japan. The share of India-Japan trade in Japan’s total trade basket is barely 1 per cent and it is a little over 2 per cent of India’s trade with the rest of the world. Japanese investments in China are similarly multiple times higher than equivalent investments in India.

The most high-profile Japanese investment in India is the country’s first high-speed rail corridor, from Mumbai to Ahmedabad, which is being developed using Japanese technology and financing. It was inaugurated in 2017, with Japan providing 80 per cent of the funding through a soft loan with an interest rate of just 0.1 per cent. Somewhat predictably, land acquisition delays have significantly slowed implementation. The project was slated for completion in 2023, but today, large swathes of the 508km corridor remain unbuilt.

In many ways, this project is the bellwether of how the Japan-India relationship might fare, going forward. If it succeeded, on time and according to plan, it would pave the way for more Japanese investment in critical Indian infrastructure, boosting trust and facilitating cooperation in third countries as well. But if it, as it in matter of fact has, hit snags, the deal would once again highlight a cold truth: the yawning gap between the theoretical fit and practical dissonance in the Japan-India economic relationship.

This gap cannot wholly be explained by the usual suspects that plague foreign investors in Indian ventures. Corruption, inadequate infrastructure, complex tax regulations, and land acquisition problems are certainly significant challenges, but they do not constitute the whole troubled picture.

The greatest challenge keeping India and Japan apart is a cultural incompatibility that I sum up as the jugaad-shokunin dichotomy. The jugaad mentality is widespread in India. It relies on ingenuity, bending rules, and making do with the good enough under difficult circumstances.

It is a business culture characterised by overpromising and underdelivering; about finding loopholes and patching tears in an improvisational manner. And it is about as un- Japanese as being late to an appointment.

In contrast, in Japan, it is the shokunin spirit, or the relentless pursuit of perfection through the honing of a single craft, that reigns supreme. This approach is embodied in, for example, the sushi chef apprentice who must train for 10 years before being allowed to cut the fish, or the sake brewer who at night only dreams of yeast. The shokunin is always aware that perfection is inevitably elusive, but regardless, must never be given up on.

Katsushika Hokusai, the iconic woodblock print master of celebrated works like the Great Wave of Kanazawa epitomised a shokunin. On his deathbed, the almost 90-year-old is supposed to have said, “If only heaven would give me another 10 years or even five, then I could become a real painter.”

When I was based in Tokyo, I interviewed Tomofumi Nishizawa, manager of the Japan External Trade Organization’s (JETRO) Overseas Research Department. He spent five years at the organisation’s India office between 2011 and 2015. According to him, it took Japanese companies in India longer than their Korean or Chinese counterparts to learn how best to localise their products for the Indian market. He gave me the example of air-conditioners.

The Japanese, he said, fixated on the quality of the air-conditioner, so that they would be able to last without the need for repairs. But in India, it was cheap to have an air-conditioner repaired and technicians were easily available. The consumer was therefore more focused on cost than durability. And more on cost than on perfection. In other words, on jugaad—rather than shokunin.

Nishizawa felt that one company that had cottoned on to India’s particularities was the Japanese air-conditioner manufacturer, Daikin. The company had therefore switched from importing expensive parts from Japan to sourcing them locally. It began to focus more on cost than durability. On speed rather than on perfection. On jugaad rather than shokunin.

The fact is that while it has its advantages, the shokunin insistence on perfection hampers the ability of Japanese firms to succeed in environments that prize flexibility and innovation. In contrast, the Indian penchant for jugaad makes it difficult to align with a business culture that prizes rules, reliability, standardisation, and excellence.

Were Japan and India to eventually realise the strong potential that their combined forces could represent, they would first need to find a way to bridge the jugaad-shokunin dichotomy. A more flexible Japan and a more reliable India would only be to the benefit of both.

And how does China fit in this picture? It is both supple and process-oriented, a nation that displays key elements of both jugaad and the shokunin mindset in its business culture. This makes it a formidable opponent, both economically and strategically. If Japan and India hope to rival their neighbour’s heft, they have little choice but to move towards bridging the culture/mentality gap that currently keeps them apart. Government-to-government closeness will remain fragile until the business-to-business story can acquire real bones.

diplomatic relationseconomic tiesIndia-JapanjuggadShokuninwork culture