Introduction

India’s growing economic strength in recent years has seen it adopting its foreign policy to increase its global influence and status and to meet the challenges of the 21st century. In the past few years, New Delhi has expanded its strategic vision, most noticeably in Asia, and has broadened the definition of its security interests. As a result, India-Japan relations have undergone a paradigmatic shift which has seen an attempt to build a strategic and global partnership between the two countries.

Background of India-Japan Ties

[I] Ancient times

The friendship between India and Japan 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.

[II] India’s freedom movement

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).

[III] Present times

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 realising pluralistic and inclusive growth of the region

Post cold war relations

The end of cold war and the collapse of the Soviet Union, and the inauguration of economic reforms in India seemed to mark the beginning of a new era in Indo-Japanese relationship.
India’s “Look East Policy” posited Japan as a key partner.
Japan being the only victim of nuclear holocaust, Pokhran –II tests of India in May 1998 brought bitterness in the bilateral relations where Japan asked India to sign NNPT.
Tokyo’s relation with India showed signs of an upswing when Prime Minister Yoshiro Mori came on an official 5 day visit to India in August 2000.

Recent developments in India-Japan Relationship

(1) India-Italy-Japan trilateral partnership

Recently, Italy has also begun to signal its intention to enter the Indo-Pacific geography.
It has done so by seeking to join India and Japan in a trilateral partnership.
Italy has become more vocal on the risks emanating from China’s strategic competitive initiatives.
On the Indian side, there is great interest in forging new partnerships with like-minded countries interested in preserving peace and stability in the Indo-Pacific.

(2) 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 Defense 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.

(3) Supply Chain Resilience Initiative

Recently India, Australia and Japan formally launched the Supply Chain Resilience Initiative. The initiative was launched to counter the dominance of China in the Global Supply Chain.
It aims to prevent disruptions in the supply chain as seen during COVID-19 pandemic.
The initiative will mainly focus on diversification of investment and digital technology adoption.

(4) Other MEA led-bilateral dialogues

The Act East Forum, established in 2017, aims to provide a platform for India-Japan collaboration under the rubric of India’s “Act East Policy” and Japan’s “Free and Open Indo-Pacific Vision”.
At the Second meeting of the Act East forum, both sides agreed to focus on expanding of Japanese language in North East, training of caregivers under Technical Intern Training Program (TITP), capacity building in area of bamboo value chain development and Disaster Management.
The inaugural India-Japan Space Dialogue was held in Delhi for enhancing bilateral cooperation in outer space and information exchange on the respective space policies.

(5) Currency Swap Agreement

Japan and India have entered into a $75-billion currency swap arrangement that will bolster the country’s firepower as it battles a steep drop in the rupee’s value.
A currency swap is an agreement between two parties to exchange a series of cash flows denominated in one currency for those denominated in another for a predetermined period of time.
The deal will help the two countries to swap their currencies for U.S. dollars to stabilise the rupee which has witnessed the steepest fall in recent years.

Areas of cooperation

(1) Economic and Commercial relations

Japan is regarded as a key partner in India’s economic transformation.
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.
India’s bilateral trade with Japan stood at US$ 16.95 billion in FY 2019-20. India’s imports during this period were US$ 12.43 billion and exports were US$ 4.52 billion.
India’s primary exports to Japan are petroleum products, chemicals, elements, compounds, non-metallic mineral ware, fish & fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn, fabrics and machinery etc.
India’s primary imports from Japan are machinery, electrical machinery, iron and steel products, plastic materials, non-ferrous metals, parts of motor vehicles, organic chemicals, etc.

Investment and Official Development Assistance (ODA)

From 2000 until September 2020, the Japanese investments in India cumulatively stands at around US$ 34.152 billion (Japan ranks fifth among the largest source of investment).
Japanese FDI during FY 2019-2020 increased to US$ 3.226 billion compared to US$ 2.96 billion in FY 2018-19.
The number of Japanese companies registered in India stands at more than 1460. Similarly, number of Indian companies operating in Japan is also increasing, with the number now over 100.
The Mumbai-Ahmedabad High Speed Rail, Western Dedicated Freight Corridor (DFC), Delhi-Mumbai Industrial Corridor (DMIC) with twelve industrial townships, Chennai-Bengaluru Industrial Corridor (CBIC) are some mega project with Japanese cooperation on the anvil.

(2) Security and Defence

India-Japan Defence and Security partnership has evolved over the years and today forms an integral pillar of bilateral ties.
QUAD: Formed in 2007 and revived in 2017 The Quadrilateral Security Dialogue (QSD, also known as the Quad) is an informal strategic dialogue between the United States, Japan, Australia and India.
The dialogue was paralleled by joint military exercises of an unprecedented scale, titled Exercise Malabar.
The diplomatic and military arrangement was widely viewed as a response to increased Chinese economic and military power.
In spite of the pandemic, complex exercises in all domains were conducted including MALABAR 2020, Japan India maritime exercise (JIMEX 2020) and PASSEX, showcasing the trust and interoperability between the navies.

(3) Strategic

After the cold war Japan looked out to extend its diplomatic options beyond US and India became the best option possible.
2+2 dialogue is taking place between the foreign and defence ministers of the two countries to deepen the global partnership.
It is also agreed to establish the India–Japan–United States trilateral dialogue on regional and global issues of shared interest.
Both countries also reiterated their determination to work together under the UNFCCC, WTO, etc.
Japan and India are working together to realize the reform of Security Council at the earliest.
There is a beginning of India-Japan-Australia trilateral dialogue to evolve an open, inclusive, stable and transparent economic, political and security architecture in the indo-pacific region.

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

The MOC on Digital Partnership envisaged cooperation in five sub-areas:

1) Start-up Initiative

2) Corporate Partnership

3) ESDM promotion

4) Digital talent exchange

5) R&D Cooperation

6) Security related strategic collaboration

(5) Disaster Risk Reduction

An Agreement on joint research in the field of Earthquake Disaster Prevention was signed between Fujita Corporation and Indian Institute of Technology, Roorkee (IIT-R).

(6) Skill Development

India-Japan MoC signed in 2016 to train 30,000 shop floor leaders over 10 years thereby also contributing to India’s flagship initiatives such as “Skill India” and “Make in India”.
Japanese companies have established 13 Japan-India Institute of Manufacturing (JIM) in India and 5 Japanese Endowed Courses (JEC) in Indian Engineering Colleges.

(7) Health-care

In view of the similarities and synergies between the goals and objectives of India’s AYUSHMAN Bharat Programme and Japan’s AHWIN, both sides consulted with each other to identify projects to build the narrative of AHWIN for AYUSHMAN Bharat.
Japan is supporting India to contain COVID-19 and mitigate its adverse socioeconomic impacts by extending budgetary support to the GoI and implementing emergency response programs for the health sector.

(8) Education Cooperation

As on December 2020, there were over 300 academic and research partnerships (including student exchanges) between more than 70 universities/institutes of Japan and around 105 universities/institutes of India.
These partnerships range from liberal arts to management & business studies, legal studies, international studies, linguistics, ayurveda, STEM including fast emerging frontier technologies.
The students & teacher exchange and scholarship programmes, especially short-term, are enabling a large number of Indian students and teachers to visit and experience Japan and vice versa.

(9) S&T Cooperation

Bilateral S&T cooperation was formalized through an Inter-Governmental Agreement signed in 1985.
Recent initiatives – three India-Japan Joint Laboratories in the area of ICT (AI, IoT and Big Data) and initiation of Dept. of Science and Tech (DST)-Japan Society for the Promotion of Science Fellowship Programme for the young researchers.

(10) Energy

The two sides have launched an Energy Dialogue to promote cooperation in the energy sector in a comprehensive manner.
The areas of cooperation include oil and natural gas, coal, electric power, renewable energy sources, energy efficiency and other relevant sectors.
In 2015, India and Japan reached on substantive Agreement on Cooperation in the Peaceful Uses of Nuclear Energy. India becomes the first non NPT signed country to do so.

What lies at the fulcrum of ties?

First of all, Japan is the most mature economy in this region. In terms of maturity, sophistication, and experience in international economic engagements, Japan excels every other country of the Indo-Pacific region, excluding the United States.
Its technological marvels, business strategies, and management skills are second to none.
Japan rarely hits the international headlines and it is actually Japan’s feebleness in the world of political advertisements.
Japan sooner than later will be a leading player in the political economy as well as security fields of the Indo-Pacific region.
Its aging population is a major concern and Japan very well acknowledges this fact. While increasing the domestic birth rate will always be important, it is a position to devise a new immigration policy that would largely benefit Indians.
Japan has the distinction of being the only foreign power that has been allowed to undertake infrastructure and other projects in India’s sensitive northeast.
Finally, Japan has never been an adversary of India and the current global as well as regional distribution of power and strategic scenario necessitate a deeper and expansive Indo-Japan strategic teamwork.

Way forward

Taking advantage of its considerable assets — the world’s third-largest economy, substantial high-tech skills, and a military freed of some legal and constitutional constraints — Japan is largely perceived as a natural ally to India.
At a time of global geopolitical flux, the two are among the important countries that have taken up the baton to champion freedom, international norms and rules, inclusivity, and free and fair trade.
If Japan and India continue to add concrete security content to their relationship, their strategic partnership could potentially be a game-changer in Asia.
The emphasis on boosting trade and investment must be balanced with greater strategic collaboration.
Both countries can contribute to the larger effort to build strategic equilibrium, power stability and maritime security in the Indo-Pacific.
India and Japan have forged a special relationship, which is set to strengthen and deepen in the coming years.