Context

India’s growing economic strength in recent years has seen it adapting 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

Prehistoric relations

India’s earliest documented direct contact with Japan was with the Todai-ji Temple in Nara, where the consecration or eye-opening of the towering statue of Lord Buddha was performed by an Indian monk, Bodhisena, in 752 AD.

Hinduism In Japan

Japan has indirect connection with Hinduism as four of the seven gods of fortune originated from Hindu deities named:
a) Benzaiten Sama (Sarasvati).
b) Bishamon (Vaiśravaṇa or Kubera).
c) Daikokuten (Mahākāla/Shiva).
d) Kichijōten (Lakshmi)
Other examples of Hindu influence on Japan include the belief of “six schools” or “six doctrines” as well as use of Yoga and pagodas.

Buddhism

Buddhism has been practiced in Japan since its official introduction in 552 CE.
The Indian monk Bodhisena arrived in Japan in 736 to spread Buddhism and performed eye-opening of the Great Buddha built in Tōdai-ji.
Ancient records from the now-destroyed library at Nalanda University in India describe scholars and pupils who attended the school from Japan. One of the most famous Japanese travellers to the Indian subcontinent was Tenjiku Tokubei (1612–1692).

Pre-World War-2 era – Rising Japan and Admiring India

In the rise of Japan from the late 19th century onwards, other Asian nations including India saw the promise of their own revival, hailing both the speed as well as content of Japan’s transformation.
The victory of Japan over Czarist Russia in 1904 and its skill in modern warfare stimulated nationalist movements in Asia against the colonial powers.
It put new confidence in the Indian National Congress of being able to wage and win the struggle against British rule in India.
When the Indian freedom struggle entered the swadeshi phase, Japan was seen as a source of new equipment and machines to increase the supply of home-made goods and displace foreign, mostly British, goods.
Trade links have existed between the two countries for more than a century. India replaced China as Japan’s main market in 1915, and retained that position until 1925 with cotton goods contributing the most to Japanese exports to India.

Independent India and Japan

Following WWII, during which Indian troops under the British Empire fought Japanese troops and Indians under the Indian National Army, fought the British with Japanese support.
India played a limited role in the Allied Occupation of Japan from 1945 to 1952.
Justice Radha Binod Pal was the lone dissenting voice on the war crimes tribunal set up to try Japanese war criminals, including Prime Minister Hideki Tojo.
Once India became independent, it expressed support for Japanese interests; its delegation at the Far Eastern Commission, for example, was sympathetic to Japanese concerns about rebuilding their nation and to encouraging Japanese industry and finance.
In 1949, the Indian delegation stopped pressing the question in the Commission regarding its share of reparations from Japan and proposed halting the reparations altogether, noting that the burden of making such payments told heavily on the living standards of the Japanese people.
India welcomed the relaxation of controls on Japan because of the flow of Japanese technical expertise to the rest of Asia.
Although 52 nations assembled to sign a peace treaty with Japan at San Francisco in September 1951, India did not participate because of its belief that the Japanese Peace settlement was part of the Cold War and the principal parties to it were more interested in enlisting support for their respective positions than to bringing peace to Asia.
The Japanese public responded favourably to India’s stand, particularly its opposition to linking the peace treaty with a bilateral security arrangement.
Given the high esteem in which India, and particularly Nehru, was held by most Japanese in those years, there was an appreciation that India had raised its voice and expressed dissatisfaction with the terms of the treaty in so far as they concerned the prospects for peace in Asia.

(Monument honouring Radhabinod Pal, at Tokyo’s Yasukuni Shrine, Japan)

The cold war and Indo-Japan Relations

Indo-Japanese political connections remained weak despite the exchange of ambassadors, mutual visits by goodwill groups and parliamentary delegations. India received its first Overseas Development Assistance (ODA) in 1958.
On specific international questions such as the Sino-Indian border conflict and the India-Pakistan wars, Japan showed no overt interest either in lending support to India or in opposing it.
The Japanese consciously treated India and Pakistan evenhandedly, participating in their economic development programmes without getting drawn into their disputes.
During the India-Pakistan conflict, Japan’s diplomatic moves in the UN were not necessarily hostile to India, but its action on the aid front could be interpreted thus.
Soon after the US suspended its aid to India, Japan also enforced an embargo on flow of credits and all fresh loans.
Despite the initial enthusiasm and high hopes of the 1950s, the Indo-Japan relationship failed to take off politically and the relationship was essentially dormant from the 1960s to the 1980s.
Nevertheless, during the Cold War period Japan became the largest bilateral donor to India. Thus, the relationship was primarily sustained by Japanese ODA.

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.
Keeping aside the sanctions due to nuclear tests a new global partnership over issues of worldwide importance was envisaged.

Areas of cooperation

Economic

Special economic partnership initiative (SEPI) was signed during PM Manmohan Singh’s visit in 2006.
The main elements of SEPI include Dedicated Freight Corridor-West (DFC-W) project, Delhi- Mumbai Industrial Corridor (DMIC) project, setting up of multi-product special economic zones/cluster, free trade and warehousing zones at select locations, and encouraging investment by Japanese companies in India, including through assistance in development of infrastructure relating to SEZs and industrial estates, etc.
ODA is being provided to infrastructural sectors like telecommunication, transport, Yamuna action plan and other projects in the power sector.
India and Japan has formed the Act East Forum wherein ODA is being provided for the development of north eastern states.
India and Japan are cooperating in smart community projects such as seawater desalinization project in Gujarat (Dahej), the model solar project in Rajasthan (Neemrana) and the gas fired independent power producer (IPP) project in Maharashtra.
The 1st India-Japan Ministerial-level Economic Dialogue was held at New Delhi on 30 April 2012. Economic interaction is the fundamental driver of the India- Japan relationship. India continues to be the largest recipient of Japanese Official Development Assistance (ODA). Disbursement of ODA in FY 2011-12 reached a record high of Yen 139.22 billion (approx. Rs 8497 crores). This is being utilized in several important projects across India, largely in infrastructure projects such as Metro rail projects in different metropolitan cities.
Japan also announced ODA loans totalling Yen 184.81 billion (approx. Rs 11,000 crores) to two projects, namely the Dedicated Freight Corridor Western Project Phase II and the Chennai Metro Rail Project.
The flagship India-Japan infrastructure projects made steady progress in 2012. The Dedicated Freight Corridor (West) between Mumbai and Delhi is on track for completion in 2017, during the current Plan Period. The Delhi Mumbai Industrial Corridor (DMIC) Project has moved ahead with the Cabinet approving a 26% equity stake in the Special Purpose Vehicle DMIC Development Corporation (DMICDC) by the Japan Bank for International Cooperation (JBIC) on 23 August 2012.

Trade

There is Japan India strategic dialogue on economic issues which reviews the current status of bilateral economic issues from time to time.
CEPA being one of the most comprehensive of all such agreements concluded by India as it covers more than 90% of the trade , vast gamut of services, rules of origin, investment, intellectual property rights, customs and other trade related issues.
In 2012-2013 India-Japan bilateral trade touched US$ 18.6 billion.
RBI and Bank of Japan signed a 3 year bilateral swap agreement (BSA) amounting to USD 50 Billion for addressing short term liquidity issues, financial market stability as well as supporting bilateral trade.
The two countries have reaffirmed their commitment to cooperate in the commercial production of the rare earths by the Indian and Japanese enterprises.
Avoidance of double taxation and the prevention of physical evasion with respect to taxes on income were signed between India and Japan.

Investment

Japan is currently ranked sixth in the foreign direct investment (FDI) flows to India.
A total of US$ 4.63 billion was invested by Japanese companies in India between 2000-2010.
Japan Plus was established by the government of India in October 2014 to further enhance the investment and assist Japanese companies in India.
3.5 trillion Yen of public and private financing to India in 5 years under the Japan-India Investment Promotion Partnership.
Japan is also financing bullet train project between Mumbai and Ahemdabad.

Security and Defense

The two nations have frequently held joint military exercises and co-operate on technology. India and Japan concluded a security pact on 22 October 2008.
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.
Japan India maritime exercise (JIMEX) was conducted off Japanese coast in January 2012.
Indian Navy participated in the JMSDF fleet review 2015.

Strategic

After the cold war Japan looked out to extend its diplomatic options beyond US and India became the best option possible.
In addition being a big economic giant, there similar democratic political systems, non western societies, desire to gain permanent seats in the UN Security Council and security environments are all the factors two countries can use to build a strong strategic alliance.
2+2 dialogue is taking place between the foreign and defense 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 United Nations framework convention on climate change (UNFCCC), WTO.
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.

Cultural

The two nations announced 2007, the 50th anniversary year of Indo-Japan Cultural Agreement, as the Indo-Japan Friendship and Tourism-Promotion Year, holding cultural events in both the countries.
One such cultural event is the annual Namaste India Festival, which started in Japan over twenty years ago and is now the largest festival of its kind in the world.
At the 2016 festival, representatives from Onagawa town performed, as a sign of appreciation for the support the town received from the Indian Government during the Great East Japan Earthquake.
On 10 April 2006, a Japanese delegation proposed to raise funds and provide other support for rebuilding the world-famous ancient Nalanda University, an ancient Buddhist centre of learning in Bihar, into a major international institution of education.

Energy

The two sides in 2015 reached an agreement on cooperation in the peaceful uses of Nuclear energy. India became the first Non proliferation country to do so.
India rare Earths Limited (IREL) and the Toyotsu Rare Earths India (TREI) a subsidiary of Toyota-Tsusho Corporation (TTC) , Japan has an agreement of supply of mixed rare earth chloride.

Issues

1. Hindrances in trade/ Investment relations

Though India and Japan have come a long way in their economic cooperation, that still is a penny when compared to the China-Japan economic ties.
Compared to the US$ 300 billion trade with China, India-Japan trade still languishes at mere US$15 billion.
Japanese investors lament lack of clarity in the policy guidelines, labor laws, tax laws, legal and regulatory framework.
For Japanese corporations some other inhibiting factors are differences in business practices, environment and culture etc.

2. Limited Defense cooperation

India and Japan defense relations after multiple defense exercises and agreements are primarily focused and revolve around China.
Japan does not give major importance to India when it comes to Indo-China border issues or Indo-Pak border conflicts.
There is hardly any exchange or procurement of defense equipment or technology from Japan.

3. 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.
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.

4. 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

1) Continuation of balancing security policy

First, one can expect a continuation of the balancing security policy against China that began in 2014.
Crucially, India’s clashes with China in Galwan have turned public opinion in favour of a more confrontational China policy.
In just a decade, both countries have expanded high-level ministerial and bureaucratic contacts, conducted joint military exercises and concluded military pacts such as the Acquisition and Cross-Servicing Agreement (ACSA) logistics agreement.
Both countries need to affirm support for a Free and Open Indo-Pacific and continued willingness to work with the Quad.
Both countries need to take stock of the state of play in the security relationship while also pushing the envelope on the still nascent cooperation on defence technology and exports.

2) Expanding cooperation in various sectors

The two powers will look to expand cooperation in sectors such as cybersecurity and emerging technologies.
Digital research and innovation partnership in technologies from AI and 5G to the Internet of Things and space research has increased between the two countries in the recent past.
There is a need to deepen cooperation between research institutes and expand funding in light of China’s aforementioned technology investment programme.
Issues of India’s insistence on data localisation and reluctance to accede to global cybersecurity agreements such as the Budapest Convention needs to be discussed.
Defense ties need to be made more stable. There should be more exchange of defense equipment and technologies.
Focus must just not be on countering China but helping each other in every state and frame.

3) Economic ties

Economic ties and infrastructure development are likely to be top drawer items on the agendas of New Delhi and Tokyo.
Though Japan has poured in around $34 billion in investments into the Indian economy, Japan is only India’s 12th largest trading partner.
Trade volumes between the two stand at just a fifth of the value of India-China bilateral trade.
India-Japan summit will likely reaffirm Japan’s support for key manufacturing initiatives such as ‘Make in India’ and the Japan Industrial Townships.
Further, India will be keen to secure continued infrastructure investments in the strategically vital connectivity projects currently under way in the Northeast and the Andaman and Nicobar Islands.

4) Joint strategy toward key third countries

In years past, India and Japan have collaborated to build infrastructure in Iran and Africa.
Both countries have provided vital aid to Myanmar and Sri Lanka and hammer out a common Association of Southeast Asian Nations outreach policy in an attempt to counter China’s growing influence in these corners of the globe.
However, unlike previous summits, the time has come for India and Japan to take a hard look at reports suggesting that joint infrastructure projects in Africa and Iran have stalled with substantial cost overruns.
Tokyo will also likely try to get New Delhi to reverse its decision not to join the Regional Comprehensive Economic Partnership.

5) Nuclear cooperation

Both the countries must work to begin the exchange of nuclear fuel for the energy sector that has been stopped after the Fukushima incident.
And not just that, other energy cooperation and agreements must be signed to increase the flow of fuel and equipment for the benefit of the energy and other sectors related to nuclear energy.

References

The mint
Mea.gov.in
Orfonline.org
www.wikipedia.com
The global post
Rajya sabha Tv
Official Japan archives