The summit and ministerial level meetings between Japan and India have taken place in right earnest and direction in the last decade. The successive meetings between Mr Shinjo Abe and Mr Modi now leave no doubt about the two Prime Ministers eagerness to take India-Japan relationship fast forward and their personal commitment to the cause. The annual summit meetings are meant for stock taking and future planning. However, if the grand intentions and announcements made at their conclusion do not keep pace with the progress on ground, the spirit of future talks is likely to be dampened. It is time to address the progress holistically and take a course correction if necessary.

Both nations today want to move beyond the era of Japanese aid for infrastructure projects to a strategic level encompassing security, defence, trade, technology and energy sectors. Japan has surplus capital and technology and India can provide it with a market, human capital and support in alleviating and maintaining regional security.

The geopolitical order affecting Japan’s security after end of WWII has undergone a drastic change. Today the Indo-Pacific Ocean geopolitics continuum is transforming rapidly even as the stakeholders in the region look for establishing a modicum of strategic equilibrium. China’s growing assertiveness matched with its economic and military prowess that is lacking sufficient transparency has impacted the region’s geopolitics the most and has contributed towards passing of a new security law by Japan. Till 2010 Japan was the second richest economy in the world and richest in Indo-Pacific when China ousted it and followed it up with a growing demand for control of the East and South China seas. This seems to have jolted Japan out of slumber. At the same time, a stable government finally established in Japan with rise of a nationalist Shinzo Abe as its Prime Minister.

In 2013, China announced a one-sided Air Defense Identification Zone (AIDZ) which included the air space covering even Senkaku Islands that are controlled by Japan. This was followed with many maritime confrontations between the Chinese and Japanese vessels. India has supported international norms on the freedom of navigation in China Seas in view of critical importance of the sea lanes of communications for regional energy security, trade and commerce which underpins continued peace and prosperity of the Indo-Pacific. The Prime Ministers of India and Japan noting the developments in the South China Sea have called upon all States to avoid unilateral actions that could lead to tensions in the region, supported effective implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea and early conclusion of the negotiations to establish a Code of Conduct in the South China Sea by consensus and have decided to hold regular close consultations on the issues related to maritime safety and security of sea lanes of communication¹.

After formation of a new government under Abe in 2012, Japan has been steadily working towards a reliable and deterrent security structure. It revamped its National Security Council (NSC) earlier known as Security Council on 04 Dec 2013, followed it up with adopting first time a National Security Strategy (NSS) that is aimed at “proactive contribution to peace” and issued the National Defence Program Guidelines (NDPG) giving further details of its defence plans and stance. Its defence budget for 2015 is formidable $ 42 billion. It has state of the art fighter aircraft, surface ships, submarines, missiles systems and armour. Japan’s Self Defence Force (SDF) has participated in peacekeeping operations in Golan Heights, Afghanistan and Iraq with legislative backing. SDF have also operated in the Somalian waters in 2009 on Anti-Piracy missions.

In September 2015, Prime Minister Shinjo Abe’s government passed a legislation that enabled Japan’s military to mobilize overseas when Japan or any of its close allies are attacked, threatening Japan’s survival and posing a clear danger to its people. This is in stark contrast to Japan’s post World War II (WW II) Constitution which barred it from using force to resolve conflicts, except only for self defence.

The bill replaces the previous self defence doctrine with that of ‘collective self defence’. It also streamlines the Japanese government’s ability to dispatch its Self Defence Force (SDF) abroad in order to provide logistical support to an allied foreign force, removing the cumbersome necessity of having the Diet pass a unique, temporary law for each such operation. Opponents of the legislation in Japan claim that it could draw Tokyo into US led conflicts around the globe. Japan is Washington’s top ally in enforcement of President Obama’s ‘Asia pivot’, a doctrine that China considers is aimed primarily against it.

Today in the Indo-Pacific we have an assertive China, a resurgent Japan and an aspiring India. The enactment of the security law by Japan may be seen as a positive sign giving it the capability to balance the regional security order. China sees the legislation as provocative and in a blistering commentary has said that Abe has taken Japan back into war mode from post war order. China sees a militaristic Japan capable of harming its interests.

Just two decades back Japan was focussed towards investing in China and India was considered unprofitable and cumbersome for investment. The only significant deal made was in the 1980s with the Suzuki Motor Corporation’s investment in the automobile sector, bringing in advanced technology and management ethics to India. However, the emerging strategic situation today has compelled both nations to reinvigorate their relationship for mutual benefits.

During the latest summit meeting in Delhi in December 2015, Prime Ministers Narendra Modi and Shinzo Abe resolved to transform the India-Japan Special Strategic and Global Partnership, a key relationship with the largest potential for growth, into a deep, broad-based and action-oriented partnership, which reflects a broad convergence of their long-term political, economic and strategic goals².

Last year Japan removed six of India’s space and defence related entities from its Foreign End User List that will help India to enhance trade and collaborate in high technology. Both nations have committed to work together for India to become a full member in the four international export control regimes: Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement and Australia Group, with the aim of strengthening the international non-proliferation efforts³. India and Japan have also signed an agreement for cooperation on peaceful use of nuclear energy during the latest summit meeting.

Japanese assistance has helped in conceptualizing and executing the prestigious Delhi Metro Project. India and Japan have also agreed to hasten work in the ongoing flagship projects, such as the Western Dedicated Freight Corridor (DFC), Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC) and completion of the Joint Feasibility Study on High Speed Railway system on Ahmadabad-Mumbai route. Japan will also help to strengthen energy cooperation through strategic collaboration in the global oil and natural gas market and cooperation in Clean Coal Technology (CCT). It has committed to cooperate in enhancing connectivity and development in Northeast India and linking the region to other economic corridors in India and to Southeast Asia, which would catalyze economic development and increase prosperity in the region⁴. Both nations have also signed a MOU for developing Varanasi into a smart city.

The DMIC entails the construction of a freight railway line of about 1,500 kilometers connecting Delhi and Mumbai and the development of infrastructure such as industrial parks, logistics bases and power plants, mainly through private investment alongside the line. The DMIC will extend over some 150 to 200 kilometers on both sides of the dedicated freight rail line, taking in six states and accounting for 14 percent of India’s total area and 17 percent (173 million) of India’s total population. By making the DMIC area a base for manufacturing, the Government of India hopes it will provide more jobs and business.⁵ India is willing to promote Japanese Industrial Townships aimed at making India more hospitable destination for Japanese business. India and Japan have decided to develop 11 sites and that will boost Make in India campaign⁶.

Japan has shown flexibility in transferring defense equipment and technology to India. Talks are in progress for buying US 2 amphibious aircraft from Japan. India and Japan also signed a security pact in 2008 under which both countries will have regular military exercises and joint maritime patrols in the Indo-Pacific region. Japan is an important member of the annual Malabar maritime exercises since 2007 and both countries have participated actively in the Indian Ocean region and Coast of Japan, the latest of which was carried out in the Indian Ocean from 14th to 19th October 2015.

Both countries are members of the East Asia Summit (EAS) and dialogue partners of ASEAN and India would need support of Japan for getting a membership of the Asia-Pacific Economic Cooperation (APEC) and Trans-Pacific Partnership (TPP) forums at some time.

The Indian economic growth for financial year 2015 is expected to reach 7.5 percent, placing India at the top of the World Bank’s growth chart of major economies for first time⁷. The economy may touch $5 trillion by 2025 if seven per cent growth rate is sustained⁸. The population of India will grow from the present level of 1.3 billion to an expected 1.4 billion by 2022, overtaking China as the world’s most populous country, and will continue rising to 1.5 billion by 2030 and to 1.7 billion by 2050⁹.

Japan would like to invest in such a growing economy having assured labour force as well as consumers. But there are still many impediments to doing business in India. The World Bank publication “Doing Business” ranks countries annually according to the ease of conducting business. In its October 2014 edition, India was ranked 142nd out of 189 countries. Singapore ranked first, New Zealand second, Hong Kong third and Japan twenty-ninth. In assigning rankings, the report analyzes regulations applicable to business firms over their entire life cycle, including those governing start-ups, operations, trading across borders, paying taxes and resolving insolvency. Sakamoto Takema, Chief Representative of the India office of Japan International Cooperation Agency (JICA) has observed that “to stimulate business activities among private companies and translate that business into sustainable economic growth, India needs to resolve infrastructure inadequacies and improve a variety of regulations” ¹⁰.

To overcome Japan’s concerns on boosting investment, Prime Minister Modi underlined his determination to further improve the business environment in India through improved tax, administrative and financial regulations during the summit meeting in September 2014¹¹.

Looking at the plethora of joint programs for cooperation listed above, it will be worthwhile to ensure that they are executed and monitored regularly. Their timely implementation is in the mutual interest of both countries and the regional security. The business community perceives that the passage of key legislative bills pending in parliament (land acquisition reforms and GST) if delayed could dampen investor sentiment and weigh on infrastructure spending plans. Energy remains a key constraint, and the fall in oil prices over the past year represents a rare opportunity to rationalize energy prices as well as undertake wide-ranging energy sector reforms. To the extent that credible reform agendas boost investor sentiment, they will also help create a virtuous cycle of stronger investment (including foreign investment) and output growth in the short term¹².

‘Make in India’ program can get a big boost with the help of the economic and technological superpower that Japan is. The economic engagement has witnessed significant strengthening after both countries signed a Comprehensive Economic Partnership Agreement (CEPA) in 2011. India and Japan share a special relationship in the Indo Pacific. There is plenty of goodwill for Japan in India and India recognizes Japan’s role in India’s assistance programs in the past. However, looking at the current Indo-Japan yearly trade of $ 16 billion there is a long way to go. The share of the India-Japan bilateral trade has been hovering around one percent of Japan's total foreign trade though during Mr. Modi’s visit to Japan last year, Japan announced doubling of its private and public investment in India to about $34 billion over a period of five years.

The contours of India-Japan economic and strategic partnership laid down during summit meetings can be realized if both nations stay focused and double march on ground. It will be though a challenging task converting grand intentions and announcements to accomplishments. A strong relationship with Japan is in harmony with the Indian security perspective. The passing of security bill gives Japan more flexibility to operate effectively in the Indo-Pacific region and in close partnership with USA and allies. However, India will also have to tread cautiously and need not come out as aligning with Japan against other regional powers.

Endnotes

1. Joint Statement on India and Japan Vision 2025: Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World (December 12, 2015)
2. ibid
3. Joint statement issued in September 2014 after Modi-Abe summit meeting in Japan
4. See N. i
5. Sakamoto Takema, chief representative of the India Office of JICA in the Japan Journal Oct 2015
6. Kenji Hiramatsu, Ambassor of Japan to India in article titled ‘Strengthening Bonds’ in Subh Yatra magazine, December 2015
7. Global Economic Prospects, a report published by the World Bank in June, 2015
8. Mr Jayant Sinha, Minister of State for Finance during FICCI annual general meeting in December 2015
9. World Population Prospects, a report published by the United Nations in July 2015
10. Sakamoto Takema, chief representative of the India Office of JICA in the Japan Journal Oct 2015
11. Joint statement issued in September 2014 after the India-Japan summit meeting
12. G l o b a l Economic Prospects, a report published by the World Bank in June, 2015

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Published Date: 30^th December 2015, Image Source: http://indianexpress.com
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)