Originally Published 2014-09-06 00:00:00 Published on Sep 06, 2014
Having historical ties that date back to Nehru and Abe's grandfather Nobusuke Kishi, both India and Japan and their leaders are aware that if the 21st century belong to Asia, India and Japan are the two nations that could really shape and guide this progress.
New dynamism in India-Japan relations

When Asia's largest and richest democracies get together, they are bound to make a strong headway into a number of large issues that have come to the forefront - security, economic and political. Both Abe and Modi have been expected to revive the economic fortunes of their respective nations, as well as strengthen their strategic partnerships with likeminded states. With the changing dynamic across Asia, Modi made a four day visit to Japan (August 30 - September 2), his first as Prime Minister of India.

This visit was set to cover a number of issues from both sides - ranging from the India- Japan Civil Nuclear Deal, negotiations on the purchase by India of the US-2 amphibious aircraft, the possibility of deepening the economic partnership, and also the role that these two great Asian nations will play in shaping the geopolitical events that are currently unfolding in the Asia Pacific region. An assertive China is always in the talks, and with both nations facing territorial spats with China, this visit proved crucial for Abe and Modi to reaffirm faith in each other.

Having a special rapport that dates back to 2007, Abe has always been keen to engage with Modi. With the US influence perceived to be declining in the Asia pacific region, and an assertive China that has been flexing its muscles, now would be the appropriate time. The bilateral talks held between the two countries underlined the importance of a 2+2 dialogue inorder to build their strategic partnership. Building on this, their foreign and Defence Secretaries were directed to intensify this dialogue.

The sale of the US-2 amphibious aircraft to India's navy, which would be Japan's first overseas military sale in over fifty years, is in progress. Another major step taken was Japan's consent to lift the ban on Hindustan Aerospace Limited (HAL) and five other Indian entities which will enable these companies to have cooperation with Japanese firms, including transfer of technology. The lift in the ban of these exports was welcomed by Modi as signal of trust from Tokyo. However, the main setback for India was with regard to the civil nuclear deal. Modi was unsuccessful in convincing the Japanese Government which has concerns regarding India's non signatory status to the Non proliferation Treaty.

Whether in reference to the latest round of Chinese aggression or the current international scenario playing out in the Asia Pacific, Modi and Abe must continue to push forward as two great nations that have the capability of shaping a strong and stable 21st Asian Century. Modi made clear in his address to Japanese Industrialists that expansionism would never lead to progress, pleasing Tokyo with these statements, Modi continued to highlight how some countries "encroach", "enter seas", and "capture other's territory", and many have taken this as a reference point to recent incidents of Chinese aggression.

China is no stranger to territorial disputes with either Japan or India - in 2012 in the East China Sea, it established an Air Defense identification Zone (ADIZ), causing great dissatisfaction to Japan and the Sino-India border has witnessed numerous incidents of the Chinese crossing the Line of Actual Control. The Tokyo declaration has lent "new dynamism" with both leaders agreeing to elevate their ties to that of a Special Strategic Global Partnership, further enhancing defence cooperation.

Economic aspect

The Economic angle saw India reaching out. On the Indian front Modi was keen on providing the Japanese with a more business friendly India. The last three years have seen Japanese firms investing more in Indonesia and Vietnam than India. Understanding the importance of Japanese Foreign Direct Investment in India is crucial and against this backdrop bi-lateral talks were held. Abe propelling his concept of Abenomics, promised to invest 35 billion dollars in Indian public and private investment and financing. This is to be done over the next five years. Other major steps signalling closer economic ties between the two countries are Japan's decision to provide financial, technical and operational support to introduce the Shinkansen high speed railway system on the Ahmedabad-Mumbai route, and the decision to make Varanasi a "smart city".

The Bilateral talks did favour Japan on two accounts. The first being that both countries decided to jointly produce rare- earth metals for export to Japan which would then ease Japanese dependence on China for Earth Metals. On the second front, Modi promised Japanese Investors "red carpet, not red tape". In doing so he is pushing to free the industrial corridor of this red tape, which has proved to be a huge hindrance for Japanese investors looking to invest in India.

Showing signs of progress, Modi greatly encouraged the Japanese to start investing in India, stating that India is ready to provide them with anything they need. Modi has also agreed to set up a special management team under the PMO to ensure a non-discriminatory decision making process. He also encouraged Japan to nominate two people and be a permanent part of their decision making process. These come at a crucial time where statistics point to the need for larger investment from Japan in India. In 2013, Japanese investment in India struggled to reach the 16 billion dollar mark. Doubling this over the next five years would be a crucial step for the world's second and third largest economies.

With Japan wilfully building its strategic partnerships with the nations in the south east - Vietnam, and Philippines, one can only sense the growing urgency that has arisen out of the need to constrain China, and prevent a Sino-centric Asia. Having historical ties that date back to Nehru and Abe's grandfather Nobusuke Kishi, both nations and leaders are well aware that if the 21st century was to belong to Asia, India and Japan are the two nations that could really shape and guide this progress.

With a promising future in the next five years, India should continue to focus on its 'Look East policy', and as stated by Prime Minister Modi, Japan should reciprocate with a 'Look at India policy'.

(Vindu Mai Chotani and Sruthi R are Research Interns at Observer Research Foundation, Delhi)

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.


Kiran Sabnis

Kiran Sabnis

Kiran Sabnis Co-Founder &amp: Director 2Dot47 Consulting Pvt. Ltd.

Read More +