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Context

India and Japan are celebrating 70th anniversary of the establishment of diplomatic relations between the two nations.
This seven decade long journey has witnessed significant milestones and shared visions for the future.

The recent visit to India by Japanese PM Fumio Kishida for the annual summit laid out a roadmap for deepening the Special Strategic and Global Partnership between the two countries in a post-COVID world.

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) 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.

(2) 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.

(3) 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.

(4) 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

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.
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).
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

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.
Exercise Malabar: The dialogue was paralleled by joint military exercises of an unprecedented scale, titled Exercise Malabar.
In spite of the pandemic, complex exercises in all domains were conducted including Japan India maritime exercise (JIMEX 2020) and PASSEX, showcasing the trust and interoperability between the navies.

(3) Strategic

2+2 dialogue: It is taking place between the foreign and defence ministers of the two countries to deepen the global partnership.
Collaboration with the US: It is also agreed to establish the India–Japan–United States trilateral dialogue on regional and global issues of shared interest.
Global institutional reforms: Both countries also reiterated their determination to work together under the UNFCCC, WTO, etc. They are working together to realize the reform of UNSC Security Council at the earliest.
Indo-Pacific: 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) Others

Disaster management: 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).
Skilling and HRD: 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”.
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.
Nuclear Energy: 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?

Japan is the most mature economy: In terms of maturity, sophistication, and experience in international economic engagements, Japan excels every other country of the Indo-Pacific region, excluding the US.
Technological development: Its technological marvels, business strategies, and management skills are second to none.
Political neutrality: Japan rarely hits the international headlines and it is actually Japan’s feebleness in the world of political advertisements.
Key player in Indo-Pacific: Japan sooner than later will be a leading player in the political economy as well as security fields of the Indo-Pacific region.

Why Japan needs India?

Worrisome ageing population: 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 never been an adversary of India: The current global as well as regional distribution of power and strategic scenario necessitate a deeper and expansive Indo-Japan strategic teamwork.
India as a net security provider: The US and Japan need India as a stabilising force. India has the potential as a security provider in Southeast Asia for geo-strategic reasons.
India’s naval assets: India possesses enough naval capability to be projected as a strong naval power in the future.
Filling strategic vacuum: India can only fill the power vacuum created due to the declining US power. Japan and ASEAN alone do not have enough power to fill the power vacuum.

Why India needs Japan?

For India, developing a strategic relationship with other Asia-Pacific powers such as Japan might appear to be a no-brainer.

US needs Japan – India cooperation: The US needs an “ally” to maintain military balance in Asia because their naval power is declining and China’s naval power is rising.
Countering China: China has been expanding and intensifying its activities in its surrounding waters. This has caused a worry in Japan.
Uniting the Indo–Pacific: The Indo-pacific is not an integrated region. Most countries have been expanding while others are falling prey to China.
Infrastructure development: 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.

Limitations to bilateral ties

Geographical limitations: The two countries are too far apart to be meaningful partners in any confrontation between one of them and China.
China is too big to defeat: No partnership have the military muscle or diplomatic heft to achieve its objectives in countering China.
Lesser say at UNSC: At the diplomatic level, neither pulls the kind of power that can counter Beijing and this is not just because they are not UNSC members, unlike China.
Japan lacks military technology: Japan obviously has a very advanced high-technology industrial sector, its military industry is insignificant. It’s better not to invoke the DRDO.

Way forward

People to people contact: Although the Covid-19 situation remains challenging, people-to-people exchanges between two countries are also being advanced.
Cooperation in security: Cooperation has also taken great strides in the area of security, including joint exercises between the Japan Self-Defence Forces and the Indian Armed Forces.
Reaping the benefits of natural alliance: Taking advantage of its considerable assets — the world’s third-largest economy, substantial high-tech skills, Japan is largely perceived as a natural ally to India.
Looking East: If Japan and India continue to add concrete security content to their relationship, their strategic partnership could potentially be a game-changer in Asia.