Yoshihiko Noda may be the sixth Japanese prime minister that Manmohan Singh has had to deal with during his seven years at the helm of the Indian government, but, as Noda’s visit to India underlined, Indo-Japanese ties are gaining momentum. The two nations renewed a bilateral currency swap agreement, whereby Japan agreed to make $15 billion available to India to help it stabilise the rupee, which has witnessed a more than 16 per cent decline in its value this past year. Japan has also decided to invest $4.5 billion in a 1,483-km industrial corridor stretching from New Delhi to Mumbai and has promised $1.7 billion worth of loans for various infrastructure projects, including the expansion of Delhi’s metro railway. The talks between Prime Minister Singh and his Japanese counterpart were dominated by the enhancement of trade ties, UN reforms and civil-nuclear co-operation. Despite the budgetary tightening in Japan following the Fukushima disaster, India remains the largest recipient of Japan’s overseas development aid and Japan remains critical if India is to meet its infrastructural development targets in the coming years.
Both New Delhi and Tokyo have made an effort in recent years to put Indo-Japanese ties into high gear. India’s booming economy makes it an attractive trading and business partner for Japan as the latter tries to overcome its long years of economic stagnation. Japan is also reassessing its role as a security provider in the region and beyond — and of all its neighbours, India seems the most willing to acknowledge Japan’s centrality in shaping the evolving Asia-Pacific security architecture. Moreover, a new generation of political leaders in India and Japan view each other with fresh eyes, allowing for a break from past policies.
India’s ties with Japan have come a long way since May 1998, when Japan imposed sanctions and suspended its overseas development assistance over India’s nuclear tests. Since then, the changing strategic environment in the Asia-Pacific region has brought the two countries closer, culminating in Singh’s last visit to Japan last year, which resulted in a new road map to transform a low-key relationship into a major strategic partnership. While China’s rise figures in the evolution of Indo-Japanese ties, so, too, does the US attempt to build India into a major balancer in the region.
Both Japan and India rely on the security of the sea lanes for their energy security and economic growth. They have a shared interest in guaranteeing the free transit of energy and trade between the Suez Canal and the Western Pacific. With this in mind, they are developing maritime capabilities to co-operate with each other and other regional powers. The navies of the two now exercise together regularly. Interaction between their coast guards is increasing with a view to combating piracy and terrorism, and to co-operate on disaster relief. Japan feels that of all the region’s navies, only India’s can be trusted to secure the Indian Ocean sea lanes, vital for Japan’s energy security. It is also important for India to join hands with the much larger Japanese navy, Asia’s most powerful, to make sure that no adversarial power controls the regional waterways.
The talks on a civilian nuclear pact, however, seem to be going nowhere, with the two sides merely agreeing to speed them up. Japan continues to insist that India sign the Nuclear Non-Proliferation Treaty and the Comprehensive Test Ban Treaty before finalising such a bilateral agreement, but India has no intention of doing so given its long-standing concerns over what it sees as the discriminatory nature of these treaties. Meanwhile, the new nuclear liability law in India – which established higher financial liability limits for accidents than the industry standard and allows nuclear operators to sue suppliers – could also make greater civilian nuclear co-operation between the two countries more difficult to accomplish. Nevertheless, the push for an agreement will remain strong, as an India-Japan civil-nuclear pact would reinforce India’s return to the global nuclear market, while signalling both countries’ desire to build a partnership that reinforces regional stability.
Both India and Japan are well aware of China’s not-so-subtle attempts at preventing their rise. They are most clearly reflected in China’s opposition to the expansion of the UN Security Council to include India and Japan as permanent members. China’s status as a permanent member of the Security Council and as a nuclear-weapon state is something that it would be loath to share with any other state in Asia. India’s Look East policy of active engagement with Asean and East Asia remains largely predicated upon Japanese support. India’s participation in the East Asia summit was facilitated by Japan, and the East Asia Community proposed by Japan to counter China’s proposal of an East Asia Free Trade Area also includes India. While China has resisted the inclusion of India, Australia, and New Zealand in Asean, Japan has strongly backed the entry of all three nations.
The massive structural changes taking place in the geopolitical balance of power in the Asia-Pacific are driving India and Japan into a relationship that is much closer than many could have anticipated even a few years back. As Japan marks 60 years of its diplomatic ties in 2012, both New Delhi and Tokyo will have to be bolder in defining the terms of their engagement. India’s trade with Japan remains a paltry $15 billion, and the ambition of making it touch $25 billion by 2014 is hardly ambitious — especially compared to the Sino-Japanese trade which is expected to touch $340 billion in 2011. It is now time to translate the vision laid out by the two prime ministers into an effective policy framework that can help India and Japan realise the full potential of this very important bilateral relationship.
The writer teaches at King’s College, London