India-Japan Relations

• India-Japan Relations i.e. friendship between India and Japan has a long history rooted in spiritual affinity and strong cultural and civilizational ties. In contemporary times, prominent Indians such as Swami Vivekananda, Gurudev Rabindranath Tagore, JRD Tata, Netaji Subhash Chandra Bose were associated with Japan.
• The Japan lndia Association set up in 1903, is till date the oldest international friendship body in Japan.
• Owing to this historical connect the two countries have never been adversaries.
• Bilateral ties have been singularly free of any kind of dispute – ideological, cultural or territorial. The modern nation states have carried on the positive legacy of the old association.

Areas of Cooperation

Political

• Summit level visits from both sides started as early as 1957, which took the relations to a new level.
• An important development in the ties was the path breaking investment of the Suzuki Motor Corporation in the early 1980s that revolutionized the automobile sector, bringing in advanced technology and management ethics to India. This was a transformational development in the economic history of India.
• Japan was considered as a reliable friend in 1991, when it was among the few countries that unconditionally bailed India out of the balance of payment crisis.
• In 2000, the Japan-lndia Global Partnership in the 21st century was launched.
• In 2006, the relationship was upgraded to a ‘Global and Strategic Partnership’ with the provision of annual Prime Ministerial Summits.
• A Comprehensive Economic Partnership Agreement (CEPA) between Japan and India was concluded in 2011.
• In 2014, the two sides upgraded the relationship to a ‘Special Strategic and Global Partnership’.
• In 2015, India announced ‘visa on arrival’ scheme for all Japanese travelers, including for business purposes.
• A ‘Japan-lndia Make in India Special Finance Facility’ of JPY 1.3 trillion was also established.
• In 2016, MoUs were signed in a wide range of areas, including cooperation in the peaceful uses of nuclear energy, manufacturing skill transfer programme, outer space marine, earth and atmospheric science and technology, agriculture and food related industry, transport and urban development, textiles, cultural exchange and sports.
• During the 13^th annual summit held in Japan a vision statement was released. They also entered into a $75 billion currency swap arrangement which would aid in bringing greater stability to foreign exchange & capital markets in India.
• AAGC: The idea of Asia Africa Growth Corridor (AAGC) emerged in the joint declaration issued by Prime Minister Narendra Modi and Prime Minister Shinzo Abe in November 2016. The AAGC envisages people centric sustainable growth strategy, engaging various stakeholders. The AAGC will be raised on four pillars of Development and Cooperation Projects, Quality Infrastructure and Institutional Connectivity, Enhancing Capacities, and Skills and People-to-People partnership.

Economic and Commercial

• The India-Japan Comprehensive Economic Partnership Agreement (CEPA) that came into force in August 2011 covers not only trade in goods but also services, movement of natural persons, investments, intellectual property rights, custom procedures and other trade related issues.
• Japan extends bilateral loan and grant assistance to India since 1958, and is the largest bilateral donor for India.
• Japanese ODA (Official Development Assistance) supports India’s efforts for development in areas like power, transportation, environmental projects.
• There is active Japanese involvement in the Ahmedabad-Mumbai High Speed Rail, the Western Dedicated Freight Corridor (DFC), the Delhi Mumbai Industrial Corridor, the Chennai-Bengaluru Industrial Corridor (CBIC), and Delhi Metro Project.
• In 2016-17, India-Japan trade reached US$ 15.7 billion. India’s export to Japan for 2017-18 was US$ 4.73 billion; whereas India’s import from Japan for 2017-18 was US$ 10.97 billion. Japan was the 12^th largest trading partner for India in 2020.
• India’s primary exports to Japan are petroleum products, chemicals, elements, compounds, nonmetallic mineral ware, fish and fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn, fabrics and machinery, etc.
• India’s primary imports from Japan are machinery, transport equipment, iron and steel, electronic goods, organic chemicals, machine tools, etc.
• Japanese FDI in India in fiscal year 2016-17 was US $ 4.7 billion. Direct investment from Japan to India has increased, and Japan was the 4^th largest investor in India in FY2020. Japanese FDI into India is mainly in automobile, electrical telecommunications, chemical and pharmaceutical sectors.
• Japan and India have agreed to cooperate on the human resource development in the manufacturing sector in India through “Manufacturing Skill Transfer Promotion Programme.” The programme will help train 30000 Indian youth.
• The visit of Indian Prime Minister in 2014 resulted in Japan’s commitment to invest $35 billion in India over the next five years, including investments in some flagship initiatives such as smart cities, Delhi Mumbai Industrial Corridor and Shinkansen Bullet Train.
• The presence of Japanese companies in India is increasing steadily. As of October 2016, there were 1,305 Japanese companies that are registered in India.
• Discussions have begun for establishing the “Platform for Japan-lndia Business Cooperation in Asia Africa Region” to further enhance the exchanges between Japanese and Indian businesses toward developing industrial corridors and industrial network in the region.

Science & Technology

• The bilateral Science & Technology Cooperation Agreement was signed in 1985.
• The India-Japan Science Council (IJSC) was established in the year 1993 and so far has organised 19 annual meetings, supported 250 joint projects.
• Since 2006, several Institutional Agreements/ MoUs in the areas of life sciences, material sciences, high energy physics, ICT, biotechnology, healthcare, methane hydrate, robotics, alternative sources of energy, earth sciences, outer space, etc. have been signed between the science agencies of both countries.
• A comprehensive India-Japan Digital Partnership was launched with the vision to develop loT and Al solutions for societal benefits and explore joint collaboration in emerging technologies by utilizing the “Japan-lndia Start-Up Hub” in Bengaluru and NASSCOM’s IT corridor project in Hiroshima Prefecture.

Cultural

• Since May 2015 till September 2017, about 560 students have visited Japan under the annual ‘Japan Asia Youth Exchange Program in Science’ also known as the ‘SAKURA Exchange Program’.
• The arrival of Indians in Japan for business and commercial interests began in the 1870s.
• A cultural agreement between India and Japan came into effect from May 1957.
• The Vivekananda Cultural Centre in Tokyo was opened in September 2009. The Centre offers classes on Yoga, Tabla, Bharatanatyam, Odissi, Sambalpuri, Bollywood dances and Hindi and Bengali languages.
• A year-long Festival of India in Japan 2014-15 was held from October 2014 to September 2015.
• International Day of Yoga was actively celebrated in Japan on 18 June 2017.
• 2017 is designated as the India-Japan Year of Friendly Exchanges by the two countries.
• The Indian community in Japan focused on trading in textiles , commodities, electronics and gems and jewellery.
• In recent years, there is an 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.
• 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.

Indian Diaspora

• 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.

Defence

• Defence cooperation between India and Japan is based on “India-Japan strategic partnership”.
• There are also various frameworks of security and defence dialogue between Japan and India including the “2+2” meeting, annual Defence Ministerial Dialogue and Coast Guard-to-Coast Guard dialogue.
• Joint Exercises: India and Japan defence forces organise a series of bilateral exercises namely, JIMEX, SHINYUU Maitra, and Dharma Guardian. Both countries also participate in the Malabar exercise with the USA.
• Quad alliance: Quad is an informal strategic dialogue between India, the USA, Japan and Australia with a shared objective to ensure and support a “free, open and prosperous” Indo-Pacific region.
• India is in discussion to buy the Japanese ShinMaywa US-2i amphibious aircraft in a deal worth $1.65 billion for the Indian Navy with the objective of carrying out patrols in the larger Indian Ocean Region (IOR).

India-Japan Civil Nuclear Deal

• Against the backdrop of China’s reluctance to support India’s candidacy for the membership of the NSG, the Indo-Japanese nuclear cooperation assumes great salience.
• Japan made an exception to its rule of not conducting nuclear commerce with any state that is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). This pact was the subject of intense negotiations between the two countries for the last six years. This is a remarkable turnaround, especially compared to Japan’s reaction after India conducted the nuclear tests.
• The deal is critical to India’s renewable energy plans. Japanese companies that produce cutting-edge reactor technology were previously not allowed to supply parts to India, as the current Japanese law allows nuclear exports only to states that are either party to the NPT or allow the International Atomic Energy Agency (IAEA) to safeguard all their nuclear facilities.
• In addition, Japanese companies have significant holdings in their U.S. and French partners negotiating for nuclear reactors now, and that would have held up the deals.

Health

• In view of the similarities and synergies between the goals and objectives of India’s AYUSHMAN Bharat Programme and Japan’s AHWIN, both sides had been consulting with each other to identify projects to build the narrative of AHWIN for AYUSHMAN Bharat.

Significance of Japan to India

Strategic Reasons

• Japan is a corner stone of India’s Act East Policy.
• India needs Japan’s help in shaping the evolving security architecture in the Indo-Pacific.
• Under US-Japan-India trilateral frame work Securing critical maritime space and ensuring freedom of navigation and overflight have been a priority for the three countries in the region.

Economic

• Japan has expressed support for India’s efforts to accelerate economic development through innovative initiatives such as “Make in India,” “Digital India,” “Skill India,” “Smart City,” “Swachh Bharat” and “Start-Up India.”
• Bullet Train: The 508 km long Mumbai to Ahmedabad High Speed Rail (MAHSR) is an ambitious Rs 1,10,000 crore project, of which a loan of Rs 88,000 crore will be taken from Japan. The Japan International Cooperation Agency (JICA) will fund it at a low rate of interest of 0.1% per annum. The project will improve transport system, employment and manufacturing in India.

Significance of India to Japan

• It is a known fact that Japan, which does not have a full fledged military and has legal restrictions on use of force by its Self Defence Forces, has long been dependent on the US for its security.
• Democratic Security Diamond: Japan in 2012 envisaged a strategy whereby “Australia, India, Japan, the US state of Hawaii form a security diamond to safeguard maritime commons stretching from Indian Ocean to the Western Pacific.
• Indian Ocean Region: 90% of Japan’s oil requirements come from the Persian Gulf. The Constitutional limitations restrict Japan’s naval role to tackle issues of piracy and maritime terrorism and securing the SLOC. Japan, therefore, sees India as a strategic asset for naval cooperation. India’s role is considered crucial in securing the IOR which is critical to the US and Japanese interests.
• Indo-Pacific Regional Architecture: Moreover, India is increasingly being perceived as a potential net security provider in the region by the US, Japan and several other regional stakeholders. India’s support to the US Japan position on the South China Sea undoubtedly puts pressure on China.
• Economic: Japan has been plagued by low growth for a long time. Japan looks to boost its investment and has cutting-edge technology to share, while India needs both. With improvement in Ease of Doing Business in India and opening of Japan Desk, the investment procedures have been made smooth.

Demographic Dividend

• For nearly a decade, the working-age population of Japan has been declining and is down about 13 per cent.
• More than 50% of population of India are of working age and need jobs, but there aren’t adequate opportunities as private investment is not picking up. Japan is aging and needs more work force. Therefore, Japan and India are opportunities for each other.

Significance for the Region

• The U.S.-India-Japan trilateral engagement, which is gaining momentum will help Indo-Pacific countries to counter the increasing hegemony of a single power.
• The convergence of India’s Act East Policy, Japan’s growing focus on the freedom of navigation in the South China sea, and the US’s “strategic rebalance” towards the Indo-Pacific is aimed at regional peace and security
• QUAD – Quadrilateral formation that includes Japan, India, United States and Australia will help – Upholding the rules-based order in the Indo-Pacific and respect for international law, freedom of navigation and over flight; increase connectivity; challenges of countering terrorism, piracy and upholding maritime security in the Indo-Pacific.
• India-Japan welcome the U.S.-North Korea Summit at Singapore in June 2018 and three inter-Korean Summits in the year 2018. They also called for North Korea’s complete, verifiable, and irreversible dismantlement of all weapons of mass destruction and ballistic missiles of all ranges in accordance with the relevant United Nations Security Council resolutions (UNSCRs).

Challenges to the bilateral relations

• The trade ties which have remained underdeveloped when compared to India’s trade ties with China.
• Both countries have 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 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.
• Asia-Africa Growth Corridor (AAGC) project: there is a great deal of scepticism on the feasibility of the AAGC itself as well as the nature of the projects embedded in it.

Way Forward

• India and Japan are two powerful democratic forces in Asia which are searching for more options to work and prosper jointly.
• Indo-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’.
• Both countries 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.
• Indo-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 done to keep the Indo-Pacific multipolar.

Conclusion

• The relationship between India and Japan is perhaps the best it has ever been, largely because both countries have Prime Ministers who view the region and the world in very similar terms. This concurrence of world views was witnessed in the release of a joint statement.
• Further, similar outlooks can also unlock the vast potential for growth, given the complementarities that exist between the two Asian economies.