India Japan Relation: Bilateral Ties, Economic Cooperation, and Strategic Alliances

To prepare for INTERNATIONAL RELATIONS for any competitive exam, aspirants have to know BILATERAL RELATIONS WITH DEVELOPED COUNTRIES. Here we will study about India Japan Relations. It gives an idea of all the important topics for the IAS Exam and the Governance syllabus (GS-II.). India Japan Relations terms are important from Governance perspectives in the UPSC exam. IAS aspirants should thoroughly understand their meaning and application, as questions can be asked from this static portion of the IAS Syllabus in both the UPSC Prelims and the UPSC Mains exams. Even these topics are also highly linked with current affairs. Almost every question asked from them is related to current events. So, apart from standard textbooks, you should rely on newspapers and news analyses as well for these sections.

India Japan Relations: Background

• India Japan friendship has a long history rooted in spiritual affinity and strong cultural and civilization ties dating back to the visit of Indian monk Bodhisena in 752 AD.
• The people of India and Japan have engaged in cultural exchanges, primarily as a result of Buddhism, which spread indirectly from India to Japan, via China and Korea.
• PM Modi reiterated Mutual trust and faith, understanding of each other’s interests and concerns, and continuous high-level interactions, this is the uniqueness of India Japan relations.
• Independence movement: The leader of the Indian Independence Movement, Rash Behari Bose was instrumental in forging India–Japan relations during India’s independence movement.
• During World War II, The British occupiers of India and Japan were enemies during World War II. Subhas Chandra Bose used Japanese sponsorship to form the Azad Hind Fauj or Indian National Army (INA).
• Post Second World War, India did not attend the San Francisco Conference but decided to conclude a separate peace treaty with Japan in 1952 after its sovereignty was fully restored marking a defining moment in the bilateral relations and setting the tone for the future.
• During the cold war: Relations between the two nations were constrained, Japan as a result of World War II reconstruction, was a U.S. ally, whereas India pursued a non-aligned foreign policy, often leaning towards the Soviet Union.
• Pokhran nuclear test: In 1998, Japan imposed sanctions on India following the Pokhran-II, an Indian nuclear weapons test, which included the suspension of all political exchanges and the cutting off of economic assistance. These sanctions were lifted three years later.
• Both nations share core values of democracy, peace, the rule of law, tolerance, and respect for the environment in realizing pluralistic and inclusive growth of the region

Political Relations Between India Japan

• Regular high-level visits and engagements between India Japan have taken place at G20 Summit held in Osaka, G7 Summit in Biarritz in August 2019, and Eastern Economic Forum in Vladivostok on 5 September 2019.
• In the meeting in Vladivostok, India Japan decided to hold the first 2+2 Ministerial Meeting at an early date.

India Japan 2+2 MINISTERIAL DIALOGUE

• The 2+2 ministerial dialogue is seen as an upgrade of the meeting between foreign and defense secretaries of the two countries, the first round of which took place in 2010.
• The ministerial level meeting was held after a decision to institute a Foreign and Defence Ministerial Dialogue was taken during the 13th India Japan Annual Summit held in Japan in 2018.
• 2+2 meeting aimed to give further momentum to their special strategic partnership, particularly in the maritime domain.
• The two sides exchanged views on the situation in the Indo-Pacific region and resolved to work for achieving a shared objective of peace, prosperity and progress in the region.

INDIA’S 2+2 MECHANISM

• Japan is the second country with which India has 2+2 ministerial dialogue (USA being the other one)
• India and Australia also have the 2+2 at the official level.
• With this, India has 2+2 mechanisms with all the Quad countries at some level.

India Japan Economic Cooperation

• The India Japan Comprehensive Economic Partnership Agreement (CEPA)that came into force in August 2011 is the most comprehensive of all such agreements concluded by India.
• Japan already has invested in the $90 billion Delhi-Mumbai Industrial Corridor.
• Japanese FDI into India has mainly been in the automobile, electrical equipment, telecommunications, and chemical and pharmaceutical sectors. Eg. Suzuki.
• Japanese companies have established ten  India Japan Institute of Manufacturing (JIM) in India.
• Cooperation in Railway Sector Mumbai-Ahmedabad High-Speed Railway (MAHSR). The ambitious project is being implemented with nearly 90% financial support and technology from Japan.
• The two countries have agreed to a Bilateral Swap Arrangement that would allow their central banks to exchange local currencies for up to $75 billion. This is substantially more than the $30 billion currency swap arrangement announced between China and Japan.
• Japan is the third-largest source of FDI ($28.160 billion between 2000 and June 2018) investment into India after Mauritius and Singapore.
• 57 Japanese companies have committed to investing 320 billion yen in India, which is expected to create at least 3,000 new jobs.

Importance Of The Currency Swap Agreement between India Japan

• Currency swap typically involves the exchange of interest and sometimes of principle in one currency for the same in another currency. Interest rates are exchanged at fixed rates through the life of the contract.
• It was an important measure in improving the confidence in the Indian Market.
• It would enable the availability of agreed amount of capital to India
• It would also bring down the cost of capital for Indian entities while accessing the foreign capital markets.
• It would also give a boost to the internationalization of Indian Rupee.

India Japan Strategic cooperation

• Japan will supply nuclear reactors, fuel and technology to India. India is not a signatory to the non-Proliferation Treaty (NPT), and is the only non-signatory to receive an exemption from Japan.
• Both countries have a rivalry with China and to counter its behavior in the Indo-Pacific region the two countries formed the Quad which includes USA and Australia
• Japan is only the second country after the United States with India holding 2+2. The India Japan 2+2 dialogue is an endorsement of the special strategic partnership between New Delhi and Tokyo.

India Japan Defense cooperation

• India and Japan held their first bilateral exercises, ‘Dharma Guardian And ‘Shinyuu Maitri’, in 2018. It was held between the Armies and Air Forces of both the countries.
• Japan participates in the annual India-US Malabar naval exercises on a regular basis.
• Japan also joined the India-US Air Force exercise ‘Cope India As an observer for the first time.
• Progress in Maritime Domain Awareness (MDA). India has two centers – Information Management and Analysis Centre (IMAC) and Information Fusion Centre – Indian Ocean Region (IFC-IOR) located at Gurugram specifically for this purpose under the National Maritime Domain Awareness (NMDA)
• The sale of the ShinMaywa US-2 amphibious aircraft for the Indian Navy.
• Japan has committed to manufacturing 30 percent of the aircraft in India and which would help in the improvement of Indian defense manufacturing.
• Acquisition and Cross-Servicing Agreement (ACSA): Negotiations are going on for the agreement through which Japan could gain access to Indian facilities in the Andaman and Nicobar Islands and India could have access to Japan’s naval facility in Djibouti.

India Japan: Maritime Domain Awareness

• Maritime Domain Awareness (MDA) is the effective understanding of anything associated with the global maritime domain that could impact the security, safety, economy or environment of the country.
• India has two centers – Information Management and Analysis Centre (IMAC) and Information Fusion Centre – Indian Ocean Region (IFC-IOR)located at Gurugram specifically for this purpose under the National Maritime Domain Awareness (NMDA) Project.

India Japan Digital Partnership (IJDP) and Start-up Hub

• In view of synergies and complementarities between the two nations, “India Japan Digital Partnership” (I-JDP) was launched during the visit of PM Modi to Japan in October 2018 furthering existing areas of cooperation as well as new initiatives within the scope of cooperation in S&T/ICT, focusing more on “Digital ICT Technologies”.
• Startup-India (under Invest India) and Japan Innovation Network (JIN) have signed a MoU on innovation collaboration with a focus on SDGs (Sustainable Development Goals) connecting two start-up ecosystems in June 2018.
• Four Japanese investors- Mizuho Bank, Development Bank of Japan, Nippon Life and Suzuki have already signed letters of intent.
• The fund aims to invest in more than 200 Indian companies focused on emerging areas such as Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), fin-tech, healthcare, consumer, education, robotics, automation and business to-business (B2B) software.

India Japan Space Dialogue

• India Japan are seeking higher cooperation in critical sectors during their space dialogue held in India.
• The India Japan Space Dialogue was announced by the Prime Minister and Japanese Prime Minister in October in 2018 at the end of the annual summit of both countries.
• This was the first ever space dialogue between both the countries.
• The two countries have their own systems for monitoring satellite images and ship movements in the oceans, as the information is critical for national security as well as coastal security of the two countries.
• Focus area: Surveillance and Maritime Domain Awareness (MDA) of the waters in the East China Sea, the South China Sea and the Indian Ocean will likely remain focus areas in the bilateral space collaboration.
• Space agencies of the two countries ISRO and JAXA focused on global navigation satellite system, space situational awareness (SSA), space security, space-related norms and Surveillance and Maritime Domain Awareness (MDA) of the ocean waters.

India Japan Disaster Risk Reduction

• Following the 2017 MoC in the field of Disaster Risk Reduction, the Cabinet Office of Japan and Ministry of Home Affairs of India jointly organized a series of workshops to exchange information on policy and measures on disaster risk reduction, and to enhance cooperation between Japan and India.

India Japan: Healthcare

• In view of the similarities and synergies between the goals and objectives of India’s AYUSHMAN Bharat Programme and Japan’s ASHWIN, both sides had been consulting with each other to identify projects to build the narrative of AHWIN for AYUSHMAN Bharat.
• Both sides have subsequently concluded a MoC to formalize cooperation under the overall MoC in the field of Healthcare, which includes establishing a high-level consultative mechanism on the lines of HSR cooperation to build robust health care partnership.

India Japan Skill Development

• Under the MoC signed in 2016 to train 30,000 shop floor leaders, Japanese companies have established 12 Japan India Institute of Manufacturing (JIM) in India and 4 Japanese Endowed Courses (JEC) in Indian Engineering Colleges.

India Japan Sister-State and Sister-City Cooperation

• There are growing links between Japan’s Prefectures and States in India.
• As of now 7 Indian states (currently active 6 MoUs) and 3 cities/regions in India have partnered with the Prefectures and Cities of Japan through MoUs to cooperate under diverse sectors.

India Japan Diaspora Dynamics

• In recent years, there has been a change in the composition of the Indian community with the arrival of a large number of professionals, including IT professionals and engineers working for Indian and Japanese firms as well as professionals in management, finance, education, and S&T research.
• Approximately 38,000 Indians live in Japan. The Nishikasai area in Tokyo is emerging as a “mini-India”. Their growing numbers had prompted the opening of three Indian schools in Tokyo and Yokohama.

Importance of India Japan Relations

• Wide range of interests including regional cooperation, maritime security, global climate, and UN reforms.
• Both India and Japan also share several common ideals like democracy, the rule of law, and human rights, in addition to the complementarities that bind their economies.
• New Delhi is seeking massive investments in its infrastructure sector and Japan is a major investor. Japan’s technological and economic prowess could accelerate India’s development by transforming its infrastructure and manufacturing sectors.
• India is a big market for Japanese companies: Japan’s interest in India is increasing due to a variety of reasons including India’s large and growing market and its resources, especially the human resources.
• Indo-Pacific and Quad: Sharing convergent interests, both countries are strongly committed to freedom of navigation and over flights and unimpeded commerce in the open sea which is important for the stability and security of the Indo-Pacific region.
• India’s Act East Policy and Japan’s “Free and Open Indo-Pacific Strategy” converting NER as a critical region, where, and both countries are keen to extend their cooperation to the larger Indo-Pacific region—including the African continent.
• The rise of China has been an important factor, while India’s growing closeness with the US has also played a role, as the US and Japan already have a close alliance.

India Japan Challenges

• The India Japan trade ties which have remained underdeveloped when compared to India’s trade ties with China. The bilateral trade between New Delhi and Tokyo in 2017-18 stood at $15.71 billion, whereas the Sino-Indian bilateral trade in 2017 stood at $84.44 billion in spite of the political tensions between India and China.
• The two sides have also been unable to collaborate in the defense sector in spite of huge potential.
• India is one of the biggest arms importers in the world, while Japan, especially under Abe, has been looking at arms exports, though it still remains a very divisive issue within the country.
• India Japan has border and hegemonic issues with China. So their policy stance hinges generally on China, rather than growing comprehensively.
• Both had diverging interest with respect to economic issues like on E-commerce rules (Osaka track), Regional Comprehensive Economic Partnership
• A challenge for the government is to correct the lopsided trade and calibrate China’s market access to progress on bilateral political, territorial and water disputes, or else Beijing will fortify its leverage against India.
• Balancing between Quad and Brics: India is a member of groups like the BRICS, which brings together Brazil, Russia, India, China, and South Africa. In addition, though New Delhi has not joined the China-led Belt and Road Initiative (BRI), it is a member of the AIIB (Asian Infrastructure Investment Bank).So India has to do a balancing act between Quad and BRICS.
• Question mark on Quad: India has long adopted a non-aligned approach as opposed to the stauncher, pro-US foreign policy stances of Japan and Australia. The failure of these nations to come up with a joint statement points to an inherent struggle to reconcile their competing views on how best to counter the rise of China.
• Asia-Africa Growth Corridor (AAGC) project: there is a great deal of skepticism on the feasibility of the AAGC itself as well as the nature of the projects embedded in it.

India Japan: Way Forward

• India Japan are two powerful democratic forces in Asia which are searching for more options to work and prosper jointly. Economic front needs to be strengthened to reach the “Low Hanging Fruit of Asia” wherein demographic dividend of India and other Asian countries can be deployed to benefit Asia as whole.
• While it need not be institutionalized, it should work towards a roadmap with actionable items and show tangible results, such as by stepping up coordination in counter-terrorism, cyber security, and disaster relief.
• India Japan needs to join hands to establish peace and order in not only disturbed region of Asia but of the whole world.
• India Japan should be realistic enough to understand that in any future regional strategic scenario, because of its economic and military strength.
• Pollution is a serious issue in major Indian cities. Japanese green technologies can help India tackle this threat.
• Smooth implementation of the prestigious high speed rail project linking Ahmedabad and Mumbai will ensure credibility of India’s investment climate.
• India’s purchase of Japan’s indigenously made US-2 amphibian aircraft if successfully executed, could also contribute to India’s ‘Make in India’
• India Japan are also engaged in discussions on the possibilities of India acquiring Japanese technology in the production of submarines and on cooperative research in areas like unmanned Ground Vehicle and Robotics.
• There are many other areas which are providing opportunities such as Africa continent, although India Japan presented a joint venture namely Asia-Africa Growth Corridor to grab the African opportunities.
• Close cooperation with a democratic India, located midway along trade-routes connecting East Asia with the Middle East and Africa, would be advantageous to Japan.
• At the same time, a technologically deficient India has much to gain from a relationship with a country like Japan.
• India Japan should be realistic enough to understand that in any future regional strategic scenario, because of its economic and military strength, China will figure quite prominently so efforts should be made to keep the Indo-Pacific multipolar.

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