India-Japan Ties: The China Factor and Beyond
Photo Credit: Reuters
By Tridivesh Singh Maini

India-Japan Ties: The China Factor and Beyond

Aug. 03, 2017  |     |  0 comments

The India-Japan relationship which has grown from strength to strength in recent years is a multi-dimensional one. Both countries established a Strategic and Global Partnership during former Indian PM Dr. Manmohan Singh’s visit to Japan in December 2006, and this relationship was upgraded to a Special Strategic Partnership during PM Narendra Modi’s visit to Japan in September 2014. Modi and Japanese PM Shinzo Abe have met on a number of occasions and they have focused on accelerating the strategic and economic dimensions of the relationship.

Strategic ties between both countries have understandably been in the news due to two developments. First, the india-Japan Nuclear Deal signed in November 2016 came into force on July 20, 2017. With the deal coming into force, not only can Japan export nuclear power plant technology to India and help India with nuclear waste management, both sides can also jointly manufacture nuclear power plant equipment under the government’s Make in India initiative. What is also significant is that India is the only country which is not a signatory to the Non-Proliferation Treaty with which Japan has entered into a nuclear agreement — this is a clear affirmation of India’s stellar non-proliferation record.

Second, the recent Malabar exercises have been dubbed as significant. The Malabar naval exercises, the 21st edition of which were held recently, are an important component of this cooperation. Japan was formally included in these exercises in 2015, though in 2007 Japan, Singapore, and Australia participated. The 2017 Malabar exercises featured 95 aircraft, 16 ships and two submarines. From the US side, USS Nimitz (CVN68), the world’s largest aircraft carrier, the guided missile cruise ship USS Princeton (CG59), and the guided missile destroyer USS Howard (DDG83) participated. Japan’s Maritime Self Defence Force ships JS Izumo (DDH 183), JS Sazanami (DD1 13) along with the Indian Naval Ship Jalashwa and INS Vikramaditya also participated.

What was also significant was that these exercises were carried out at a time when the standoff between India and China in Doklam carried on. China has also been more assertive in the Indian Ocean of late. Beijing has not hidden its discomfort with these exercises. An article in the Global Times in December 2016 stated:

“Such a large-scale military exercise was obviously designed to target China's submarine activities in the East and South China Seas in recent years, promote the US rebalance to the Asia-Pacific and cement the US presence in the region. Washington brought New Delhi and Tokyo into the exercise to relieve its pressure due to overstretched military presence around the globe and tighten its grip on the Asia-Pacific region.”

It is not just the trilateral exercise, but even the decision for India and Japan to jointly work for the development of the Asia Africa Growth Corridor is a strategic move which will not just help in enhancing connectivity and development in Africa, but also emerge as an alternative to China’s Belt and Road Initiative. The Modi-Abe joint statement during the Indian PM’s visit to Japan highlighted this point:

“Improving connectivity between Asia and Africa, through realising a free and open Indo-Pacific region, is vital to achieving prosperity of the entire region. They decided to seek synergy between India's ‘Act East’ Policy and Japan's ‘Expanded Partnership for Quality Infrastructure,’ by closely coordinating, bilaterally and with other partners, for better regional integration and improved connectivity as well as industrial networks based on the principles of mutual consultation and trust.”

Japan, which has a reputation for developing quality infrastructure globally, has committed to investing USD 200 billion in the corridor, while India has immense goodwill in the region due to historical linkages, as well as a record of capacity building in the region. In the 2015 India-Africa Summit, India committed to a USD 10 billion line of credit for Africa, giving a boost to ties between India and African countries.

Cooperation between India and Japan is not just restricted to Africa, and both countries are likely to work jointly in Iran, South Asia, and South-East Asia. An article in the Economic Times highlights this significant point. According to the article, Japan is likely to join hands with India for the expansion of Iran’s Chabahar port and an adjoining special economic zone. In Sri Lanka, the two countries are likely to work jointly to expand the strategically important Trincomalee port located in eastern Sri Lanka. They are also likely to find common ground for the development of Dawei port along the Thai-Myanmar border.

Beyond the China Factor

While the China factor is important to the bilateral relationship, the India-Japan relationship is robust and multifarious. There is immense goodwill in India for Japan, due to the advances made by the country in technology and the role the Japan International Cooperation Agency (JICA) had in funding phase 1 of the Delhi Metro project, which was an important symbol of bilateral cooperation between both countries. A large number of Japanese expats have also settled in the NCR Region especially Gurgaon.

If one were to look at the economic sphere, significant strides have been made, the foundations of which were laid by previous governments. The joint statement of Shinzo Abe and Dr. Manmohan Singh (December 2006) stated:

“In order to widen and deepen economic engagement even as an EPA/ CEPA is negotiated, the two leaders announce an ‘India-Japan Special Economic Partnership Initiative’ (SEPI). This initiative will promote enhancement of investment from Japan to India and help develop India's infrastructure and manufacturing capacity, taking full advantage of the ample availability of skill and human resources and the public-private partnership policy initiative of the Government of India.”

Both the current PM and his predecessor have understood the fact that Japan can play a key role in transforming India’s economy, by being involved in game changing infrastructural projects. While the Delhi-Mumbai Industrial Corridor was initiated during PM Dr. Manmohan Singh’s tenure, Japan is offering generous assistance and collaboration with India for PM Modi’s pet projects. The Ahmedabad-Mumbai bullet train, for example, will use Japan’s Shinkansen technology.

In May 2017, Japanese Ambassador Kenji Hiramatsu visited Imphal (the capital of Manipur) to commemorate the 73rd anniversary of the Battle of Imphal.

Japan now is number 3 in terms of FDI in India as of 2016-17. While FDI for the period of 2000-17 is estimated at over USD 25 billion, FDI for the period between 2016-17 was estimated at USD 4.7 billion. What is significant to note is that FDI is now spread over a number of sectors, including retail and food and beverages. Some states like Andhra Pradesh and Haryana have also developed close linkages with Japan. The Chief Minister of AP, Chandrababu Naidu, has sought assistance in the development of the new capital, Amaravati, and has already visited Japan.

During his visit in 2014, Naidu met with PM Abe who offered full support in developing Amaravati. In October 2015, an MOC was signed between Japan and Andhra Pradesh for greater cooperation in Amaravati, as well as the setting up the Andhra Pradesh Investment Task Force in Japan which will help in accelerating Japanese investment in India. Naidu has been following up with Japan and has been pitching hard for greater Japanese participation in the development of Amaravati.

The other states which have been working closely with Japan include Haryana, which is home to over 300 Japanese companies operational in the state. Over 2,000 Japanese expats also reside in Haryana. During a meeting with the Haryana Chief Minister in May 2017, the Japanese Ambassador to India sought assistance for setting up a Japan-India Institute for manufacturing to provide training to youngsters in the manufacturing sector.

Japan has also been reaching out more pro-actively to the North-East, and what is interesting is that here too the China factor cannot be ruled out. For very long, India had avoided Japanese investments in the infrastructure of the North-East, lest China take umbrage. In April 2017, JICA signed an agreement with the Central Government in New Delhi to provide assistance to the tune of a whopping 67,000 million Yen (Over USD 600 million) for Phase I of the North East Road Network Connectivity Improvement Project. Phase 1 will entail the upgrade of National Highway 54 and National Highway 51 in Mizoram and Meghalaya. NH-54 is located in central Mizoram, and a stretch of the targeted section of NH-54, spread over 350 kilometers, extends from the capital of the state Aizawl all the way to Tuipang in Mizoram.

The upgrade of NH54 will benefit not just the state, but will also complement projects like the Kaladan multi nodal project and the Indo-Pacific Economic Corridor which seek to enhance India’s connectivity with South-East Asia, and bolster the Act East Policy. In May 2017, Japanese Ambassador Kenji Hiramatsu visited Imphal (the capital of Manipur) to commemorate the 73rd anniversary of the Battle of Imphal. During his visit, the Ambassador pitched for greater cooperation between Japan and the North-East, and stated that Japan will build a war museum in Manipur. The Assam CM, Sarbananda Sonawal, while speaking during a workshop on the India-Japan Partnership for Economic Development in the northeastern region also pitched for greater economic cooperation between Assam and Japan, while also outlining his vision for Assam as a connector with South-East Asia.

Soft Power and People-to-People Contact

Apart from the strategic and economic spheres, there is also an increasing emphasis on soft power. During PM Modi’s visit to Japan, an agreement for sister city status between Kyoto and Varanasi was signed. The joint statement of Modi and Abe in November 2016 also made a mention of the importance both sides attach to soft power:

“The two Prime Ministers stressed the need to further strengthen the opportunities for tourism, youth exchange and educational collaboration, and decided to mark the year 2017 as a year of India-Japan friendly exchanges in the field of culture and tourism. They welcomed the MOC in the field of Cultural Exchange.”

The Japanese PM also made an announcement for easing visa applications for Indian students. Ryoichi Matsuyama, the President of the Japan National Tourist Office (JNTO), at the opening ceremony of the 2017 Year of Japan-India Friendly Exchanges, said that the JNTO will set up 13 new visa application centers in India at Gurugram, Jaipur, Kolkata, Mumbai, Pune, Ahmedabad, Goa, Bengaluru, Kochi, Thiruvananthapuram, Chennai, Puducherry, and Hyderabad.

While strategic cooperation is likely to improve due to increasing convergence between both sides, in the economic sphere as well as people-to-people contact, a lot remains to be done. Investors still complain about red tape. It is only a handful of states like Haryana and Andhra Pradesh which have been able to attract more Japanese FDI, although Japan is planning to set up industrial parks in a number of other states. India should seek greater Japanese infrastructure investment in the East and the North-East. This could complement India’s connectivity with South-East Asia, and give a boost to its Act East Policy.

Tourism still has not been tapped. The total number of tourists is way below the potential. As Ryoichi Matsuyama said: “Last year Japan saw 120,000 Indian arrivals whereas 230,000 Japanese visited India. Though the number of Indians visiting Japan is steadily increasing, the current figure is yet modest despite the vast size and scale of India and more so given the long-standing relationship between the two countries.”

While both countries have spoken about Buddhism being an important bond, more Japanese travelers (not just monks) should be encouraged to visit India’s Buddhist circuit. While India has eased out the visa procedure for Japanese citizens, perhaps Japan should look at relaxation of visas for tourists and businessmen, if it wants to draw more Indian tourists with purchasing power. It would also be important to point out that in spite of all the progress made in the bilateral relationship, there are a lot of apprehensions, some of which are unwarranted, amongst Japanese tourists about India. These can only be addressed if people-to-people interactions increase and India is more pro-active in selling its strengths.

In conclusion, the India-Japan relationship is an important one which will play a key role in shaping the economic and strategic landscape of Asia. Japan can play a key role in India’s economic transformation, but for this the political leadership on both sides need to ensure that their respective bureaucracies and other stakeholders are pro-active. Given the unpredictability of the Trump administration in the US, this partnership acquires more significance.

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