With industrial value chain envisaged in NE, India, Japan hold Act East Forum meeting

India and Japan held the seventh Act East Forum meeting in New Delhi on Monday. ETV Bharat’s Aroonim Bhuyan writes about the significance of this meeting for India’s northeastern region and the Indo-Pacific overall.

New Delhi: Days after Japanese Ambassador to India Hiroshi Suzuki said that his country is taking forward the concept of creating an industrial value chain in India’s northeastern region, the two countries held the annual Act East Forum meeting here Monday. The meeting was co-chaired by Foreign Secretary Vinay Kwatra and Suzuki.

“On the Japanese side, participants included the Embassy of Japan and Japanese government institutions located in Delhi,” the External Affairs Ministry said in a statement. “As part of the Act East Forum, they reviewed the progress of the cross-border survey for improving trade and logistics between India and Bangladesh through Northeast and ongoing projects in various areas, including connectivity, new and renewable energy, urban development, forest management, skill development, agriculture and fisheries, healthcare, capacity building in disaster resilient infrastructure, agro-industries, tourism and cultural exchange, and Japanese language education. They also exchanged views on possible new areas of cooperation.”

In 2017, India and Japan established the Act East Forum with the aim of enhancing the development of India’s northeastern region and fostering connectivity within this area as well as between the Northeast and Southeast Asia. The establishment of the Forum underscored the convergence of Japan's Free and Open Indo-Pacific and India’s Act East Policy. In alignment with this shared vision, both countries have committed to launching a comprehensive initiative dedicated to the sustainable development of the northeastern region. This initiative is designed to complement the ongoing developmental efforts led by the state governments of the Northeast and the Government of India.

So, why is the Northeast so important in the ties between India and Japan? Two reasons: connectivity in Southeast Asia and security in the Indo-Pacific region. The Indo-Pacific region stretches from the east coast of Japan to the east coast of Africa. Both India and Japan agree that the 10-nation Association of Southeast Asian Nations (ASEAN) regional bloc has to play a central role in the peace and prosperity of the region.

India and Japan share a ‘Special Strategic and Global Partnership’. In December 2017, India and Japan established the Act East Forum, which aimed at providing a platform for India-Japan collaboration under the rubric of India’s Act East Policy and Japan’s Vision of a Free and Open Indo-Pacific. The Forum identifies specific projects for economic modernisation of India’s Northeast such as those pertaining to connectivity, development infrastructure, industrial linkages as well as people-to-people contacts.

Under the Act East Policy, the Northeast, which shares historical and traditional bonds with the ASEAN region, is seen as the springboard for India’s increasing engagements with Southeast Asia and New Delhi has roped in Tokyo in a big way. Japan’s role in development work in the Northeast is also expected to boost connectivity between the member states of the BIMSTEC sub-regional grouping.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which came into existence in 1997, comprises seven countries lying in the littoral and adjacent areas of the Bay of Bengal--Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand--membership in the bloc allows India to engage more with the extended neighbourhood in Southeast Asia under New Delhi's Neighbourhood First Policy via northeastern India. This will also help keep in check China's growing influence in the region through Chinese President Xi Jinping's pet Belt and Road Initiative (BRI) project.

Various projects involving over Rs 19,100 crore of assistance from the Japan International Cooperation Agency (JICA) are being implemented in the Northeast. These include the National Highway between Shillong and Dawki, the National Highway between Tura and Dalu--both in Meghalaya--and the one between Aizawl and Tuipang in Mizoram. There will also be a corridor linking Gelephu, the border area between Assam and Bhutan and Dalu, the border town between Bangladesh and Meghalaya, in collaboration with the Asian Development Bank (ADB).

This will include the Dhubri-Phulbari bridge project across the river Brahmaputra, which will be the longest river bridge in India when completed, as part of the Northeast Road Network Connectivity Improvement Project. The development of main district roads (MDRs) and other district roads (ODRs), which will have a positive socio-economic effect is also a key part of these infrastructure projects. Other infrastructure projects funded by JICA like the Matarbari port in Bangladesh are expected to provide an entry point for Indian businesses to establish a foothold in Southeast Asia.

In March 2022, JICA signed a loan agreement with the Government of India to provide Rs 1,492 crore for the Northeast Road Network Connectivity Improvement Project for the National Highway between Khowai and Sabroom in Tripura. Biodiversity conservation and forest management projects are also part of JICA’s development assistance in the Northeast. These include the Sikkim Biodiversity and Forest Management Project, the Nagaland Forest Management Project, the Project on Capacity Enhancement for Sustainable Agriculture and Irrigation Development in Mizoram, the Project for Sustainable Catchment Forest Management in Tripura, and the Project for Community-based Forest Management and Livelihoods Improvement in Meghalaya.

The Japanese agency is also assisting in the development and management of water resources in the Northeast. These include the Guwahati Water Supply Project in Assam and the Project for Renovation and Modernisation of the Umiam-Umtru Stage III Hydroelectric Power Station in Meghalaya. However, why Monday’s Act East Forum meeting assumes additional significance because of Ambassador Suzuki’s comments last week about taking forward Japanese Prime Minister Fumio Kishida’s concept of creating an industrial value chain in the Bay of Bengal region covering India’s northeastern region and Bangladesh.

“It was in Delhi last March that Prime Minister Kishida launched the New Plan for Free and Open Indo-Pacific,” Suzuki said while speaking at the fourth India-Japan Intellectual Conclave organised by the Asian Confluence think tank in Shillong. “The concept of creating an ‘Industrial Value Chain’ in the Bay of Bengal region, spanning the wide areas of Northeast India and Bangladesh, is now almost one year old. Several significant developments have taken place over the past year towards the creation of such an industrial value chain.”

Suzuki said that one potential sector for creating such an industrial value chain is agriculture. “There is a Japanese company, which is interested in introducing best-quality. Shiitake mushroom farming in the Northeast, by harnessing the geographical features and climate similar to Japan, and utilising Japanese fungus technology and machinery,” he said.

He also stated that another Japanese company has conducted an experiment on smart agriculture by using drone technology in Meghalaya, with the North East Centre for Technology Application and Reach (NECTAR). “It would be wonderful if Japanese technology and know-how could be utilised to bring innovation in agriculture to start a new industry in the Northeast,” Suzuki said. “In this context, let me also mention that last October the Japanese Ministry of Agriculture, Forestry and Fisheries held a job fair in the agricultural sector in Guwahati. It was attended by 250 people.”

According to the Ambassador, Japanese assistance in the development of agricultural human resources in the northeastern states will further enhance the potential of creating a new industrial value chain. “Another potential sector could be clean energy,” Suzuki said. This region is endowed with the Himalayan mountains in the north, running through Nepal, Sikkim, Bhutan and Arunachal and providing abundant water resources. This can attract the interest of clean energy-related companies. If the hydropower generated in the Himalayas can be utilised by industries in the Bay of Bengal region, it might open a new aspect of the industrial value chain.

As part of creating an industrial value chain, Suzuki said that a Japanese company is interested in creating a cold chain, such as cold storage of vegetables and fruits, to meet the demand for high-end resorts in the Himalayan kingdom of Bhutan. “Another potential is the Gelephu Special Economic Zone initiative, announced in December last year,” he said. “This initiative may provide a new horizon for potential connection between the industrial value chain in the Northeast and Bhutan.”

The Gelephu Special Administrative Region (SAR) called the Gelephu Mindfulness City announced by Bhutan’s King Jigme Khesar Namgyal Wangchuk on the occasion of the Himalayan kingdom’s National Day in December last year is expected to be a game-changer for the region facilitating productive flow of capital and knowledge.

Gelephu Mindfulness City will be developed in the Sarpang district of Bhutan bordering the Chirang district in India’s northeastern state of Assam. This ambitious initiative, covering approximately 1,000 sq km from Taraythang Gewog to Singye Gewog in the Himalayan foothills, seeks to elevate Gelephu into a prosperous economic centre, not only benefitting Bhutan, but also contributing to the broader South Asian region. In his address, Wangchuck highlighted the vision for the Gelephu SAR, recognising the influence of Bhutanese individuals living abroad in propelling the nation toward unprecedented socio-economic advancement. This commitment underscores the government’s dedication to harnessing the potential of its global diaspora.

“The Act East Forum meeting discussed cross-border connectivity with Bangladesh amongst other areas,” Sabyasachi Dutta, Executive Director of Asian Confluence, told ETV Bharat. “Investing in building transboundary industrial value chains between the Northeast and Bangladesh is a promising area of cooperation.”

It is also worth noting that Ambassador Suzuki stressed the importance of the people-to-people connection between India and Japan during his address at the Shillong conclave. “With the development of such people-to-people connect, the Northeast will truly become the centre of the Act East policy, and the cornerstone linking India and Japan,” he said.