Where India-Japan Relations Stand In 2017

Indo-Japan relations had begun in the sixth century when Buddhism was introduced in Japan. After the defeat of Japan in the Second World War in 1949, Indian prime minister Jawaharlal Nehru donated an elephant to the Ueno Zoo in Tokyo. This gesture had created a sense of closeness for the Japanese people towards India.

The peace treaty signed by both countries in 1952 paved the way for the establishment of diplomatic relations. It was during the visit of the Japanese prime minister, Yoshiro Mori, to India in 2000 when he and his Indian counterpart Atal Behari Vajpayee decided to build a “Global Partnership between Japan and India”. This landmark event sparked the beginning of a new era in Indo-Japanese relations.

As a continuation of the bonhomie, Prime Minister Narendra Modi and Prime Minister Shinzo Abe, in a summit meeting held in September 2014, agreed to upgrade the bilateral relationship to “Special Strategic and Global Partnership”. During a similar summit in India in December in the following year, the two leaders resolved to transform this partnership into a “deep, broad-based and action-oriented partnership” that reflects a convergence of their long-term political, economic and strategic goals. They also announced “Japan and India Vision 2025” that envisages “Special Strategic and Global Partnership” working together for “Peace and Prosperity of the Indo-Pacific Region and the World”. A “new era in Japan-India relations was discussed” during the annual summit held in Japan in November 2016.

With an objective to build a win-win relationship through synergies between ‘Modinomics and Abenomics’, India and Japan agreed, during Modi’s visit to Japan in September 2012, to set a common goal of doubling Japan’s direct investment into India by 2019. While making efforts to realise 3.5 trillion yen of public and private investment, financing and overseas development assistance to India over a period of five years, Japan expects India to improve its environment for business, including “easing of regulations and the stabilisation of the system”. It also requested New Delhi to provide special incentive packages for Japanese industrial townships in India.

The ‘Japan Plus’ office established by India in the Ministry of Commerce and Industry in October 2014 as a ‘one-stop’ location for resolving problems faced by Japanese companies should help meet Japan’s expectations. According to data provided by Indian research firm Venture Intelligence, Japanese firms invested $1.43 billion (about 163 billion yen) in Indian private equity and venture capital deals in the first half of 2017, more than triple the $459 million in 2016. The number of Japanese companies with establishments in India is growing at a pace of around 100 companies per year, and as of October 2016, there were 1,305 such companies in India. Direct investment from Japan to India reached 289 Yen: billion in 2015. That same year, trade from India to Japan stood at 589 (Yen: billion) and trade from Japan to India at 981 (Yen: billion).

During Abe’s visit in December 2015, India decided to introduce Japan’s ‘Shinkansen’ – one of the most efficient high-speed railway systems around the world in terms of safety and accuracy. The Delhi Metro is one of the success stories of cooperation with Japan through the ODA. The commencement of the Mumbai-Ahmedabad high-speed rail project – a flagship project of bilateral cooperation – that coincided with Abe’s Tenth Japan-India Summit Meeting in Gujarat (13-14 September 2017) demonstrates how both the leaders have put the bilateral relationship on the fast track. In addition to this promising venture, Delhi-Mumbai Industrial Corridor (DMIC) and Mumbai Trans-Harbour Link project are under different stages of execution.

Japan has assured cooperation on supporting strategic connectivity linking South Asia with Southeast Asia through the synergy between India’s ‘Act East’ policy and ‘Partnership for Quality Infrastructure’. On the soft connectivity front, Japan has announced its cooperation for the training programme of 30,000 Indian people in the Japan-India Institute for Manufacturing (JIM) over a period of 10 years, providing Japanese-style manufacturing skills and practices in order to expand India’s manufacturing industry base and contribute to ‘Make in India’ and ‘Skill India’ initiatives. The first three JIMs that would start in Gujarat in 2017 are also expected to motivate more Indian students to study the Japanese language. When Modi visited Japan in November 2016, the two prime ministers decided to celebrate 2017 as the year of Japan-India friendly exchanges to enhance people-to-people exchanges, and this year also marks the sixtieth anniversary of the Cultural Agreement of 1957.

India and Japan have come a long way since 1944, when the Japanese Army and Indian National Army (INA) unsuccessfully fought against the Allied Forces to retain Imphal and Kohima. While speaking on the theme “Relation between Japan and Manipur” at Imphal (in Manipur, India), Tsukamoto Katsumi, Director General of Fukuoda Prefecture, Japan, said, “Manipur can never be separated from the hearts of the Japanese as the State capital city is the home to mortal remains of many Japanese who sacrificed their lives during the Second World War.” He added, “If youths of Manipur and India and that of Japan can share their traditions and cultures, then the future will be bright”.

Decades later, in October 2008, the prime ministers of Japan and India issued “the Joint Declaration on Security Cooperation between India and Japan”. There are also a number of frameworks of security and defence dialogue between the two countries, including “2+2” Dialogue, the Defence Policy Dialogue, Military-to-Military Talks and Coast-Guard-to-Coast-Guard cooperation. India appreciated Japan’s regular participation in the Malabar Exercise and the two Defence Framework Agreements for the ‘Transfer of Defence Equipment and Technology’ and ‘Security Measures for the Protection of Classified Military Information’.

The two countries recently inked a nuclear deal – Japan’s first with a non-signatory to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). This would open up one of the fastest expanding power markets to vendors struggling for growth after the Fukushima disaster. Japan has been made a regular participant in the Malabar Naval Exercises in the Bay of Bengal, which also involves the United States.

Japan acknowledged the need to align its “Free and Open Indo-Pacific Strategy” with India’s Act East Policy and “strengthen people-to-people and cultural ties through enhanced teaching of Japanese language in India and collaboration in the fields of tourism, civil aviation, higher education, women’s education, skills development and sports”. In the joint statement during Abe’s September visit, both prime ministers welcomed cooperation for the development of India’s North Eastern Region (NER), which will also be a concrete symbol of developing synergies between India’s Act East Policy and Japan’s Free and Open Indo Pacific Strategy. This cooperation will mainly be focused on areas of key infrastructure, including road connectivity, electricity, water supply and sewage, social and environmental sustainability, afforestation and community empowerment, and people-to-people exchanges including the “IRIS Program”, inviting the youth from the NER to Japan. As both the leaders took note of the historically highest ever amount of ODA loan provided through the Japan International Cooperation Agency (JICA) in the last two consecutive years, Modi expressed appreciation of Japan’s ODA to the North East Road Network Connectivity Improvement Project that will significantly contribute to the socio-economic development of India’s Northeast.

Furthermore, the setting up of the India Japan Act East Forum can enhance connectivity and promote developmental projects in the NER in an efficient and effective manner. In April 2017, JICA signed an agreement with the Indian government to provide over 67 billion yen ($610 million) for Phase I of the North East Road Network Connectivity Improvement Project. Amid a face-off with China in Doklam, India has demonstrated excellent diplomatic skill by involving Japan for a major infrastructure push in the strategic NER. Japan has reciprocated by rallying behind India over the dragging feud at Doklam. Japanese Ambassador to India Kenji Hiramatsu has conveyed his country’s willingness to extend co-operation to the state in areas like road connectivity, tourism, cleaning of Loktak Lake (in Manipur, India) and school education, sanitation and sewerage system in Scheduled Tribes areas and so on.

Both India and Japan are major Asian democracies and global powers. In the words of Prime Minister Abe, “Japan’s technology and India’s human resources are joining forces to unlock the potential of ‘monozukuri’ (manufacturing), and this potential is spreading to ASEAN, Africa, and the rest of the world. From Buddhism to the concept of zero, the people of Japan have profound respect for India’s important contributions, its civilisation and wisdom, in the history of mankind, Abe added.

Of course, economic cooperation is the cornerstone of the India-Japan relationship. India is tremendously special to Japan. The two countries have emerged as integral strategic partners and their growing convergence has become more significant with the Act East Policy of India.