When Modi Meets Abe This Week – Analysis

What are the main topics that would draw attention of the two leaders at the India-Japan Bilateral Summit?

By K. V. Kesavan

Japanese Prime Minister Shinzo Abe is scheduled to visit India next week (12 to 14 September) to attend the annual bilateral summit. This is the fourth summit that both Abe and India’s Prime Minister Narendra Modi are going to attend. Ever since their first summit in 2014, the bilateral partnership has been steadily expanding and it has been elevated to “Special Strategic and Global Partnership.” Both countries are now seeking to transform their ties into a deep, broadbased and action-oriented partnership with a view to contributing to the shaping of the strategic and economic architecture of Asia.

The present summit is strikingly different from the previous ones in the sense that there is no outstanding issue that calls for protracted negotiations for a solution. For instance, the civilian nuclear cooperation agreement figured prominently as a pending issue in several previous summits and that issue has been settled.

This time around, one could, however, note a significant change in the relative positions of the two leaders. Modi has emerged politically stronger since the last summit as he has effectively consolidated his strength by winning some major state elections. He has also succeeded in electing his own party candidates to the positions of the country’s President and Vice President. On the other hand, Abe who enjoyed strong popular support from 2012, has faced a major setbacks in recent months, thanks to political scandals, electoral defeat in the Tokyo Assembly polls and many gaffes committed by his colleagues. His approval ratings which remained above 70% have come down to below 35%. This has seemingly weakened his zeal to push through some of his political goals like amending the constitution by 2020 as he had earlier intended. There is a belief in Japan that Abe’s recent reconstitution of his cabinet was done with a view to quickly regaining his lost ground. However, it is hard to imagine whether this changing political scenario would have any impact on the summit.

The present summit takes place against the backdrop of two critical developments in the region and both will figure prominently in the summit deliberations.

First, the threats posed by North Korea’s nuclear weapons and missile programmes have assumed more dangerous proportions in the recent months. Though the US, Japan and South Korea have strongly reaffirmed their resolve to bring Pyongyang to its senses, North Korean leader Kim Jong-un is relentlessly pursuing his nuclear programme. While New Delhi has always expressed its serious concerns about the escalating nuclear crisis in East Asia, its categorical condemnation of North Korea on 3 September has been welcomed in Japan. Even Katsuyuki Kawai, Adviser to Prime Minister Abe, recently admitted that that North Korean nuclear threat could drive Japan to think in terms of developing long-range missiles or at least acquiring inter-continental ballistic missiles and cruise missiles to counter the threat.

Second, the summit also comes close on the heels of the military standoff in Doklam in the China-India- Bhutan tri-junction. Japan’s support to India’s position on the issue was also noted as a sign of the bilateral partnership gathering more political clout and understanding.

Given the above geostrategic scenario, what are the main topics that would draw the attention of the two leaders at the summit? Both countries share many common interests in the maintenance of peace and stability in the Indo-Pacific region. There is a strong synergy between Modi’s “Act East Policy” and Abe’s “open and free Indo-Pacific strategy.” In addition their initiative to create an Asia-Africa growth corridor is aimed at improving the economic and infrastructure connectivities in both continents and could provide an alternative to China’s Belt and Road Initiative.

Defence cooperation between India and Japan has witnessed significant strides in recent years. They signed the Memorandum on Defence Cooperation and Exchanges in 2014 and two more defence framework agreements in 2015 pertaining to the Transfer of Defence Equipment and Technology and Security Measures for the Protection of Classified Military Information. Bilateral defence dialogue has been going on smoothly for the last several years. The joint statement issued by India’s Defence Minister Arun Jaitley and his Japanese counterpart Itsunori Onodera on September 5, 2017 indicates clearly the broadening and deepening defence cooperation between the two countries. They endorsed the importance of enhancing bilateral cooperation between governments and defence industries of the two countries to encourage collaboration including for defence and dual-use technologies. Modi has shown great interest in welcoming Japan to play a key role in India’s defence production. The Indian government has considerably relaxed its rules to welcome foreign technologies in the defence field. Bot Modi and Abe will also explore the prospects of India’s purchase of US-2 amphibious aircraft.

Maritime security is another issue that will figure prominently in the discussion at the summit. Both Abe and Modi have shared common interests in stressing the need for freedom of navigation and overflights in the open seas. They have also stressed that all disputes related to maritime territories should be settled peacefully in accordance with the provisions of the UNCLOS and that no country should seek to change the prevailing status-quo by force.

Economic cooperation

Economic relations continue to form the bedrock of the partnership and Modi is deeply interested in getting Japan more deeply involved in several crucial infrastructure projects. Japan’s ODA is being utilised to modernise key sectors in India including transport, communication, environment and health.

Both leaders are going to perform the groundbreaking ceremony for the construction of India’s first high speed rail system, between Ahmedabad and Mumbai. This carries a great deal of significance for Abe, who has been keen to supply Japan’s high quality infrastructure facilities to Asian countries. In fact, Abe has been highlighting Japan’s superior technologies to counter China’s efforts to export its own systems. In the case of Indonesia, China even succeeded in outbidding Japan to construct its high speed rail system. In this kind of rivalry, the Ahmedabad-Mumbai project assumed critical importance for Japan as it could become a model for other countries too.

Taking into account the long-term cooperation in high speed railways as well as the overall railways modernisation, both governments are aware of the importance of human resource development and the need for establishing institutions for providing technical training as well as technology transfer. Modi will discuss the prospects of Japan’s deeper involvement in his Make in India, Skills India and Digital India schemes.

In recent years, the Indian government has encouraged Japan to play a crucial role in the economic development of the Northeast India which has remained relatively backward. Today Japan is involved in implementing several important projects in the region including construction of highways, power, sewage water and management of natural resources. Recently, both India and Japan have formed a coordination agency to intensify cooperation between the two sides. At the present summit, one may expect the two leaders to add more thrust to the on-going projects in the region.

Turning to bilateral trade and investment, both leaders know that though Japanese investment in India has increased considerably in recent years, there is still enormous scope for further growth. In 2016-17, Japanese investment in India amounted to $4.7 billion compared to $2.6 billion during 2015-16. The summit will provide a good opportunity for both leaders to take effective measures to further accelerate Japanese investment. Similarly, the volume of bilateral trade still remains quite low amounting to $14.5 billion in 2015-16. In fact, the trade volume has been declining in recent years despite the Comprehensive Economic Partnership Agreement (CEPA) signed by both countries. The CEPA has still not produced the benefits that were expected. It is therefore necessary for both leaders to seek changes in the CEPA to ensure that bilateral trade witnesses significant progress in the coming years.