India Japan Relations

India and Japan have come closer only after 2000 when Japan-India Global Partnership was established. In 2006, it was upgraded to the “Strategic and Global Partnership”. Today Japan is noted for its assistance and collaboration in big projects including Dedicated Freight Corridor (DFC) Project, Delhi-Mumbai Industrial Corridor project (DMIC), Bengaluru-Chennai High Speed Railway project as well as many ODA projects like Delhi Metro, High speed train etc. Today, India is no. 1 recipient of Japanese ODA. The important India-Japan topics are as follows:

Strategic Components in Indo-Japan Relations

G4 affinity

Both India and Japan have common objective of securing a permanent seat in UNSC and the two countries have supported each other in this context. Together with Germany and Brazil, they make the G4 nations which support each other’s bids for permanent seats.

The China Factor

In most sectors of the foreign affairs, both India and Japan have an independent policy towards China. What makes them dependent on each other is each country’s security policy towards China mainly because of China’s proactive or even aggressive politico-military posture throwing shadows over not only these two countries but other countries of South-East Asia.

The ‘Hikaku San Gensoku’ principles and Nuclear Cooperation

The civil nuclear cooperation between the two countries has not been realized so far mainly because India does not fit into Japan’s ‘Hikaku San Gensoku’ or three non-nuclear principles. These refer to a Japanese parliamentary resolution which has guided Japanese nuclear policy since their inception in the late 1960s. The basic tenet of these principles is that Japan shall neither possess nor manufacture nuclear weapons, nor shall it permit their introduction into Japanese territory. These principles were outlined by Prime Minister, Eisaku Sato in 1967 and became the cornerstone of Japan’s national policy after the World War II.

The civil nuclear cooperation process between the two countries started with a joint statement signed by then Prime Minister Manmohan Singh and then Japanese Prime Minister, Shinzo Abe in 2006. Under this statement, Japan made a commitment to India to enhance civil nuclear energy cooperation under appropriate IAEA safeguards. However, because of the ‘Hikaku San Gensoku’ principles and strong public sentiment against nuclear cooperation with Non-NPT signatory countries like India, Japan’s approach in this area is quite slow. Japan took almost five years to move from commitment to negotiation stage which has started in August 2010. The challenges to the civil nuclear deal also come from the Japanese anti-nuclear lobbies and the media which has openly expressed concerns about the deal. They criticized government for promoting negotiations on a nuclear agreement with India Non-NPT member country with nuclear weapons.

This apart, in the proposed agreement, Japan has focussed on a nullification clause, which means that Japan would stop Nuclear Cooperation of India conducts a nuclear test. Though India has put a self moratorium, but then it is not enough for Japan to be satisfied.

The Economic Relations

India and Japan have significantly strengthened their bilateral relations in recent years in all spheres. On the economic front, the two countries have launched a Special Economic Partnership initiative under which all the flagship programmes such as FDC, DMRC, Delhi Metro are being funded from Japan’s JICA. The two countries have also signed a Comprehensive Economic partnership Agreement in 2011 to boost bilateral trade. While India is a huge market for Japanese products, India also needs Japanese capital, technology and investments.

However, so far the economic relations are below than their potential. There are several reasons for the same. Firstly, Japanese investors are held back by India’s complicated bureaucracy and poor physical infrastructure. Secondly, Japanese companies are generally cautious about their overseas investments. It’s worth note that the Japanese had bitter experiences in the 1980s with real estate and in the 1990s with technology companies. Due to this, the Japanese firms are somewhat risk averse. These two factors have ensured that both Korea and China are ahead of Japan in market penetration in India. Except for far-sighted and bold business leaders like Osamu SUZUKI of Suzuki Motors Co., the Japanese business community tends to move cautiously to unaccustomed markets.  In Asia they first concentrated their operations to South-East Asia, then to China. As globalization accelerates and competition becomes stronger in established markets, Japanese corporations started to explore new frontiers. India started to attract attention only after the end of cold war when India began to reform and deregulate in foreign trade and investment policy. Thirdly, after the end of the Cold War, the Japanese economic engagement in India was accelerating in 1990s, when nuclear tests were conducted in India in 1998. These halted the positive trend. Only after 2000, when the Japan-India Global Partnership was declared that Japanese businesses restarted to move into India. Fourthly, there needs to be free movement of professionals between the two countries which Japan is reluctant to provide. Fifthly, financial assistance under Japan’s ODA (Official Development Assistance) requires the projects are given to Japanese companies. This is sometimes a problem and does not allow competitive bidding between several contractors including Indians. Sixthly, the CEPA needs to be renegotiated to bring more products and services under its ambit.

Comments