India-Japan Ties: Tokyo Must Move Forward on Nuke Deal to Realise Strategic Potential

Prime Minister Narendra Modi’s just concluded visit to Japan has been successful on various counts. Politically, the India-Japan relationship has been solidified; economically, prospects of major Japanese investments in India have improved; on the security front, enhanced understandings should give substance to defence cooperation in the future. Above all, the visit has been a public relations success, with Modi revealing a capacity to engage even foreign audiences with ease, dexterity and aplomb, and presenting a captivating image of an Indian Prime Minister that for long the public is not familiar with.

Japan, even if stagnating economically for over two decades, is still the world’s third largest economy. Despite India being the large recipient of Japan’s Official Development Assistance (ODA), Japan’s trade with India has been a modest $16 billion and its investments in the country since 2000 have been equally unimpressive at around the same figure. Even South Korea has done better in India than Japan, while with China our bilateral trade, however skewed in China’s favour, is four times more.

With Modi giving primacy to development, the economic part of the visit was obviously uppermost on his mind. Japan has the funds and technology, apart from the political will under Prime Minister Shinzo Abe, to help Modi realise his development goals for India. No other country combines all these three attributes to the same degree. Indeed, Abe’s vision of an economically and politically resurgent Japan fits in with the reinforced relationship that Modi seeks with that country. Japan is already involved in major infrastructure projects in India, such as the Delhi-Mumbai and Chennai-Bengaluru Industrial Corridors and the Western Dedicated Freight Corridor, apart from the Delhi Metro project.

Modi’s five-day visit has produced a commitment by Abe to invest $33.5 billion in India in the next 5 years, a sum apparently much higher than what Japan announced in the past during the visit of a foreign leader. The target areas are smart cities, electronics industrial parks, high speed rail lines, Ganga clean-up, clean energy, skill development, water security, food processing, agricultural cold chains etc. To develop India’s manufacturing base and upgrade its poor infrastructure, which, in turn, is necessary for its economic growth and competitiveness, Japan’s partnership becomes vital.

As India and Japan are major oil and gas importers, the intention to explore a higher level of “strategic collaboration” in the global gas and oil market, including joint procurement of LNG and promoting flexible LNG markets, including relaxation of destination clauses, is important for India to deal with the differential prices that Gulf suppliers charge Asian and western buyers.

Naturally, announcements are one thing, translating them into concrete outcomes is another. The latter would require an overhaul of our internal decision making processes, with improved coordination under more effective leadership. Modi has promised the Japanese a red carpet instead of red tape, but, more importantly, going beyond rhetoric, he has promised a management team in the Prime Minister’s Office (PMO), with two Japanese nominees, to facilitate processing of projects. Now that the target has been set, the follow-up will be watched closely by all sides.

While there are no contentious political issues between India and Japan, the political backdrop of Modi’s visit was important at various levels. The serious deterioration of Japan-China ties over the Senkaku islands, which is an outcome of China’s increasing assertiveness and has stoked tensions with other Asian countries too, is clashing with Abe’s ambitions to restore Japan’s global standing. On the other hand, China seeks to subdue Japan with the aim of steadily exposing the “unreliability” of the US-Japan defence ties and forcing the region to reconcile to its eventual hegemony over it.

US’s economic and financial melding with China constrains its ability and desire to contain China. While still relying on the US for protection, Japan has to build protective walls in conjunction with other Asian countries that also feel threatened by China’s rise. India, with its own serious territorial issues with China which the latter is disinclined to resolve, has a community of interest with Japan in putting constraints on China’s erratic behaviour through defensive dispositions. Neither country wants a confrontation with China: Japan has, in fact, a far deeper economic relationship with China than we would forge even if all of Japan’s proposed investments in India materialises.

Modi’s visit has thrown up many indications of ‘a meeting of minds’ with Japan on security issues, signified in particular by the announcement of a Special and Global Strategic Partnership between the two countries. Japan has wanted to upgrade the strategic relationship with India to a higher level and India has responded, even though Japan is a US ally. The only other country with which India has a “Special and Privileged Partnership” is Russia, but the political context of that is altogether different. The Tokyo Declaration carries many significant messages that China would have noticed, saying, for example, that “a closer and stronger strategic partnership between India and Japan is indispensable…for advancing peace, stability…, in particular, in the inter-connected Asia, Pacific and Indian Ocean Regions.”, or, that “Prime Minister Modi supported Japan’s initiative to contribute to peace and stability of the region…”, or, further, that “The two Prime Ministers affirmed their intention to engage with other countries in the region and beyond to address the region's challenges…”. These are precisely the points on which China is hostile to Abe.

The nods towards the US in the Tokyo Declaration are apparent in the expression of satisfaction “with progress in official level trilateral dialogue among India, Japan and the United States” and the hope “that this would lead to concrete and demonstrable projects to advance their shared interests and that of other partners”. This is clearly signalling a community of interest among not only these three countries but others in the region too. The Japanese wanted this dialogue to be raised to the Foreign Minister’s level, but India has agreed only to “explore” this possibility, not wanting to go too far too quickly. The willingness to “explore the possibility of expanding, at an appropriate time, their consultations to other countries in the region” suggests a revival of a Quadrilateral Plus dialogue in the future with Australia, Vietnam and others as participants.

The Tokyo Declaration also says India and Japan 'affirmed their shared commitment to maritime security, freedom of navigation and overflight, civil aviation safety, unimpeded lawful commerce, and peaceful settlement of disputes in accordance with international law”, in a clear allusion to China’s claims in the South China and East China Seas. Importantly, India has agreed to “regularise” Japanese participation in the India-US Malabar naval exercises that Japan has been seeking. The Declaration also speaks of Japan's cooperation for enhanced connectivity and development in Northeast India and linking the region to other economic corridors in India and to Southeast Asia- which would be a competitive project with the Bangladesh-India-China-Myanmar (BCIM) corridor that China is pushing.

Modi telling a Tokyo symposium that “Everywhere around us, we see an 18th century expansionist mindset -- encroaching on another country, intruding in other's waters, invading other countries, and capturing territory”, has invited some criticism as unnecessary China-baiting. Modi had, in fact, chided China for expansionism during his election campaign in Arunachal Pradesh, and to that extent he was being consistent. More to the point, however, he also told the Japanese journalists that his government was resolved “to utilise the full potential of our Strategic and Cooperative Partnership with China” and that he intended to use the relationship forward. He modulated the talk about rivalries by adding that “India, Japan and China, as major countries in Asia, have many common interests and we need to build on them to convert ours into an Asian Century by working together.” The totalities of his statements have to be seen, and this will not escape the Chinese. In any case, to be so defensive about China’s sensitivities is unnecessary given China’s relationship with Pakistan that remains deeply injurious to our strategic interests, besides its own assertive claims on Indian territory.

China is attacking Japan for revived militarism under Abe. India, however, has a different view, and is interested in forging closer defence cooperation with it. An MOU on defence cooperation and exchanges was signed during the visit. In this connection, the decision by Japan to remove six of India’s space and defence-related entities from its Foreign End User List was appreciated by Modi, with both sides looking forward to enhanced trade and collaboration in high technology. Japan is keen to sell its amphibious aircraft US 2 to India as a civilian platform, whereas India seeks a military platform, but on this Japan continues to hedge because of its self-imposed restrictions on export of defence equipment. A Joint Working Group will continue to examine the proposal.

On the sensitive issue of a civilian nuclear deal with India, Japan continues to drag its feet for unconvincing reasons. Japan may have special sensitivities in matter nuclear but has no compunction in accepting nuclear weapons protection from the very country that used such weapons against it. If Japan can overcome this order of sensitivity, then India-related sensitivities seems more a question of fixed mindsets, especially in the Japanese bureaucracy. There is clear incompatibility between the forging of a “special and global strategic partnership” and the reluctance to lift civilian nuclear sanctions on India. This puts India in an inferior position vis a vis China, more so as China continues to violate its (Nuclear Suppliers Group) NSG commitments by engaging in nuclear cooperation with Pakistan that has neither signed the (Non-Proliferation Treaty) NPT nor the Comprehensive Test Ban Treaty (CTBT). Unfortunately, the American non-proliferation die-hards, unhappy with the Indo-US nuclear deal under President Bush, seek to use the Japanese to extract additional concessions from India on testing and reprocessing. Until Japan moves on the nuclear deal, the strategic potential of our relationship will remain inhibited. The Tokyo Declaration merely repeats past formulations by asking the officials of the two sides “to further accelerate the negotiations with a view to concluding the Agreement at an early date”. One hopes that by the time of the next India-Japan summit in 2015, this outstanding issue will be finalised. On the positive side, the Japanese have committed “to work together for India to become a full member in the four international export control regimes: Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement and Australia Group”.

Abe made extraordinary personal gestures to Modi during the visit, the significance of which should not be underestimated. Modi voiced his “confidence, excitement and optimism” about India-Japan relations, signifying that beyond the personal chemistry between the two leaders, tangible national interests are bringing the two countries together.