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India-Japan Relations

India Japan relations UPSC

Introduction

“India and Japan are of the view that our development should be linked with our happiness. This development should be all-round, should be for all, and should be all-encompassing,” said the Indian Prime Minister Narendra Modi as he inaugurated the International Cooperation and Convention Centre constructed with Japanese assistance on 16 July 2021. Prime Minister further went on to call Japan a “param-mitr” or “friend forever” as this opportunity was used to reaffirm India’s commitment to Japan.

These views of India were again reiterated by External Affairs Minister Jaishankar on July 2023, when he said, “I would say for us, the challenge is that we work every day in every possible way to strengthen our cooperation, whether it’s in economics, supply chains, digital domain or critical technologies and also in maritime security.”

History of Indo-Japan Ties

The signing of Japan’s Peace Treaty with India in 1952 signaled the beginning of diplomatic relations between the two countries. India later helped with Japan’s entry into international and regional mainstream politics by inviting the country to the first Asian Games in New Delhi and also the Afro-Asian Conference in Bandung in 1955. India also supplied important minerals such as iron ore as Japan was rebuilding its economy after the devastation of the Second World War.

The relationship was a very stable one until the Cold War. When India preferred non-alignment while Japan aligned with the Western bloc. The gradual tilting of India to the USSR meant that India’s relationship with the allies of the US deteriorated. The relationship deteriorated further during the Sino-Indian War of 1962 and the India-Pakistan conflicts as Japan always took a neutral stance.

Further, due to the slow growth rate of India, Japan never prioritized India for economic engagements like it did with East and Southeast Asian nations. India also considered Japan as an ardent follower of the US. The relationship between the two countries hit an all-time low after India’s nuclear testing at Pokhran in 1998. Japan condemned both the nuclear testing by Pakistan and India strongly and said those were a major challenge to international efforts in making the world a nuclear-free one. Japan also played a major part in the passing of resolution by UN Security Council calling for India and Pakistan to halt their nuclear weapon activity and also join NPT.

Although India and Japan started off with such an estrangement, the relations improved as western world slowly came in terms with the fact that India being a nuclear power. In fact, 2007 was celebrated as the Year of Friendship between India and Japan.

Even though, many have the opinion that the economic part of the relationship remains far below the potential and Japanese investment in India is lesser than its investment in much smaller countries like Vietnam, both countries have witnessed positive relationship trends in all aspects. Further, the rise of China in the region has made both countries look at each other as valuable partners.

India-Japan in 21st Century

Since the 2008 financial crisis, global power politics have been gradually witnessing a shift from the Atlantic to the Pacific, especially with the rise of China, India, Japan and the resultant US interest in the region. It is in this context that the bilateral relationship between two of the largest economies in Asia excluding China – India and Japan comes into focus. The visit of Japanese Prime Minister Yoshiro Mori to India in 2000 signalled a new era in India-Japan ties. Japan even went on to use the term ‘global partnership’ for its relationship with India, a term which they had only used for US earlier.

India and Japan had varying reasons for the sudden shift post-2000. Japan being a country still under US nuclear umbrella, was worried of its diminishing presence in the region. Japan wanted a player to balance out China’s rise in the region and post-Cold War India also jumped into the bandwagon with its Look East Policy, which would be later updated to ‘Engage’ and ‘Act’ East. China’s actions altering the geopolitical landscape of East Asia and South Asia have given further reasons for both countries to be strong together. The visit of Emperor Akihito and Empress Michiko to India in December 2013 followed by Prime Minister Abe’s just two months later signalled a strengthening relationship in the second decade of the 21st century. Abe was also the Chief Guest at the Republic Day parade in January 2014. It was Abe, who later proposed an update to the existing trilateral security framework with India joining it and making it a quadrilateral one (QUAD). In such a complex political climate, it can be said that Abe was definitely looking at India as back up.

Late prime minister Abe’s another vision including India as an anchor was the ‘Confluence of Two Seas’. Under this he aimed at linking the Pacific along with the Indian ocean paving way to what he called a ‘Free and Open Indo-Pacific’. Under his vision, India and Japan also started working together in various developing and under developed countries. This cooperation began with them announcing the setting up of an LNG terminal in Sri Lanka. India and Japan are partnering on two projects in Bangladesh, that is the Ramgarh-Baraiyarhat Highway and the Jamuna Railway Bridge. The Ramgarh-Baraiyarhat Highway is done with the help of Indian Line of Credit and loans from Japan while the Jamuna Railway Bridge is done by loans from Japan and construction is undertaken by an Indian company. They have also signed a trilateral agreement with Myanmar to construct 15 schools in Rakhine State. They have also initiated the Asia Africa Growth Corridor (AAGC) Programme. The programme which was built on India-Japan collaboration had made its goals public in the Asian Development Bank gathering in 2017.

India-Japan Trade Relations

Indo Japan Trade in US$ bn.

Year2017-182018-192019-202020-212021-222022-23
India’s export to Japan4.734.864.524.436.185.46
India’s import from Japan10.9712.7712.4310.914.3916.49
Total Bilateral Trade15.7117.6316.9515.3320.5721.96
Trade Deficit6.247.917.916.478.2111.03

Major Items of Export (US$ mn)

S.No.Commodity2021-222022-23
1Organic Chemicals696.05734.18
2Fish And Crustaceans, Molluscs And Other Aquatic Invertabrates.433.24443.76
3Nuclear Reactors, Boilers, Machinery And Mechanical Appliances; Parts Thereof.478.85430.77
4Vehicles Other Than Railway Or Tramway Rolling Stock, And Parts And Accessories Thereof.328.71405.14
5Natural Or Cultured Pearls,Precious Or Semiprecious Stones,Pre.Metals,Clad With Pre.Metal And Artcls Thereof;Imit.Jewlry;Coin.394.43351.29

Major Items of Import (US$ mn)

S.No.Commodity2021-222022-23
1Nuclear Reactors, Boilers, Machinery And Mechanical Appliances; Parts Thereof.2,702.622,864.64
2Inorganic Chemicals; Organic Or Inorganic Compounds Of Precious Metals, Of Rare-Earth Metals, Or Radi. Elem. Or Of Isotopes.1,660.502,152.34
3Electrical Machinery And Equipment And Parts Thereof; Sound Recorders And Reproducers, Television Image And Sound Recorders And Reproducers,And Parts.1,317.651,739.59
4Iron And Steel1,011.551,390.06
5Copper And Articles Thereof.1,193.581284.05

Japan is regarded as a key partner in India’s economic transformation. India and Japan signed the Comprehensive Economic Partnership Agreement in August 2011, in which they came to an agreement to remove almost 94% tariff for the next 10 years in an effort to improve bilateral trade. With this agreement, Abe had aimed at the potential of India as a marketing hub for Japanese companies.

Japan currently ranks third in terms of investment in India. The major portion of this investment comes in the form of automobile, electrical equipment, telecommunications, chemical, financial and pharmaceutical sectors. India’s limitations regarding budget for infrastructure has complemented long gestation projects by Japan. The investments from Japan are mainly for projects that is next next-generation infrastructure, clean energy, transport system, connectivity etc.

Likewise, the number of Indian companies working in Japan have reached 100. ODA (Official Development Assistance – government aid designed to promote the economic development and welfare of developing countries.) by Japan have been instrumental in assisting India’s development in sectors like power, transportation and environmental projects. It has assisted in construction of big projects like the Mumbai-Ahmedabad High Speed Rail, the Western Dedicated Freight Corridor (DFC), the Delhi-Mumbai Industrial Corridor with twelve industrial townships, the Chennai-Bengaluru Industrial Corridor (CBIC).

Despite good Indo Japan trade relations, India’s exports to Japan is still below two percentage of its overall global export and India’s FDI in Japan is almost negligible. India have also been running a trade deficit with Japan for years, with current trade deficit figuring around US$ 11bn in FY23.

Further, India have only occupied more than three percent of Japan’s import basket in just three product categories, that is organic chemicals, natural or cultured pearls, fish and other aquatic invertebrates. Such a trade deficit had encouraged India to review the Comprehensive Economic Partnership Agreement in August 2011 with both South Korea and Japan. In October 2020, India and Japan also decided upon a cyber security agreement that focuses on 5G technology.

India-Japan Security Ties

The India-Japan Defense and Security Partnership which was signed on October,2008 has now evolved and grown stronger due to the convergence of various interests. India was only the third country after US and Australia that Japan signed a security pact with. Later, the pact was updated in 2009 with an action plan that included annual strategic meetings of foreign ministers, annual 2+2 meetings and naval exercises.

The year 2010 saw both the countries exchange schedules of escort operations by the Indian Navy and Japan Self-Defence Forces in the Gulf of Aden and also the first round of 2+2 India+Japan interaction. As maritime security is important to both the countries considering their interest in the Persian Gulf, the countries have realised that continuous efforts are required to secure sea-lanes of communication(SLOC).

As Japan’s 90 percentage of oil requirements come from the Persian Gulf region, and India being the largest actor in the Indian ocean, makes them natural partners. India’s geographic position endows it with a great opportunity to play an important role in ensuring global maritime security. India is distinctively situated between two most critical choke points for global oil supplies – the Strait of Malacca to its east and the Strait of Hormuz to its west. For Japan, the Strait of Malacca is the main passage between the Indian Ocean and the South China Sea. The first Japan-India Maritime Bilateral exercise named JIMEX-12 was held by the Indian Navy with Japanese Maritime Self Defence Force in June 2012.

Japan’s “National Defence Program Guidelines for FY 2014 and Beyond” stated that, “Japan will strengthen its relationship with India in a broad range of fields, including maritime security.” Further, Modi and Abe met in 2014 and proclaimed “attached importance to the regularization of bilateral maritime exercises as well as to Japan’s continued participation in India-US Malabar series of exercises”.

The very fact that Japan went to the extent of reinterpreting the Article 9 of its Constitution reflected the changing times and its worries regarding China. Even hardcore Japanese nationalists support the relationship with India. The nationalists who are very interested in advocating a assertive, militant Japan wholly agree on China being their main threat. Also even though they consider the dependence on US for security as humiliating considering the historical baggage, they are not against a relationship with US on equal terms.

For the Japanese, doing business with India is easier as there is no historical baggage and it is easier to do it on equal terms. As India is a giant in the region and faces similar territorial disputes with China, they consider that the risk of India abandoning Japan is less compared to US doing it. Also, its good for the bilateral relationship that Japan is one of the major manufacturer of high end military technology. India’s need for this is very high and Japan easing a self imposed ban on exporting military weapons in 2014 has certainly brought new forums for cooperation between the two countries.

Conclusion

The ADB estimates that by 2050, Asia would more than double its share of global GDP to 52%. By then, half of the world’s top twenty economies will be in the Indo-Pacific and the trio of China, Japan and India are by then expected to be among the top five economies of the world. It is only logical that India and Japan will continue to work together especially considering the current power transition in the Asian continent. The diminishing of US footprint, and the rise of China have made both countries look at each other as reliable partners.

While decades of diplomacy have lead to the much celebrated Special Strategic and Global partnership, the relationship needs boost in terms of economical investment. While China looms large over this bilateral relationship, Japan’s relationship with India will help it deepen its US ties and its the same case with India. Yet, there are also fear in the US camp that they would be entrapped into another conflict with their largest trading partner, that is China due to their obligations with Japan. If this is true, then Japan has much to gain from its strategic ties with India.

On the other hand, a stable security relationship with Japan also increases India’s goal of a multipolar region. Comparatively, an isolated India would be more weaker in front of China. Both India and Japan should collaborate more like they have did in Myanmar and Bangladesh to promote their regional aspirations and make full use of their converging Act East Policy and Free Indo-Pacific Trade respectively. Making inroads into neighbouring countries along the Indo-Pacific is necessary to keep China’s influence under check.

Even though, India – Japan bilateral strategic ties are getting stronger, it can be said that the trade between them have not been up to its potential.

The overall trade has increased,yet, India’s exports to Japan is still below two percentage of its overall global export and India’s FDI in Japan is almost negligible.

India have also been running a trade deficit with Japan for years. It has only worsened from US$ 7.9 billion in 2019 to US$ 11bn in 2023 . As discussed earlier, India have only occupied more than three percent of Japan’s import basket in just three product categories, that is organic chemicals, natural or cultured pearls, fish and other aquatic invertebrates.

In other categories India is yet to make significant inroads, with categories like mineral fuels, oils showing immense potential. India must try to decrease the deficit so that the partnership continues as it is and this should be done by catering to Japan’s requirements. India must focus on the industries they are strong in and also make inroads into new industries to reduce this trade deficit. For two nations with varied interests and strengths, this is necessary. With their joint ventures like AAGC and many other works in third world countries, it is obvious that this partnership is being fruitful for both the sides. However, India and Japan still have a long road ahead of them in terms for achieving their regional aspirations and economic goals. As iterated by late Japanese prime minister Shinzo Abe, “Strong India is in the best interest of Japan and strong Japan is in the best interest of India.” It is crucial for both the countries to work together, for their own interests as well as interest of the Indo Pacific.

Scholar’s Commentary

Rohan Mukherjee.

The academic assessments are far more ambitious that the actual state of affairs. We can say that India Japan relations is ‘marriage of convenience’. There is no military alliance., even together they cannot balance China, and alhough there is a lot of talk of rule of law, yet neither alone nor together they are in position to enforce it.

However we also cannot ignore the pragmatism in the relationship. There is a implicit bargain in the relation.

David Malone

In his book, Does the Elephant Dance?, David Malone suggests that Indo Japan relations remained tepid in reality. He argues that the main driving force of India Japan relations so far has been strategic, rather than economic. There is a need to balance economic pillar. There is a huge disappointment in Japan towards India’s economic policies. India and Japan have entered into comprehensive economic partnership agreement in 2011, still it has not resulted into any significant increase in the bilateral trade. The India Japan trade is insignificant compared to Sino-Japanese or Sino-India trade.

Kanti Vajpayee

In his article, India Japan Strategic Partnership for 21st Century, Kanti Vajpayee suggests that contrary to official pronouncements, India and Japan have never been too close.

The rise of China certainly makes a case for countries to come close together, however, as of now soft balancing is best option for both. There is no point taking the risk of confrontation at this stage.

S Jaishankar

“India Japan are natural partners”.

“I would say today whether it is the future of the international order, whether it is strategy, whether it is economics, whether it’s technology, whether it is culture, or indeed whether it’s history or geography, I think we, India and Japan, have a lot going for each other.”

“As India is growing in its capacities, the relationship has to be far more collaborative than before… and we will have to keep changing with times if we are to keep expanding the relationship.”

“By strengthening peace, stability and security in the region, India and Japan could ensure that many of the worst fears would not be realised.”

“A free, open and inclusive Indo-Pacific is at the core of our Special Strategic and Global Partnership.” (Commenting on Indo Japan Relations)

“A strong partnership with Japan, built upon our shared democratic values and respect for rule of law, is the centerpiece of our vision of Indo Pacific.”

Other Scholars

In his article, The Case for Alliance, C Rajamohan arguest that there is a strong case for India Japan alliance. India as well as Japan need to ensure against wide oscillations in USA’s policy. As China’s neighbour, they have stakes in cooperative relations with China as well as to temper China’s unilateralism.

Rajuesh Basrur, on the other hand in his article Why No to Alliance and Yes to Strategic Partnerships suggests that alliance is a characteristics of cold war era. In present age of interdependence, it does not fit. Strategic partnership allows flexibility, country can go for engagements with common adversary and can avoid being dragged into partner’s dispute.

From a Kautilyan theory of Mandal Siddhant, Japan is India’s natural partner (neighbour’s neighbour – mitra).

Strong India is in the best interest of Japan and strong Japan is in the best interest of India. – Shinzo Abe.

Japan and India are the lynchpin for the rule-based Indo-Pacific. – Bramha Chelani

References

Reference 1

Posted in PSIR NOTES

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