Showing posts with label Japan. Show all posts
Showing posts with label Japan. Show all posts

Sunday, December 15, 2024

Singular Music

 

This is a collection of short-stories Murakami published in 2020. The title comes from the last story in the collection but the one I liked best is the one depicted on the cover - "Confessions of a Shinagawa Monkey"  / Ichininshō Tansū (一人称単数).

It is a story that brings together a number of elements I love about Japan - the inclination to experience nature, the everyday courtesy, openness to absorbing and improving upon foreign music, literature, food and technology. With some effort it seems even monkeys can improve themselves in Japan :)

As with most of his books, quite a few of stories in this collection revolve around music, mostly jazz or western classical. Many of these pieces are completely unfamiliar to me, so my way of indulging in immersive reading is to settle down with the book on my favourite chair with a drink, a bowl of snacks (if KakiPi is nor available, murukku or banana chips will do), and to play as background music one one of the pieces that appears in the storyline.

In this collection, no less than three stories have their titles that indicate which type of music is going to dominate the narrative - "Charlie Parker Plays Bossa Nova", "With the Beatles" and "Carnaval". The last one comes with a specific recommendations - Schumann's Carnaval by Arturo Benedetti Michelangeli (Angel Records) or the one by Arthur Rubenstein (RCA  Records)!

An enjoyable, uplifting read.

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Music from 'First Person Singular' / Ichininshō Tansū (一人称単数):

  • Jazz - Charlie Parker - Ornithology - the best of Bird
  • Charlie Byrd - Corcovado (also a hill in Rio, Brazil - home to the statue of ‘Jesus the Redeemer’)
  • Pharoah Sanders
  • Miles David
  • Art Pepper 
  • Thelonious Monk
  • Beethoven Piano Concerto 1 - 3rd movement 
  • Middle-class music: Mantovani Orchestra -- Percy Faith -- Roger Williams -- Andy Williams -- Not Cole King
  • Max Steiner - Theme from A Summer Place (Percy Faith Orchestra)
  • Rolling Stones - “(I can't get no) Satisfaction"
  • Byrd - “Mr.Trambourine Man”
  • Temptations - “My Girl”
  • Righteous Brothers - “You've lost that lovin’ feelin’
  • Beach Boys - “Helping Rhonda”
  • Diana Ross
  • Supremes
  • Classical - Bruckner - 7th symphony, 3rd movement / 9th symphony 
  • Richard Strauss
  • Prokofiev - Romeo and Juliet 
  • Schumann - Carnaval -- by Arturo Benedetti Michelangeli (Angel records) or Arthur Rubenstein (RCA)
  • Bach - Goldberg variations + well tempered clavier
  • Beethoven - late piano sonatas + third Concerto 
  • Folks Crusaders - “I only live twice”

Sunday, June 12, 2022

Kokoro

 


I like books that breathe life into familiar streets.

"Kokoro" by Natsume Sōseki begins with a brief description of the streets of Kamakura, Japan, as seen through the eyes of a young student in the early 1900s. Almost a century after the book was written I too made my way  from famous Buddha statue at Kōtoku-In, down from Hase to the road that leads to the main beach where the main protagonist of Kokoro records his first meeting with an older man who becomes his "Sensei", his mentor and guide.

The Sensei is a compulsive loner - a reticent man who prefers to keep to himself. Yet an equation develops between the old man and his persistent, and oftentimes insolent student, which bring up interesting discussion on the nature of life and relationships. I was struck in particular by this observation - 

"You seem to be under the impression that there is special breed of bad humans. There is no such thing as a stereotype bad man in this world. Under normal conditions, everybody is more or less good, or, at least, ordinary. But tempt them, and they may suddenly change. That is what is so frightening about men. One must always be on one's guard."

Thursday, October 28, 2021

The Gentle Way to Self-Defence

 


Today's Doodle honours Kano Jigoro, the 'Father of Modern Judo' on his 161st birth anniversary.

A series of neat panels illustrate the life of this remarkable man who developed the institutions that globalised Judo (柔道 lit. "gentle way"), to take it beyond the Samurai class, to make it an international olympic sport.

This also brought back memories of the University of Tsukuba where I had my first brush (and bruises, sprains and near dislocations!) with this remarkable art of self-defence. Memories of stepping into the airy, well-lit Budokan for the first time; the tatami-matted practice halls; the feel of coarse, stiff judo-gi outfit that would break your fingernails, and that peculiar smell of deodorants mixed with sweat, blood and dried. 

I had been amazed to see how men and women trained together, and how once a month,  the elite Tsukuba Blue Team held an open house with other enthusiasts. Olympic medallists sparred with schoolchildren on one side, and grandfathers teaching pigtailed grand-daughters on the other.

A portrait of Kano Sensei  and his many quotations lined a wall in the Budokan,  looking down on us with with his bemused, slightly bored expression, watching over various groups going through their paces - sparring, fighting, and learning how an opponents physical strength could be used against them.

Tsukuba University apparently grew from the educational institutions Kano set up a century earlier. Sometime during 2010 the university suddenly decided to replace the statue of a Greek hero with that of this venerable teacher. So imagine our surprise when during a visit to the post office, we looked up to find that in place of a naked, muscular European, stood a fully clothed statue of the man who repackaged Jujitsu into Judo for the world!

Perhaps it would have been more appropriate - and less expensive -  to have a sporty statue of his in front of the university Budokan or Sports Department, but then, when it comes to sentimental matters, the Japanese do not seem to believe in Kano Jigoro's dictum -  "Maximum efficiency with minimum effort" (精力善用 seiryoku zen'yō)!

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REFERENCES & LINKS

* The pioneer of Judo  - https://www.tsukuba.ac.jp/en/about/history/kano/index.html

* The Olympic Movement and J Kano - https://www.joc.or.jp/english/historyjapan/kano_jigoro.html


Monday, May 17, 2021

Murakami and All That Jazz


Each time I finish reading a book by Haruki Murakami I swear that I am not going to fall for his formula again. Just like Bollywood script-writers, Murakami too has a set of predictable ingredients in his books - a protagonist who loves eating / cooking, a least one cat, cocktails, jazz music, and a storyline that borders between the vague, the mysterious and the paranormal.

Men Without Women is not a full blown novel but a collection of short stories. It is, as the blurb, says pithily - "...about the lives of men who, in their own ways, find themselves alone. Here are lovesick doctors, students, ex-boyfriends, actors, bartenders, and even Kafka’s Gregor Samsa, brought together to tell stories that speak to us all."

Stories that speak to us all? I am not so sure about that, but then maybe I am just an outlier, a literary junkie who returns returns every now and then for his Murakami fix, to escape the dreary world of non-fiction.

What I love about Murakami's writing is the way it seems to anticipate and guide a readers sense of curiosity. I like the way it describes the familiar cityscapes of Japan - especially Tokyo, and most of all I enjoy the way it introduces you to music - especially jazz classics. As in - “His voice was low and smooth and reminded me of Barry White’s music...” At this point I can read no further until I have searched the net and found out what is so 'low and smooth' about Barry White's music!

In this collection of seven short-stories, I liked "Kino" the best. This one follows the oft repeated, semi-biographical theme of a guy who tries to reboot his life by setting up a bar, on a street behind the Nezu Museum. It is also the story with the largest collection of jazz classics.

Once again I have finished reading the book by telling myself that I am not going to touch another Murakami. It is a promise I am bound to break in a few months.

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LINKS

* Music from the book "Men Without Women":

> Barry White - Greatest Hits - https://youtu.be/Re_f1UOWyNg

> Coleman Hawkins - "Joshua Fit the Battle of Jericho" - amazing bass solo by Major Holley - https://youtu.be/Ylf7s2_tOxo

> Billie Holiday - "Georgia on my mind" -- https://youtu.be/QkYt9r_B8Qw

> Erroll Gardner-  "Moonglow" -- https://youtu.be/yLWbuDFSZ58

> Buddy DeFranco - "I Can't Get Started" -- https://youtu.be/AiqLALvz8Sc

> Teddy Wilson

> Vic Dickenson

> Buck Clayton

> Ben Webster - solo " My Romance" -- https://youtu.be/mgBdid4aFgI

> Rock or Blues - Derek and the Dominos, Otis Reading, The Doors

> Clifford Brown's solos (jazz)

> Percy Faith - "A Summer Place" --(Greatest Hits) - https://youtu.be/DOko--B4CNo

> Francis Lai - "13 Jours en France" -- https://youtu.be/Qz6R9zEfzd0

> 101 Strings - All tracks - https://youtu.be/4Yd2PzoF1y8

> Paul Mauriat - Greatst hits - https://youtu.be/vEAiwmVkL-U

> Billy Vaughan - https://youtu.be/tUJPg3wa1LU

> Frank Chacksfield - Top tracks - https://youtu.be/VATF93NMujk

> Raymond Lefévre - https://youtu.be/B2M6FYWkB8A

> Montovani - https://youtu.be/e7gMxhVPgCs

> Henry Mancini - "Moon River"  - waiting around the bend, my Huckleberry friend... https://youtu.be/WZ8j-X1hq1I

> New -- Gorillaz https://youtu.be/uAOR6ib95kQ of Black Eyed Peas - https://youtu.be/vMLk_T0PPbk


* 2009 post - "Music and Murakami" - https://dinakarr.blogspot.com/2009/07/music-murakami.html

Monday, October 05, 2020

Tsuneno's World

 


Let us be upfront about two things about this book: first, its a fine piece of work, and second, it might look like a tome but its not - nearly half the book is notes, bibliography, references and the index!

Amy Stanley's "Stranger in the Shogun's City" is a labour of love spanning nearly two decades. It is the real life story of an ordinary girl named Tsuneno, daughter of a temple priest, who gets married at 12, lives through four divorces and many journeys through Japan before landing up as an impoverished migrant worker in the capital city of Edo, now Tokyo.

The book reconstructs her life from a vast collection of letters that Tsuneno sent to her brothers back home. Letters that were preserved at Risenji, a temple in Ishigami village for nearly 200 years before finding its way to the archives section of a library in Niigata Prefecture. 

Tsuneno's lifetime (1801-1853) covers one of the biggest inflection points in East Asian history - the colonial powers, the Dutch, England, France, and Americans are carving out their colonies in Asia, and the Japanese Shogunate is waking from its slumber to see the aftermath of gunboat 'diplomacy', the Opium Wars and the humiliation heaped on China. It is also a time of terrible deprivations - especially the Tempo Famine (1833-37), a period when -

 "...it was hard to say how many died of hunger and how many died of epidemic diseases - typhus and dysentery - the ravaged the weakened population...in the northeast, half the peasants in one domain had died of some of the survivors had resorted to cannibalism. Even reliable accounts described people reduced to eating grass and straw sandals, roadways strewn with emaciated corpses, and gravediggers too weak an exhausted to continue their work".

The book brings to life many familiar places in Tokyo - Chiyoda, Kanda, Tsukiji, Ginza - areas that are now teeming with skyscrapers, clean roads and manicured gardens. It is good to be reminded of the millions of hapless migrants like Tsuneno who did their bit to raise a grand city from dirt and squalor.

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REFERENCES & LINKS

* Stanley, Amy (2020): STRANGER IN THE SHOGUN'S CITY - A Japanese Woman and Her World, Scribner 2020




Thursday, May 07, 2020

Think Ink

Do we really need to consume so much? 
Can we reduce out trips to the market? 
How can we reduce wastage?

Over the past two months of the Covid-19 lockdown, we have all been asking ourselves questions. Among the many things that have been dusted out from storage and rescued from a careless toss into the garbage bin are these little 60 ml bottles of ink.



Apart from saving us a few hundred rupees in the new fangled use-and-throw gel pens, these ink bottles also tell us about changing company fortunes, inflation, shelf-life and even consistency in product design.

I had purchased the 60ml bottle of 'Permanent Black' Camel black ink (yellow pack) in 2005 for INR 12.00. Fifteen years later, I got a similar bottle of 'Royal Blue' ink for INR 20.00. At a time when disposable gel pens costing about INR 10.00 get jammed if you don't use them for a few months it is quite amazing to see how you can just refill and start using a fountain pen with ink purchased more than a decade ago!

The smell of fountain pen ink is bound to revive old memories -  of stained hands, spilled bottles and frayed nibs; Of that flick of the wrist which would send a lovely arc of droplets across a wall or a school uniform, and, for folks from Trivandrum, a tiny shop called the "Pen Hospital" which specialised in repairing fountain pens.

On the face of it you might also think that the ink bottle has remained more or less unchanged over the years, but look closer and you see subtle differences: "Camel" has changed to "Camlin". The tiny camel that was walking towards the lettering is now going in the opposite direction. Ink which was packed in a heavy glass bottle with a metal cap now comes in a light, cheap, all plastic bottle. The company too has been taken over (2012) by a Japanese conglomerate and is now called Kokuyo Camlin Ltd.

At a time when all the stationery shops are closed, it is quite amazing to think of the number of ballpoint, gel and roller refills we use every year, and to realise just how many of these can be replaced by a simple, 60ml bottle of fountain pen ink!

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LINKS & REFERENCES:

* https://en.wikipedia.org/wiki/Kokuyo_Camlin
* (2013) - https://www.business-standard.com/article/companies/japan-s-kokuyo-to-buy-majority-stake-in-camlin-111050200075_1.html
* https://penhouse.in/
* About Ink Refills - https://www.youtube.com/watch?v=whBNxSXm-EE
* Difference between ballpoint, gel and roller-point - https://www.youtube.com/watch?v=5HQR8TqLJCs

Saturday, October 06, 2018

Apostille of Fake Degrees



Last week I signed up for a UN assignment in Afghanistan. It was the culmination of a long drawn out selection process - online applications, verification of credentials and interviews. I need to be in Kabul for two months for the independent evaluation of an FAO project.

Having visited, worked and stayed in a few countries over the past 23 years, I thought I was familiar with the formalities involved in international travel. In this case, instructions from FAO were quite clear: "Approach Embassy with all relevant documents - Passport, photographs, degree certificate photocopy and original , signed contract document, MOFA reference number. Ticket is not necessary for visa".  

At the Afghan Embassy visa counter however, the officer flipped through my documents and asked me a question that left me quite stunned. "How do we know", she asked with genuine concern, "That your degree certificates are not fake?"

I tried telling her that, in the first place, I would not be selected by the UN for an assignment if I had fake degrees. I had two Master's degrees - the first from IRMA and the other from Tsukuba University, Japan. Both could easily be verified online on the official alumni pages. Also, I had got the second degree on a full scholarship from the World Bank - a fact that could be easily verified on a Google search since my entire Master's thesis was available online. 

The visa officer was unmoved. "Rules are rules", she insisted, "If your highest degree is from Japan, it has to be endorsed by the Japanese Embassy in India. All Indian degrees have to be verified by the Indian Ministry of External Affairs (MEA)". She also added helpfully that applicants got it done at Patiala Courts where extra fees was charged for 'fast service'.

One of the lessons I had learnt is that there is no point arguing with with a Visa Officer. I walked out of the Afghan Embassy, crossed the road, and checked at the Embassy of Japan. They did not have any facility for "endorsing" certificates from Japanese universities. All they could do was to check with their registry and give me a letter saying that the university seal was genuine. This process would take at least three working days, and cost Rs. 2300. 

What next? I had no idea that MEA had anything to do with certification of education documents. Outside the Japanese Embassy, I set my files on a concrete blast-barrier and googled "India MEA education certificate endorsement". I got this page and learnt a new word: apostille.

It was a two-step procedure. First, the degree certificate had to be endorsed by a state government authority, and under Step-2 "MEA legalises the documents on the basis of the signature of the designated...authorities. Hence it does not take responsibility of the contents of the documents". MEA charged Rs.50 per document for this service. As expected, there was no mention of the time-frame involved.

Strapped for time, I now headed towards Patiala House Courts Complex, into the den of brokers, middlemen and lawyers dressed in 50 shades of black. In one of the many hole-in-the-wall offices, I presented by predicament to one of the broker-lawyers.  He feigned deep concern, quickly gauged my desperation level, and quoted his fees: Rs. 3000. 

So, for a government service worth Rs.50, I had to shell out Rs. 3000. Within this margin lies the thriving new economy of the apostilles. An education certificate from IRMA, an automomous education institution in Gujarat, is endorsed by a Sub-Divisional Magistrate in another state, Delhi, who proclaims it as genuine. Based on this, MEA legalises it 'without taking any responsibility of the contents of the documents'.



Come to think of it, this is a racket no different from that of the Public Notaries who blindly attest any document with a Government of India seal. The only difference is that you get a fancy sticker with a flurry of seals and signatures behind an education certificate.

Why would any Embassy encourage this kind of daylight robbery? Is this merely the game of passing-the-buck between bureaucrats of different countries?  A friend who has worked in Afghanistan for over a decade said this rule was introduced in 2013 to avoid fake people with fake degrees from getting posh jobs in Afghanistan. It seems there are many such guys already in the country.  Also, it seems Afghan nationals too have been using fake certificates to enter the job market. He also added that brokers charged anything from Rs. 5,000 to Rs. 10,000 for a one-day service.

The latter was confirmed by a lawyer at Patiala Courts. There are thousands of Afghans studying in India, and it seems their government does not accept any education certificate from India unless it is attested by by MEA and the Ministry of Human Resources Development (MHRD)! 

No wonder the brokers at Patiala Courts are laughing all the way to the bank.

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REFERENCES & LINKS



* Afghan Embassy - Visa Rules - http://newdelhi.mfa.af/consular-services-4/visa/visa-information-indians/working-entry-visa-wev

* MEA, India - Procedure for Attestation of Education Degrees - https://www.mea.gov.in/apostille.htm

Apostille Convention - https://en.wikipedia.org/wiki/Apostille_Convention

Tuesday, May 22, 2018

India's External Debt


According to a recent issue of the Economist, India's financial health is in trouble. 

Rising international oil prices and a decline in exports is straining on our forex reserves, and on the other hand, a large chunk of the country's external borrowings (USD 500 billion now), is due for repayment in a few months. 

Having administered Yen Loan projects a few years ago and seen first hand the frantic to and fro that goes on between external lenders and India's Department of Economic Affairs (DEA), Ministry of Finance, any article or report that sets such borrowings in a larger context was bound to get my ready attention. This one was no diferent.

How accurate was the TE analysis? Which are the external borrowings due for repayment. and what are our options at a time when Donald Trump is churning up the Middle East?

I looked at two sources for getting a better understanding. The first was the latest available DEA Status Report (Sep., 2017) on External Debt, and then QEDS - the Quarterly External Debt Statistics collated by WB & IMF. 

While the the DEA report placed overall external debt at $ 472 billion, the QEDS, which has data from 2017-Q4, puts it at $ 513 billion. So TEs $500b was a fairly good indicative figure.

Here are some other points that emerged from the DEA report, across various parameters:

  • Duration: long term debt was 81% while short-term ones were mostly trade related credits;
  • Types: commercial borrowings (36%), NRI deposits (25%), government sovereign external debt (SED) was $95 billion  (20%);
Source: DEA report

  • Currency composition: US dollar (52%), Indian rupee (33%), SDR (5.8%), Japanese yen (4.6%) and Euro (2.9%); 
  • Concessional debt was just 9.3% of the total - mostly from SED;
  • Debt Servicing: Gross debt service payments  was $ 43.3 billion during 2016-17, a decrease of 2.2 per cent over the previous year;
  • India’s debt service payments are dominated by the External Commercial Borrowings (ECBs) which accounted for 75.1% of gross debt service payments during 2016-17;
  • Interest rates: External assistance (1.4%), NRI Deposits (4.4%) and ECBs (4.7%) -- overall "implicit" interest rate on total external debt - 2.8%;
  • Sovereign External Debt (SED) - $95b in March 2017
  • Debt from multilateral sources - 73% (external assistance) - $44b in absolute terms, of which:
    • Multilateral: IDA ($23b), IBRD ($9b), ADB ($10b), IFAD ($0.3b)
    • Bilateral: Japan ($15b), Germany ($2b), USA ($0.1b), France ($0.4b), Russia ($0.9b)
So when it comes to external assistance by way of concessional loans, they added up to just $44b (9.3%) of the total debt of $471b. Out of this Japan contributes $15b which, at second position, is larger than what we get from ADB but significantly less than the soft-loans from the World Bank. In overall terms, Japanese Yen Loans make up 3% of India's external debt!

It also turns out that there is indeed going to be a sharp increase in loan repayments. However this process started a year ago. Projections on long-term debt service payments shows that repayments were $33 billion for 2017-18, and they are going to be $29 billion for 2018-19, and then declines progressively for the next 10 years.



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LINKS:

* DEA Status Report (Sep., 2017) - https://dea.gov.in/sites/default/files/External%20Debt%20%28English%29_0.pdf

* QEDS - Quarterly External Debt Statistics collated by WB & IMF - http://datatopics.worldbank.org/debt/qeds

* (22 Mar 18) Mint - https://www.livemint.com/Industry/4yerAga6HW5Z1KbvYdnRLO/UBS-sees-Indias-external-finances-at-risk-despite-high-rese.html

Comparison of gross external debt to GNI (source: DEA)

Japan provides the lions share of bilateral loans (3% of total debt)

Saturday, May 27, 2017

SMEs in India and Japan


Small businesses are often called the backbone of economies. Relatively low profile and unseen, they play a major role economic growth and prosperity, innovation and job-creation, in most countries.

Governments refer to these small businesses as Small and Medium Enterprises (SMEs). In most countries, they represent over 95% of all enterprises, and a significant chunk of national GDPs.

However, there are also significant differences in the way different countries view SMEs. Take, for instance, a comparison between India and Japan:


As we can see in this table, Japan sets the bar much higher for SMEs. A company with a capitalization of JPY 300 million (USD 4m) and up to 300 employees would qualify as an SME in Japan but would definitely be considered a "big" enterprise in India.

Also, in Japan, many SMEs occupy super-specialized niches that cater to a global market, while in India such companies are few and far in between. Some of these world class Japanese SMEs are:

  • K. Yairi - maker of hand-crafted guitars
  • Roland - manufacturer of electronic musical instruments - synthesizers, electric pianos and drums
  • Shimano - Bicycle components, fishing tackles and rowing equipment
  • Tamiya - Plastic model kits, educational
  • Molten - Sports equipment
  • Olfa - Cutting tool, DIY stuff
Many of these companies are over 70 years old, and have evolved through tough competition in the domestic market. High expectations in terms of quality and price from the customers at home helped them carve a niche for themselves in the global markets as well. Perhaps this is one of the key factors that has, so far, prevented Indian SMEs from creating world class products.

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LINKS 


* Indian Ministry for Micro, Small and Medium Enterprises (MSMEs) - http://msme.gov.in/


- 23 million SMEs - provide 75 million jobs (two out of every three private sector jobs)
- They represent 99% of all enterprises
- less than 250 employees and less than €50 million annual turnover (or €43 million annual balance sheet).

- 98 percent of all identified U.S. exporters -- supporting nearly 4 m jobs through both direct and indirect exports









Thursday, May 18, 2017

GST in India: For Better or Worse?


Apple has started manufacturing iPhones in India. According to a WSJ report, the the iPhone SE series is being produced by Wistron, near Bangalore. Since the locally manufactured or assembled products will not attract import duties, it seems the prices are going to about USD 100 lower than imported phones.

Import duties and taxes make a big difference to a companys' fortunes. India's tax system is often cited as one of the top reasons why global manufacturers prefer to stay away from India. For instance, JCCII, a body representing Japanese corporate's, puts out every year "Suggestions to the Government of India". These suggestion have remained more or less unchanged for many years, and it is always complaints about the tax system that tops the lists.

In the latest 2016 list too, JCCII's tax-related suggestions include -
  • Removal of Permanent Establishment (PE) taxation
  • Easing of Transfer Pricing assessments by classifying Japanese Trading Companies (Sogo Sosha), not as traders but as Service Providers
  • Exemption from Minimum Alternate Tax (MAT) in the SEZs
  • Exemption from Dividend Distribution Tax (DDT) paid to foreign shareholders
  • Exemption of Service Tax on exports from India
In other words, the Japanese companies are saying, "If you don't let us take our profits home, we will not be able to invest more in India". In the official cover note JCCII also says, "While we await...the all-important GST bill, our concerns on the Tax system...remain."

So is the GST going to really improve our tax system and east of doing business? Much of what I have read so far has been gung-ho about GST, and about how it is going bind the whole country into one large happy market for goods and services.

An interesting contrarian view is held by Aravind Datar, who is quite convinced that GST, in its present form, is only going to worsen the ease-of-doing-business scenario in India. Here is the video -



The critical points are -

* More Laws, More Confusion: As of today, 29 states in India have their own VAT / Sales Tax laws, and separate laws for Service Tax and Excise Duty (total 32 laws). When GST is adopted by all the states we will have 29 StateGSTs (SGSTs), one Central Service Tax (CST) and one Inter-State GST (IGST). In all, 31 laws instead of 32.

* Lack of Checks and Balances: The GST Council can make only recommendations, which cannot be enforced. The state governments are free to make GST laws as they please (as per the 101 Amendment, Article 246A, and the Supreme Court judgement of 11 Dec., 2016)

* Cumbersome Reporting Requirements: Service providers currently file their returns twice a year. Now they will have to file 49 returns every year! (3 returns per month online - 10, 15, 30th + 12 TDS returns + 1 annual returns = 49)

* Discouraging Economies of Scale: Any company earning more than INR 2 million will have to file returns. So this will only encourage those who want to stay below that threshold, as in the old "License Permit Raj" days.

* Enormous potential for tax evasion, and tax-related harassment: Unlike other countries which have one single GST rate (eg. Singapore - 7%), we are going to have slabs - 0%, 5%, 10%, 28%. This encourages ambiguity, and the discretionary powers of tax officers.

* More Ambiguity, Not Less: Lack of clarity on General Anti Avoidance Rules (GAAR) and Place of Effective Management (POEM) is sure to discourage manufacturers and FDI investors.

Datar is a great communicator and his speeches, articles and arguments are quite convincing. Is there anybody in the establishment who has come up with a point-wise rebuttal of the concerns raised by him?

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LINKS:

* (2017) WSJ - https://www.wsj.com/articles/apple-assembles-first-iphones-in-india-1495016276

* JCCII's Suggestions to GoI (2016) - http://www.jccii.in/Docs/0333_2016_suggestions_jccii_summary_english.pdf

* Aravind Datar on GST - https://www.youtube.com/watch?v=xGmJyxugA2E

* (2015) Aravind Datar, IE - GST's Seven Deadly Defects - http://indianexpress.com/article/opinion/columns/gsts-seven-deadly-defects/

Tuesday, March 28, 2017

Climbing Mt. Fuji



Every now and then nostalgia bumps into wobbly memory cells, leaving you a bit tongue-tied. This happened to me last week when a friend, an ultra-marathoner,  suddenly asked me -  "I want to climb Mt. Fuji - do you know anybody who can arrange it in the off-season this year?"

While trying hard to remember details of my trip in 2009, I just said, "It all depends on when you are planning to climb..."

For a moment, I could not recall the dates when I climbed that iconic mountain. Nor could I remember the route I took, or the total expense for that trip. Instead, the memories that floated up immediately were -  the taste of the most delicious hot curry rice I'd ever had, at a quaint wooden inn high above the clouds; of the long lines of climbers trudging uphill in pitch darkness at 3:00AM; the cold wind and rains, and of a spectacular sunrise we saw, perched precariously on steep, dark slopes dotted with large chunks of pale, white ice.

Memories of the trek had receded to the bye lanes of my mind. It did pop up occasionally whenever I came across a painting, a photograph, or even an emoji that featured Mt. Fuji. A fleeting thought would then cross my mind - "I have actually been to the top of that mountain!"  A sense of awe and wonder that was, perhaps, bigger than the actual experience.

I had to go back to the notes written six years ago, to be reminded that I owed the trip to a gentleman named Sakata Yoshinori, and to an organisation named JISEDAI. In July 2009, I had responded to a notice that came up at Tsukuba University. I was the only one who registered, so  Sakata-san had traveled all the way from Tokyo, just to brief a single guy.

When we met at the Tsukuba TX station, he was standing next to the ticket counter, soaked in sweat. At a Starbucks table nearby, he had carefully handed me his visiting card, and then spread out his laptop, plugged in a thumb-drive, to explain how I should prepare for the trek.

"It would be a nine-member team this year", he had said "All the others were university students from Tokyo". He explained the itinerary, detailed the expenses (~JPY 20,000 which included bus-rides, boarding, meals), and pointed out the precautions to be taken and then offered to help me find the right equipment for the trip. I definitely needed a 35L backpack, a pair of waterproof trousers and, if possible, ankle-length hiking shoes.

Mr. Sakata even insisted to helping me get the right equipment and took me to a few shops at Tsukuba Centre. Apart from being amazed at his helpfulness, I remember thinking that his well-meaning advise bordered on being fussy and over-cautious. Having done some trekking in the Western Himalaya's, climbing a gentle-looking 3776m peak did not seem like a big deal. And then there was the cost of buying all the new gear...It is only later that I realized that Mt. Fuji was different, and that each item was necessary.

Eight of the nine-member team turned up. We all met outside the Shinjiku station and discovered that an interesting mix of people -- Yeo, a dude from Singapore; Melissa, a budding dentist from Indonesia, along with her two batchmates Pat and Thuy; A South American named German (pronounced Herman), and two other experienced Japanese trekkers - Chiaki and Hiroki.

We all took a bus from Tokyo to the Gotenba (2 hours), and then a local bus to a large facility called Fujinosato, an 'education facility' right next to the JSDF Takigahara camp. It was a sprawling campus with scores of tatami-matted dormitories, forest trails, an archery complex, camping sitesi in the woods, and even a spacious Onsen (hot-spring bath). School children, baseball teams, and various other groups in assorted uniforms milled about the place, waiting for their turn to climb uphill.




Our turn was early next day morning. After breakfast we walked to the base of the 7.8 km Subashiri Trail, downed a few cups of green-tea, and started trekking on  pathway that cuth through the thick forests.



At this point the ground was gently undulating - pathways that cut through the deep, dark volcanic soil and lush vegetation. As we climbed to 6th Station (2400m), and the 7th Station (3000m), forests gave way to sparse scrub vegetation dotting the slopes, and then none at all beyond the Old 7th Station (3200m). We rested for a while at this point at the Miharashikan Hut.  By this time it was cold and windy outside, and, at a time like this, what could be more welcome than a plate of hot curry rice? :)

Shadow of Mt. Fuji on the Clouds (Old 7th Station)

Early next morning, we padded ourselves with warm clothing, fitted head-lamps and walked out into the pitch darkness, to join a steady stream of climbers going uphill. It was between the 8.5th Station - 3450m (Goraikokan Hut), and 9th Station that we noticed that we were far above the clouds. This was also the meeting point of the Yoshida Trail (Yamanishi Prefecture) and, suddenly, it felt like we were all commuters at the Shinjiku Station!

Torches and lights were switched off as everybody settled down on the steep slopes, sitting down wherever they could find some space. As the clouds gradually gathered light, we all seemed to be sitting in a massive amphitheater, waiting for the drama of the rising sun to unfold...and what a sight it was!



Within seconds of the sunrise, a blanket of clouds rolled out reducing visibility to a few meters, and drenching us all in icy rain. We continued moving up at a snail's pace now, a part of a long line of colorful raincoats slowly bobbing to the summit. The last few hundred meters were rather steep and the ropes helped. Finally, when we reached the top, got past the crowds and eateries and looked down the caldera, it seemed so... ordinary.

After offering prayers are the Kusushi Shrine we started our descent. It was a lot faster than I expected because we were just wading down ash-laden slopes. Often our legs would just dig in, right up to our knees with each step.
Wading down the ash-slopes
This is where you realise that Mt. Fuji was quite different from other non-volcanic mountains. The weather was fickle, and the terrain even more so. Each and every item listed by Sakata-san turned out to be essential - the layered clothing, raincoats, and ankle-length boots. Our friend from Singapore made the mistake of coming in shorts and sneakers, and paid the price for it. He had been shivering from the 7th Station, and now, with the ash filling up his sneakers, he was feeling quite miserable all the way down.

In a couple of hours we were down at the Subashiri base station, and then on to the comforts of Fujinosato. After a soak in the steaming Onsen, a hot meal and a nap in the bus back to Tokyo, none of us doubted that Mt. Fuji looked a lot prettier from a distance!

For friends who are trying to climb Mt. Fuji during the off season, my suggestion is simple -- please don't. During the off season, all huts, toilets and first aid stations are closed and most of signs on the trails are removed. Unless, of course, you are part of JSDF, a scientific team or a team with special permission, your are quite unlikely to get beyond the 5th Station.

The climb is not difficult, but given the way the weather changes suddenly, the chances of getting lost in the forests, rain or in the cloud-covered slopes, is quite high, unless, of course, you are travelling with experienced climbers, and following a long line of colorful raincoats all the way to the top!

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LINKS

Official Website for Mt. Fuji Climbers - http://www.fujisan-climb.jp/en/season/
  • Climbing season: Early July to Mid-September
Subashiri Trail - http://www.fujiyama-navi.jp/fujitozan/route/page/subashiri/lang/en/

For info on other trails - http://www.huffingtonpost.com/gail-nakada/how-to-climb-mt-fuji_b_3693642.html

Thursday, March 02, 2017

Indian Infra: Untold Stories, Lost Lessons




I always do a double-take whenever I spot an article or new item on the Delhi-Mumbai Dedicated Freight Corridor (DFC).  Call it nostalgia, or just plain curiosity that comes from close association a few years ago.

I was working with JICA in the 2000s when this project was conceived, and when the proposal passed through the labyrinth of North Block before being taken up by the Japanese government. As a part of the numerous surveys and site visits that resulted in the master-plan, I worked with various consultants and traveled extensively - especially in Maharashtra and Gujarat.

One thing that had always puzzled me was the insistence from Indian Railways that the dedicated freight line be "double stack" and "electrical traction". This meant that the engineers and planners had to work on Star Trek mode - to 'go where no man had gone before'. Such a combination had never been implemented successfully anywhere. Getting the electrified pantographs over and above the height of double-stacked containers, and then to get these trains to run reasonably fast across the baked scrublands of Rajasthan, seemed particularly difficult.

Another clear challenge was to get the freight lines through the super densely populated areas of Mumbai, to the JNPT Port.

After 2009, I had lost touch with this project since not much was coming into the public domain by way of news. I did read that the Japanese had - very strategically - limited their ODA involvement to the Western Corridor, and that too from Rewari to Vadodara, instead of going all the way till Mumbai. The Eastern Corridor was subsequently taken up by the World Bank.

Cut to 27 Feb., 2017, to a symposium organised the Centre for Policy Research (CPR) and the Embassy of Japan on "Quality Infrastructure: Japanese Investment in India". At this event, I was quite surprised to hear Mr. Amitabh Kant (now CEO, NITI Aayog) say that five new cities would be commissioned by 2018, along the DFC.



Was this my own Rip Van Winkle moment? What had I missed? Was the Industrial Corridor coming up faster than the freight corridor that supported it? How was this great development being ignored by our hyperactive media?

A subsequent presentation confirmed a long-held opinion that the focus of the Indian media remains firmly on negative reporting. Good news is no news.

Mr. Anil Kumar Dutta (MD, DFC 2014-15) spoke of the close coordination with state government that had resulted in smooth transfer of land to DFC. He talked of 'bombshells' that had been defused during his tenure. One had come from the environment ministry (MoEF) demanding that the route alignment be shifted 140km to save the Balaram Ambaji Wildlife Sanctuary on the Gujarat-Rajasthan border. Another one from the Archaeological Survey of India (ASI) that had objected to the use of a piece of land in the Rewari for the main rail-yard because it had traces of a Harappan settlement dating back to 3000+ years.

Contrary to popular notions about both MoEF and ASI, Mr. Dutta declared that they were "most cooperative...all you must do is to listen - and take action - on their concerns!"

In the case of the suspected Harappan settlement, the discussions had yielded a time-bound, pragmatic solution. DFC hired the services of IIT Kanpur and had the whole rail-yard zone scanned with special ground penetrating radars. A small portion was found to contain ancient remains and  ASI had agreed to go as deep as required to extract all the material it needed. Once this was done, all the clearances were promptly given.

This symposium had quite a number of takeaways. Clearly, we seem to be hiring the right people for the right jobs and they seem to be doing great work, far away from the glare of the Indian media.

Unfortunately, it is also clear that we continue to be pathetic when it comes to documenting lessons learnt from mega projects like the Dedicated Freight Corridor. Great lessons learnt by JICA, DFC and DFCCIL remain locked in project reports, and in the minds of the pragmatic people who cut the proverbial Gordian knot, and then moved on nonchalantly to the next task at hand, or just faded into retirement.

If the lessons we learn are not shared in the public domain, the task of pioneers in other sectors are bound to become so much more difficult.

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LINKS & REFERENCES

* DFCCIL - http://dfccil.gov.in/dfccil_app/Home
* Axis Capital PPT (Jan., 2016) - http://www.indianrailways.gov.in/Railways%20report%20-%208%20Jan%202016.pdf
* Balaram Ambaji Wildlife Sanctuary - https://forests.gujarat.gov.in/balaram-sanctuary.htm
* (2012) - http://www.financialexpress.com/archive/environmental-issues-may-delay-rail-freight-corridors/1030135/
* (2013) - DFCCIL PPT by R.K. Gupta -- http://www.i-cema.in/past_event/DFCC-Project-Status-Opportunities.pdf
* Nippon Koei India - http://www.nkindia.in/transportation.html

Sunday, February 19, 2017

DHL Express - Amazingly Slow



What is it that makes leading global logistics companies nervous about handling food consignments to Japan?

Over the past few weeks, I have been witness to an uncharacteristic display of tardiness from one of the big boys in logistics - DHL Express. Until now, my experience with this German company had been pretty good. Even though they charged a premium they have been able to deliver documents from Japan to India in three days' time. Food samples, however, seems to be an altogether different ball game.

Japan is one of the leading food importers in the world.  The country's total food self-sufficiency ratio based on calorie supply was just 39% in 2015. Based on production value, it was just 66%. So the country relies almost entirely on imports, not only for staples like wheat, barley, corn, and soy, but also a wide range of raw materials for its food processing industry.

Half of the meat products consumed in Japan is imported. According to a survey by the Japan Frozen Food Association of 31 member companies, 200,634 tons out of 315,436 tons of precooked frozen imported food in 2006 came from China. Farm ministry data show that of the roughly 778,000 tons of frozen vegetables imported that year, about 326,000 tons came from China and 285,000 tons from the U.S.

Despite these high volumes import regulations are strictly enforced. The key organisations involved are -

  • Ministry of Health, Labor an Welfare (MHLW) -- sets standards for chemicals in food -- monitors compliance
  • Ministry of Agriculture, Forestry, Fisheries (MAFF) -- Registers agricultural chemicals -- Approves and controls Veterinary drugs and their uses -- Set standards for feed. The key department here is the Dept of Food Safety under the Pharma and Food Safety Bureau of MAFF.
  • Food Safety Commission
  • Consumer Affairs Agency


Fronting all these ministries and agencies is the Japan Customs Office which keeps close watch on all the international airports and ports. Even before a food consignment is loaded on a ship or aircraft, a 24-hour advance notice is to be send to the customs office. This rule, referred to as the Japan Advance Filing Requirements (AFR/JP24) has been enforced since March 10, 2014. Under this, a 10-point checklist is to be submitted along with the Bill of Lading.

All these rules and regulations have been around for over three years. Despite this, what explains the repeated delays by DHL, in dispatching a consignment of food-samples to Japan?

Consider the case of a 5kg packet sent on 7 Feb., 2017, by an exporter of Moringa plant products (dried leaf, powder and seed oil) to Yokohama, Japan. The DHL office at Theni (TN) accepted the packet after confirming that all the necessary paperwork was in place. This included a signed declaration by the exporter, a Sanitary & Phytosanitary Certificate (SPS) from the authorized government agency at Tuticorin, and a Material Safety Data Sheet (MSDS).

The packet (waybill no. 7840177741) then moved to Bangalore, and stayed put for the the next three days. When asked the reason for the delay, DHL stated that it needed each page of the declaration to be signed by the exporter. Yet this requirement was not informed while the packet was being accepted, nor did DHL bother to inform the exporter from its Bangalore office. It was only when the customer contacted DHL that the response came up - "Oh, yes, by the way, we need some more paperwork!".

After a weeks' delay, a fresh Shipment Waybill (No. 7840177262) was raised with the signatures on all the pages. Then again the packet got stuck at the DHL warehouse in Bangalore. This time they came up with yet another requirement -- over and above the "non-hazardous" certificate given by the Indian government agency, DHL needed another self-declaration from the exporter stating that the seed-oil was non hazardous in transit the flight to Japan.

Today, nearly two weeks after the packet was handed over to DHL Express, the packet has finally reached Yokohama.

So the question that begs an answer is: Is it Japan's Customs Office that is making shipments from India difficult, or is it the DHL office in India simply incompetent when it comes to handling consignments to Japan?

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LINKS & REFERENCES

FAO requirements of Phytosanitary Certifications - http://www.fao.org/docrep/004/y3241e/y3241e06.htm

(2008) - The Tokyo Foundation -- the Perilous decline of Japan's agriculture -- http://www.tokyofoundation.org/en/articles/2008/the-perilous-decline-of-japanese-agriculture-1

Food Exports from India to Japan - Phytosanitary Requirements -- http://phytosanitarysolutions.com/japan/

Japan's Import dependency - http://www.businessinsider.com/japan-will-be-asias-superpower-in-2040-2017-2

Japan Customs website - http://www.customs.go.jp/english/summary/advance/

Procedures for Private Import Cargo - http://www.customs.go.jp/english/exp-imp/privatecargo/private.htm#courier

Tuesday, January 31, 2017

An Appetite for Steel




Recent newspaper headlines proclaimed that India is now poised to overtake Japan as the “second largest producer of steel in the world”. This sounds quite impressive - until you see the numbers in perspective. The largest producer of steel in the world - China - produces over 800 million metric tonnes (mmt) while India’s 'record production' was less the 90 mmt in 2015.

The current situation is like that of a huge kitchen that needs to keep itself busy. Excess production capacity is now at odds with low appetite. Over the past 40 years there has been a massive increase in global steel production - especially in China. A country that produced just 37 million metric tonnes (mmt) in 1980 produced more than 21 times that amount - 803 mmt in 2015!

Similarly, on a much more modest scale, India which had been producing 9.5 mmt in 1980 , increased its production to about 90 mmt in 2015.


China’s domestic appetite has been a bit satiated now, so now we are seeing a sharp increase in its steel exports. As with numerous other Chinese products its prices are super competitive, and this is triggering “anti-dumping” measures from other countries, including India. About two years ago, India’s DGFT set a Minimum Import Price (MIP) for 66 types of iron and steel products, while at the same time, imposed duties up to 20% on a number of steel products.

The main countries affected by these measures were China, South Korea and Japan, which accounted for 63.6% of total imported steel volume, and 54.6% in terms of value. As expected, Chinese imports are the largest at over 37%.

Yet, strangely, it is not China or South Korea, but Japan that is at the forefront of the campaign against the restrictions imposed by India. It has threatened to take India to WTO over the import restrictions, and various interpretations of the provisions of GATT 1994 and the Agreement on Safeguards.

What explains this unusual stance?

Some commentators claim that for Japan, India is  just the proxy country used to fight a larger war against MIPs and other border taxes. According to others, this is just a reflection of political clout wielded by steel exporters in Japan. Either way, one thing is clear - higher steel prices is not good news for downstream industries, or for the consumers who end up paying more for cars and cooking utensils.

Lobbies like the Indian Steel Association (ISA) and their counterparts in Japan will always try their best to influence governments for their own benefit. Ultimately, it is for the government to strike a balance between the long term costs and benefits of bowing to the pressure of industry lobbies. And that, unfortunately, is linked to election funding...

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LINKS & REFERENCES

https://www.investing.com/analysis/india-and-japan-take-their-steel-row-to-the-wto,-but-it%E2%80%99s-really-a-proxy-200173645

(26Jan17-BL) - http://www.thehindubusinessline.com/economy/policy/russia-says-steel-exports-to-india-dipped-by-a-third-due-to-curbs/article9503240.ece

(25Jan17, BT - India to be global no.2 steel producer by 2020) - http://www.businesstoday.in/current/corporate/india-closes-japan-second-largest-steel-producing-country/story/244963.html

Reuters (23Jan17) - http://www.reuters.com/article/us-japan-india-steel-idUSKBN1541DX

Forbes (23Jan17) - http://www.forbes.com/sites/timworstall/2017/01/23/japan-threatens-india-with-wto-action-over-steel-good-it-should-to-benefit-indians/#561e021a53ae

(22Jan17 - Taiwan) -- http://www.thehindubusinessline.com/economy/policy/taiwan-wto/article9496340.ece?ref=relatedNews

Hindu (22Jan17): JAPAN THREATENS TO DRAG INDIA TO WTO ON STEEL AS TRUMP ERA HERALDS TRADE TENSIONS

DGFT Notification on MIP (4Aug16) - http://dgft.gov.in/Exim/2000/NOT/NOT16/noti2016.pdf

(4Dec16, IE) - Indian Steel Association (ISA) for extension of MIP for 6 months - http://indianexpress.com/article/business/business-others/extend-mip-on-steel-products-for-six-months-indian-steel-authority-4409972/

(30Mar16 - VCCircle - Timeline on MIPs) - http://www.vccircle.com/news/engineering/2016/03/30/india-extends-safeguard-duty-steel-imports-till-march-2018l

COKE

* http://asia.nikkei.com/Business/Trends/Japanese-steelmakers-switching-to-lower-grade-raw-materials?page=2
- Japanese steelmakers (Nippon, Sumitomo) use better technology to lower costs. They process cheaper, low grade coke to better quality before replacing 50% of high-grade imported coke...this keeps their steel competitive in the world markets.

(2Dec2016) - http://www.infracircle.in/indias-coke-import-financial-year/
> India imported ~ 3 million tonnes of metallurgical coke in 2015-16 --- of which 2 million was from Chine alone!...Metallurgical coke, a key raw material for the steel sector, is used for smelting iron ore in the blast furnace. Around 0.7 tonne of coke is required to produce 1 tonne of steel and it constitutes 40-50% of the total cost of crude steel.
The government on 25 November imposed anti-dumping duty in the range of $16.29-$25.2 per tonne on imports of low ash metallurgical coke from countries such as China and Australia for a period of five years.

Thursday, January 12, 2017

Open Sesame



In an interview reported earlier this week, India's Minister for Commerce and Industry, Ms. Nirmala Sitharaman, requested Japan to take steps to increase Indian exports to Japan of sesame seeds, Surimi fish and generic drugs.

This was quite puzzling. Why were two specific items - "sesame seeds" and "Surimi fish" - mentioned in the same breath as Generic Drugs, which is a whole category in itself?

Perhaps it had something to do with the commercial value of the items being imported by Japan...

Sure enough, it turns out that Japan is one of the world’s largest importers of sesame seeds. It is mainly sourced from African countries. Nigeria is, by far, the biggest source, accounting for 28% all sesame seed imports valued at about JPY 11.4 billion (USD 96 million or INR 656 Crores in 2014). This means that Japan imports seeds worth about USD 343 million annually!

In recent years, India too has seen a sharp rise in sesame seed production. In 2014-15, over 0.43 million tonnes was produced, mainly in Gujarat and Uttar Pradesh. However India has not had much success in exporting the seeds to Japan. This is apparently because of high pesticide residue levels.

In other words, it is India that needs to take adequate steps to ensure that the sesame seeds it produces, is not only cost competitive, but also meets phytosanitary standards in the export markets.

The second item - Surimi fish - . I had heard of "Surmai" (Indo-Pacific Mackarel) but not this one.

It turns out that Surimi not a type of fish but something that Japan exports to other countries - especially USA. It is the term used for  "minced fish paste, made from a cheap fish in abundant supply, usually Alaskan pollock, frequently mixed with sugar and sorbitol, a sweetener. The paste is combined with other varieties of fish and fish flavorings, preservatives such as sodium tripolyphosphate and binders such as wheat flour or egg white, and then restructured and colored to look like higher- priced crab, scallops, shrimp or lobster." 

So, is this a case of a minister who was not properly briefed, or was it the IANS/Business Standard reporter who misquoted what has actually transpired?

Either way this is a fine example of the cross-talk, and communication gaps, not only within India, but also between the two countries.


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REFERENCES & LINKS

* BS (2017) - http://www.business-standard.com/article/news-ians/india-japan-fta-implementation-needs-to-be-expedited-sitharaman-117011000351_1.html

* Surimi exports from Japan to USA - http://www.nytimes.com/1984/07/25/garden/surimi-what-kind-of-seafood-is-it.html?pagewanted=all
* (BS, 2014) - Sesame production in India - http://www.business-standard.com/article/markets/india-s-sesame-seed-output-to-rise-by-126-shefexil-114110200688_1.html

* BS (2016) - http://www.business-standard.com/article/news-ians/sitharaman-urges-firms-to-exploit-free-trade-accord-with-japan-116100600675_1.html

* CEPA - RIS Report 2016

* Mint (2014) - http://www.livemint.com/Politics/Nv3BR8VYZ9zLJwwGeFAlWJ/EU-team-to-inspect-sesameseedprocessing-units.html

* SHEFEXIL - http://www.shellacepc.com/
-  About Sesame seeds - http://www.shellacepc.com/products/sesame-seeds/

* IARI - All India Network Project on Pesticide Residues - http://www.iari.res.in/?option=com_content&view=article&id=185&Itemid=531

Sunday, September 11, 2016

ShinMaywa US2 Seaplanes for India



This has been a long standing mystery: What is holding back the first major India-Japan defence hardware transaction - the sale of ShinMaywa US2 Maritime reconnaissance aircraft?

The US-2i is quite a unique aircraft, capable of short take-offs from land as well as water with a range of over 4,500 km. Powered by four big turbo-props, it can land even on rough seas amid three-metre high waves.

Perhaps this is just the sort of recce-aircraft that we needed while searching for the AN-32 that disappeared while flying from Chennai to Car Nicobar. The $1.65 billion defence deal was slated to be signed in the first quarter of 2016 with the first two aircraft delivered off-the-shelf and the remaining ten built under license in India.

The deal has been "under discussion" since 2012. Over the past four years there have been numerous speculative reports as to why an ostensible commitment at the highest levels of government, is yet to translate into action.

Today's Times of India states that Japanese defence ministry is trying to reduce the price-tag of the USD 1.6 billion for 12 aircraft in a bid to revive the deal. This is a new one. Until now none of the reports had claimed that the price was a sticking point.

Recently, India purchased six C-130J Super Hercules military transport aircraft for an estimated price of USD 1.2 billion. Even at the risk of comparing chalk and cheese, the price-tag for a a sophisticated amphibious aircraft does seem to be quite reasonable.

In fact the reasons for the delay stated so far have been:

Policy related -
  • Japanese side has been waiting for the amended Defence Procurement Policy-2016, which is yet to be available for the companies wanting to do defence business in India
  • Department of industrial policy and promotion is awaiting for Acceptance of Necessity (AON) from the Indian Navy
  • While Japan had been pitching for the sale of these aircraft as a special case, for the moment it did not figure on India’s list of priorities
Bureaucratic / Red Tape:
  • Deal delayed further as the next Defence Acquisition Council cannot take place, since there is no Chief of Integrated Staff (CISC) in place in the ministry of defence.
  • The major hurdle remains successfully navigating through the myriad of layers of bureaucratic red tape, something that Japanese defence contractors, given Japan’s self-imposed ban on exporting military hardware, have very little experience in doing.
The last reason sounds more plausible. Getting the bureaucracies in India and Japan to talk to each other must count among the most formidable challenges of today. Surely this is not merely a question of an inflated price-tag!

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UPDATES:

- (8 Nov., 2016) - Japan, India likely to ink pivotal US-2 aircraft deal - http://www.japantimes.co.jp/news/2016/11/06/national/japan-india-likely-ink-pivotal-us-2-aircraft-deal/#.WCFsZNV97IU
- “The sticking point then was India’s insistence that Japan relocate production to the ‘enth’ degree”

- ( 25 Oct., 2015) - INDIA, JAPAN RESOLVE PRICE ISSUE - Price concession of more than 10% brings down the cost of the US-2 planes from USD 133m to USD 113m per piece - https://inserbia.info/today/2016/10/india-japan-solve-aircraft-price-issue/

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LINKS & REFERENCES

* (11Sep16) - http://timesofindia.indiatimes.com/india/Japan-may-cut-price-to-ink-aircraft-deal-with-India/articleshow/54272792.cms

* (18May16) http://www.financialexpress.com/article/economy/indias-nod-to-buy-japanese-amphibian-plane-us-2i-to-face-further-delays/258215/

* (5May16) - http://thediplomat.com/2016/03/is-the-japan-india-military-aircraft-deal-dead/

* (28Feb16) - http://www.thehindu.com/news/national/japan-noncommittal-on-supply-of-strategic-amphibious-aircraft-to-india/article8290054.ece

* (12Dec15) - India-Japan Joints Statement 2025 - http://www.mea.gov.in/bilateral-documents.htm?dtl/26176/Joint_Statement_on_India_and_Japan_Vision_2025_Special_Strategic_and_Global_Partnership_Working_Together_for_Peace_and_Prosperity_of_the_IndoPacific_R


* (6Jan14) - http://www.thehindu.com/news/national/japans-amphibious-aircraft-not-a-priority-for-india-now/article5545706.ece.


* http://theweek.com/articles/575407/japans-defense-industry-super-excited-about-amphibious-plane
Japan and India have been discussing the sale of the amphibian since 2012. 
US-2's manufacter ShinMaywa traces its history back to one of the founders of Japanese aviation, Seibe Kawanishi. This Kobe-based industrialist made his fortune selling woolen blankets to the military during Japan's turn-of-the-century wars against Russia and China.
After the war, Nakajima's company became Fuji Heavy Industries — the parent company of Subaru, the automobile-maker.
 Kawanishi churned out 2,800 civilian and military aircraft between 1928 and 1945 — an average of 165 planes a year.
Building under license has always been Japan's favorite way to gain and maintain cutting-edge skills and technologies.