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Japan, India Edge Closer

There’s more to a Japan-India partnership than China. There are plenty of reasons for them to move closer.

As Japanese workers depart en masse from the cities for Golden Week, and diplomatic attention focuses on Prime Minister Yoshihiko Noda’s visit to Washington D.C., significant progress has been made in Japan’s relations with India.

Relations between Japan and India are often criticized for lacking initiative. However, as commentators and strategists alike increasingly speak of the “Indo-Pacific” rather than the narrower “Asia-Pacific,” Japan and India are putting this broader concept into practice.

India first really appeared on Japan’s radar because of its impressive economic growth and the enormous potential India’s consumer and labor markets had for Japanese businesses struggling to cope with a shrinking population at home, and concern with over-dependence on China abroad. At the turn of the century, the “dot com” bubble, which highlighted India’s IT aptitude, coincided with some impressive results resulting from economic liberalization reforms initiated a decade earlier.

Still, trade remains at disappointing levels of $18 billion, just 1 percent of Japan’s total trade, even after the signing of a Comprehensive Economic Partnership Agreement (CEPA) in 2011. Foreign Direct Investment (FDI) in India, however, while declining overall, has quadrupled from Japanese sources. Japanese companies see enormous potential in India’s young, aspirational and vast population – of India’s approximately 1.2 billion people, 60 percent are under the age of 30.

Today, over 800 companies are operating in India, focusing on automobiles, white goods and pharmaceuticals. The flagship project – the Delhi-Mumbai Industrial Corridor (DMIC), a 1,400 kilometer long link between the hubs of Mumbai and Delhi – is currently being implemented following Tokyo’s further commitment in late 2011 of more than $4.5 billion over the next five years.

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With this promise and activity in mind, on April 30 Japan and India held their first “Strategic Economic Dialogue” in New Delhi. Issues discussed during the meeting included infrastructure, railways, rare earth exports and energy.

But the security dimension of the bilateral relationship is of particular importance to the region and international observers. Despite political uncertainty, catastrophic natural disasters and economic instability, Japan and India have recognized their common cause on several security issues.

Shared maritime security interests were the first to be noted, and continue to hold center stage. Both countries rely heavily on the safe passage of energy supplies through the Indian Ocean and, less explicitly, are concerned with China’s aspirations to build a blue water navy that could challenge the current regional power balance.

Japan and India have previously participated in the U.S.-India-led Malabar Exercises in 2007 and as a result of the sixth Strategic Dialogue between Foreign Minister Koichiro Gemba and his Indian counterpart, S.M. Krishna, joint exercises between the Indian Navy and Japan’s Maritime Self-Defense Force will take place later this year. In addition, a “maritime dialogue mechanism” is to be launched to further anti-piracy off the coast of Somalia and improve information sharing. As former Ambassador to Japan H.K. Singh notes, through these efforts Japan and India can create “regional public goods.”

In December, during Noda’s trip to India, Japan relaxed its four-decade long arms export ban. Whether India will take advantage of this remains to be seen. Thus far, the U.K. has been the major beneficiary, which some see as consolation for London losing out on the Eurofighter bid to replace Japan’s next-generation fighter jet.

India hasn’t explicitly called for joint development, but military experts in India have voiced interest in Japan’s advanced technology. In 2011, India was the world’s biggest importer of arms, reflecting a shift towards the modernization of its military hardware. India’s ports in particular require attention, while according to some reports, the Indian Navy is currently evaluating the Shinmaywa US-2 amphibious aircraft, which has a range of 4,700 kilometers.

India remains hesitant over suggestions that ties with Japan come at the expense of others in the region. India’s location means it’s surrounded by often antagonistic neighbors, as well as Russia and China. In April, Krishna traveled to Moscow to meet his Chinese and Russian counterparts as part of the Russia-India-China trilateral partnership that has become increasing less relevant since the establishment of the BRICS meetings.

Gradually, however, India and Japan are recognizing the benefit of such “mini-laterals” On April 24, for instance, Japan hosted a Japan-India-U.S. trilateral dialogue in Tokyo, the second such session since the forum was inaugurated in Washington, D.C. in December 2011. The discussions received relatively little attention, but considering China’s opposition to previous attempts to group like-minded nations – such as the failed Quad initiative (with the addition of Australia) in 2007 – Beijing’s muted response was a positive development.

Even on the most politically sensitive subject of nuclear energy, Japan and India are pushing forward with negotiations on Japanese nuclear exports, since they began in June 2010.

A bilateral treaty hasn’t been concluded and certain elements of disagreement need to be addressed. These most likely refer to India’s continued refusal to sign the Non-Proliferation Treaty (NPT). Japanese officials have admitted this doesn’t in itself represent a barrier to a conclusion, but will cause delays domestically due to bureaucrats who are eager to placate anti-nuclear fears that have taken hold following the Great East Japan Earthquake.

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For much of Japan and India’s dialogue, solely bilateral issues have been pursued. However, shared security concerns over third parties are gradually beginning to enter into the dialogue.

North Korea’s nuclear program has never directly threatened India, which has understandably shown greater concern for Pakistan's nuclear capability. However, India seeks a greater regional role and Pyongyang continues its provocations, New Delhi has been encouraged to take a position.

Burma’s reforms are another potential topic for discussion. Japan has never been truly comfortable with the Western approach to Burma, instead preferring greater engagement than the U.S. or Europe. India has also sustained channels to Burma’s leadership – channels the U.S. has recently started incorporating into its own efforts to encourage political reform.

In July, meanwhile, Tokyo will be hosting an international conference on Afghanistan, a country whose stability remains a high priority for India. As bilateral trust increases, cooperation on such third-country issues is likely to continue.

Of course there are some reasons for caution. India’s economic miracle has weakened in recent months, with growth slowing to 6.9 percent in 2011-2012. High inflation and charges of complacency among Indian elites, who are hesitant to enact further economic reforms, coupled with high-profile cases of corruption continue to taint the Indian record.

Furthermore, India’s strategic direction is still unknown. India’s dynamic economy has won it a seat at the high table of international politics, but New Delhi has continued to be indecisive in formulating a policy to respond to global challenges such as the Arab Spring.

Nevertheless, in both capitals, Japan-India relations enjoy cross-party support as well as encouragement from the United States. Although U.S. overtures towards India in recent years have no doubt accelerated Japan’s own efforts, Tokyo and New Delhi are taking the lead in developing one of the most important relationships for both their futures.

Japan-India relations are yet to reach their full potential, but as the recent meetings demonstrate, in fields including economic, disaster relief, military and strategic dialogue, significant progress is being made.


Victoria Tuke is a Daiwa scholar based in Tokyo.