Tokyo’s expanding defence exports mark a decisive shift from postwar restraint to proactive security statecraft in the Indo-Pacific
Breaking from its long-standing self-imposed bans on arms exports, Japan’s recent agreement with Australia to supply upgraded Mogami-class frigates marks a strategic inflection point, not just in Tokyo’s arms export policy, but in the evolving security architecture of the Indo-Pacific. Valued at US$10 billion, last month’s deal stipulates the first three frigates to be built in Japan, and the remaining eight in Australia under joint production arrangements.
More than a commercial contract, the deal with Australia reflects Japan's growing willingness to deploy defence exports as an instrument of statecraft to strengthen partners’ capabilities, build defence-industrial linkages, and contribute to a more networked regional deterrence posture.
The significance of the deal lies as much in its strategic context as in its scale. Australia’s decision to select Japan over other bidders, including Germany, signals a high degree of trust in Japan as a defence partner and underscores the convergence of their security interests. It also reflects a broader regional trend: Indo-Pacific countries are increasingly seeking to diversify defence procurement and deepen partnerships amid intensifying geopolitical competition.
More than a commercial contract, the deal with Australia reflects Japan's growing willingness to deploy defence exports as an instrument of statecraft to strengthen partners’ capabilities, build defence-industrial linkages, and contribute to a more networked regional deterrence posture.
This shift has not occurred in isolation but is the culmination of over a decade of gradual policy evolution. The 2014 relaxation of Japan’s arms export restrictions under Prime Minister Shinzo Abe marked a decisive departure from the long-standing principles established in 1967 and the revised 1976 guidelines, which effectively banned arms exports by stating that “the Government of Japan shall not promote ‘arms’ exports, regardless of the destinations”.
For more than four decades, these constraints confined Japan’s defence industry largely to the domestic market, limiting its scale and capacity for international collaboration. The 2014 policy revision introduced the Three Principles on Transfer of Defence Equipment and Technology, creating a framework for conditional exports under strict scrutiny. As the regional security environment grew complex, driven in large part by China’s rapid militarisation and assertive regional posture, Japan gradually broadened the scope of defence transfers in 2023 under the Kishida government.
The 2023 revision expanded export rules to allow finished lethal weapons produced in Japan under license from foreign defence firms to be exported to the licensing countries, such as the United States, which in turn could export them onward to third countries. Although this provision does not yet apply to the Global Combat Air Program (GCAP) involving Japan, Britain, and Italy, further adjustments are likely to enable third-country transfers in that domain as well. These changes reflect a growing recognition in Japan that rigid export controls are increasingly misaligned with both regional security requirements and domestic industrial realities.
Furthermore, in April this year, the Takaichi government effectively abolished earlier constraints that limited the transfer of finished defence equipment to five non-combative categories—rescue, transportation, warning, surveillance, and minesweeping. This revision significantly widened the scope of arms exports to include items such as warships, combat drones, and missiles to those countries that have signed defence equipment and technology transfer agreements with Japan.
These changes reflect a growing recognition in Japan that rigid export controls are increasingly misaligned with both regional security requirements and domestic industrial realities.
Defending her decision, Takaichi emphasised the importance of cooperation in an increasingly interconnected security environment, stating that “no country can now safeguard its own peace and security alone, making it necessary to have partners that support each other in areas including defence equipment”.
These policy changes are deeply rooted in the strategic vision of Shinzo Abe, who advanced the concept of a “proactive contribution to peace” to move beyond Japan’s postwar passive pacifism. Central to his vision was the idea that Japan should move beyond its postwar constraints and contribute more directly to maintaining a rules-based order.
China’s rise was a central driver of this transformation. As China grew economically and technologically under Xi Jinping, it also adopted a more assertive approach to territorial disputes, especially in the maritime domain. Japan has closely monitored these developments, while also facing frequent Chinese incursions into its maritime and territorial zones. In response, Japan has pursued a dual strategy vis-à-vis China: strengthening its own defence capabilities while supporting those of like-minded countries.
One approach adopted has involved extending support to countries facing similar challenges, initially focusing on non-lethal defence equipment. Another has involved building a network of security partnerships across the Indo-Pacific, as a counterbalance to China’s behaviour. Abe’s role in revitalising the Quadrilateral Security Dialogue (Quad), comprising Australia, India, Japan, and the United States, exemplifies this strategy.
Japan has pursued a dual strategy vis-à-vis China: strengthening its own defence capabilities while supporting those of like-minded countries.
New policies have reinforced these efforts. Going beyond its official development assistance (ODA), Tokyo introduced official security assistance (OSA) in 2023. Unlike ODA, which focuses on economic and social development, OSA was designed to assist like-minded and vulnerable countries in the Indo-Pacific region with military equipment on a grant basis. This program has expanded with the stated aim to “strengthen deterrence capabilities and shape a favourable regional security environment”.
Through its OSA and loosening restrictions on arms exports, Japan has sought to ease constraints on its defence manufacturers, who have long been limited to the domestic market, primarily serving the country’s Self-Defence Forces.
The deal with Australia illustrates how these policy shifts are beginning to translate into tangible outcomes. It also highlights the maturation of Japan’s defence industrial diplomacy. A decade ago, Japan’s unsuccessful bid to supply submarines to Australia exposed limitations in its approach, including inexperience in export negotiations and insufficient coordination between government and industry. The recent frigate deal suggests that Japan has grasped these lessons, adopting a more flexible model that includes local production and technology sharing.
Prolonged stagnation and shrinking demand in traditional manufacturing sectors have encouraged policymakers to view the defence industry as a potential source of growth and innovation. Creating new opportunities for technologically advanced Japanese firms overseas has been a key objective of the government. Equally important has been a shift in corporate attitudes. Longstanding business hesitancy, rooted in concerns about being perceived as merchants of death, has diminished in recent years, further boosting Japan’s defence export ambitions.
A decade ago, Japan’s unsuccessful bid to supply submarines to Australia exposed limitations in its approach, including inexperience in export negotiations and insufficient coordination between government and industry. The recent frigate deal suggests that Japan has grasped these lessons, adopting a more flexible model that includes local production and technology sharing.
Notably, there is evidence that Japan’s policy relaxation has been widely welcomed across the Indo-Pacific. Opposition, unsurprisingly, has largely come from the Chinese government, which has criticised the shift as “rapid remilitarisation” and “dangerous moves in military and security fields”. Such reactions underscore the broader geopolitical stakes of Japan’s evolving posture.
Japan has signed defence equipment transfer agreements with multiple Southeast Asian countries, some of which are potential buyers of Japanese systems. The Philippines, for instance, has shown interest in acquiring retired Abukuma-class destroyer escorts, while Indonesia has expressed interest in purchasing Japanese submarines. These developments suggest that Japan is seen as a credible and attractive supplier.
India emerges as another key partner in this landscape. New Delhi has expressed support for Japan’s revised arms export policy, reflecting shared strategic concerns and a commitment to a stable Indo-Pacific. However, translating political alignment into concrete defence trade has hitherto proven challenging. The failed negotiations over the Japan-made US-2 amphibious aircraft highlighted obstacles, including cost, technology transfer issues, and bureaucratic complexities.
Nevertheless, incremental progress continues. At a more modest level, India and Japan have signed a memorandum of understanding to co-develop UNICORN (Unified Complex Radio Antenna) masts for “fitment onboard Ships of Indian Navy (sic)”, which is a step forward. Recent reporting further suggests that, following its agreement with Australia, Japan may consider India as its next partner for co-developing Mogami-class stealth frigates. If realised, such a project could mark a turning point in Japan’s defence export trajectory and elevate India–Japan relations to a new high.
Despite these advances, Japan’s approach to arms exports is likely to remain gradual, selective, and calibrated, with a focus on trusted strategic partners. Structural constraints persist, including constitutional and legal limitations, risk-averse industry practices, and a divided domestic public on the issue, with opposition still outweighing support. These factors will continue to shape the pace and scope of Japan’s engagement in the global arms market.
Recent reporting further suggests that, following its agreement with Australia, Japan may consider India as its next partner for co-developing Mogami-class stealth frigates. If realised, such a project could mark a turning point in Japan’s defence export trajectory and elevate India–Japan relations to a new high.
Nevertheless, the broader trajectory is unmistakable. Japan is steadily positioning itself as a security provider, using defence cooperation and arms exports to deepen strategic alignment, respond to regional demand, and enhance collective deterrence. More importantly, it points to the emergence of a more interconnected Indo-Pacific security architecture, one in which capabilities, production, and strategic intent are increasingly shared among like-minded states.
Purnendra Jain is Emeritus Professor in the Department of Asian Studies at the University of Adelaide.
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Purnendra Jain is Emeritus Professor in the Department of Asian Studies at the University of Adelaide. Recipient of the Japanese Emperors Order of the Rising ...
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