New Delhi: Japan is considering sanctions against an Indian firm for having business ties with Russia, people told ET. If imposed, this would be the first time by Tokyo against New Delhi after the 1998 Pokhran nuclear tests.
Japan is also threatening to sanction firms from China, UAE and Uzbekistan for conducting businesses with Russia by circumventing sanctions, the people said.
ET has learnt that no final decision has been taken yet by Japan to sanction the Indian firm and that the step is currently under consideration. The people did not name the Indian company.
Sanctions are being planned on organisations suspected of involvement in providing materials to Russia that could allegedly be converted for military use, according to Japanese sources.
According to people, if Japan goes ahead with sanctioning the Indian firm, it will cast a shadow on the thriving bilateral partnership due to the history of Japanese sanctions against India.
Last time, it took some deft diplomacy by India for the lifting of sanctions and the subsequent launch of an annual summit between the two nations.Currently, Japan is not only among India’s top investors but also a key strategic partner for New Delhi in the Indo-Pacific region. Sanctions may create mistrust and dent confidence in ties, sources cautioned.After the 1998 nuclear tests, Japan not only issued strong statements against India, but also imposed economic sanctions. At the time, the statement issued by Japan read, “It is extremely regrettable that India conducted two more nuclear tests on May 13, 1998. Taking this situation very seriously, the Government of Japan has reiterated its strong demand to India that nuclear testing and development of nuclear weapons be stopped.”
Later at the UN Disarmament Conference held on May 15, 1998, a Japanese official stated, “Words were not sufficient to express the shock of the Japanese Government and people over India’s nuclear tests. It was said that the explosions completed a series of tests, but the damage they caused and their ultimate effects on the goals of international disarmament were immeasurable.”
Subsequently, Japanese financial aid to India for new projects was frozen except for emergency and humanitarian aid, and grant assistance for grassroots projects; yen-loan to India for new projects were frozen as well. The Japanese government also turned cautious over loans to India by multinational development banks and international financial institutions. Tokyo lifted the sanctions in 2001.
