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India-Japan Relations: China Becomes The Pivot – Analysis

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Never before have the relations of India and Japan relation been calibrated by a third country factor. The recent November summit between Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe in Japan, and the deals between the two countries are the reflections of the concerns of India and Japan with respect to China’s assertiveness for Asian hegemony and muscle flexing in South China Sea.

The success of six year tug-of-war Civil Nuclear deal against China’s intransigence for anti-NGS stance and Japan’s sale of US-2 amphibious planes to the Indian Navy, pledging for Defense Framework Agreement and Joint Working Group for defense equipment and cooperation, joint cooperation for development of Chabahar Port in Iran and reiteration of commitment for maintenance of peace in South China Sea in the Joint Statement, all reflect the new directions of the India-Japan relations with a focus on China  in Asia.

There was a paradigm shift in India-Japan relations from economy to defense. Never before has defense gained prominence over the economy. In the Joint Statement, the economic focuses were preceded by defense commitment. A new twist in the India-Japan relation was observed in the aftermath of Japan introducing new defense guidelines in December 2013. Under the guidelines, Japan identified a number of areas in which it would like to strengthen cooperation with India.

The era of India–Japan defense cooperation began with MR Modi’s first visit to Japan as Prime Minister in September 2014. The summit made a turnaround in the bilateral relation focusing on defense cooperation after Japan lifted the ban on six Indian entries, including HAL (Hindustan Aeronautical Limited) – the only Indian company producing Indian defense aircraft – in the hope of selling US-2 amphibious planes. Thus, India became the first country in the world after World War II to acquire military systems from Japan.

Japan’s pledge to cooperate with India for the development of Chabahar Port in Iran was seen as another belligerent step to counter China’s support to Pakistan for its expansion of the Gwadar port in Pakistan, and which is a part of the CPEC (China Pakistan Economic Corridor) project. The Chabahar port will help India to bypass Pakistan in transporting goods to Afghanistan — currently, Pakistan does not allow India to transport through its land and territory to Afghanistan.

During the last visit of Mr Modi to Iran in May 2016, India signed an agreement with Iran to develop the Chabahar port. This will be a break through in India’s trade with West Asia.

As Prime Minster of India, Mr Modi tried to re-write a new chapter on India-Japan relations with a shift from strategic economic relations to a global partnership. He reiterated that India and Japan were the two oldest democracies in Asia and were among the three biggest economies. He asserted that the 21st Century is to be decided by Asian countries and India and Japan bilateral relation swould be the engine for 21st Century growth. Incidentally, Mr. Modi is one of the three Twitters, which Mr Shinzo Abe follows. The commentators hailed Modi as “India’s Abe.”

Modi’s shift to woo Japanese investment from automobile to defense and development of smart cities will create a new vista for Japanese cooperation in India. India has raised FDI cap in defense from 26 percent to 49 percent under Mr. Modi’s Prime Ministership. Mr Modi’s yearn for Japanese technical cooperation in making US-2 amphibious aircraft in India, besides importing the aircraft from Japan, is a case in point to mark the shift from economy to defense.

Japanese Prime Minster Shinzo Abe’s ambitious target for doubling Japanese investment within 5 years and his commitment for US $35 billion for different infrastructure projects for five years bolstered Modi’s dream for “Make in India’. While welcoming Japanese investors, he ensured “red carpet minus red tape ” in his last visit to Japan.

Japan’s seeking to woo for Modi‘s heart began with China’s aggressiveness for Asia hegemony. Visits of Japan’s Imperial couple Emperor Akihito and Empress Michiko to India (November 30 – December 5, 2013 ) after five decades , symbolizes the Japanese bent towards India. The visits stirred up a surprise because the Imperial couple do not travel often overseas on state visits, given the fragile health due to old age. The visit unleashed a paradigm shift to a bipolar relations, embracing economy and politics

Looking for alternative destinations for investment after China turned a risky investment destination – China+1 strategy became a common factor for Japanese overseas investment. The US-2 amphibious plane deal and the development of strategic defense cooperation through Defense Framework Agreement and Joint Working Group for defense equipment and cooperation usher a new Japanese investment template in India.

However, China’s intransigence to budge from anti-NSG stand and its balancing act after surgical operation in Pakistan by India, seemed to have cast some shadows over India-China relation. Till that time, Mr Modi reiterated that China was not a foe. Mr Modi vowed to court Chinese investment to make his Make in India success. During the visit of Indian Vice President Hamid Ansari to China in June 2014, accompanied by Indian Commerce Minister Nirmala Sitharaman, MOUs were signed with China for setting up four industrial parks in India with Chinese investment under the direction of Mr Modi.

Japan has always been playing a true partner’s role for India. Even in bad days, Japan extended its full cooperation to rescue India. During the drought in 1967-68, Japan was the biggest donor to India.

Japan has been one of the big foreign investors in India. During 2015-16 and the first six months of 2016-17, Japan was the third biggest investor in India. Japan’s ODA was the backbone of India’s infrastructure development , such as power, transport and environment related projects. Delhi Metro – a marked breakthrough in India’s transport – was largely financed by Japanese ODA.

Nevertheless, the Chinese nudge evoked a new chapter in India-Japan relation. The uptick in Modi- Xi Jinping bonhomie for economic cooperation and Chinese assertiveness for Asia hegemony lofted new directions of India- Japan relation . It gave a new thought for churning out a new strategic relation between the two countries. To this end, Mr Modi’s recent visit to Japan portend a turning point in the bilateral relation between India and Japan.

*S. Majumder, Adviser, Japan External Trade Organization (JETRO) , New Delhi. Views expressed are personal


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Subrata Majumder

Subrata Majumder

Subrata Majumder is an adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of “Exporting to Japan,” as well as various articles in Indian media, including Business Line, Echo of India, Indian Press Agency, and foreign media, such as Asia Times online and Eurasia Review .

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