India-Japan Relations

India-Japan Relations

This article deals with ‘India-Japan Relations.’ This is part of our series on ‘International Relations’ which is important pillar of GS-2 syllabus . For more articles , you can click here

Brief History

Till Independence

  • The relations between India and Japan can be traced back to the 6th century when Buddhism reached Japan .
  • The Japan- India Association was set up in 1903, post which the direct political exchanges began .
  • Rabindranath Tagore had close relationship with Okakura Kakuza .
  • SC Bose sought Japan’s help in his fight against Britishers . Azad Hind Fauz was the brainchild of Japanese Major Fujiwara.
  • The sole dissenting voice of Judge Radha Binod Pal at the War Crimes Tribunal struck a deep chord among the Japanese public that continues to reverberate to this day .

Post Independence relations

  • The diplomatic relations between the two countries began with the signing of Japan’s Peace Treaty with India in 1952, after the end of World War II.
  • India was one of the first countries to extend diplomatic ties, with the invitation to the Asian Games held in New Delhi in 1951. The relations were further strengthened by the mutual visits of Japanese Prime Minister Nobuke Kishi and Jawaharlal Nehru.

Cold War Period

  • The relations between the two countries suffered a setback during the cold war years, as Japan aligned with the  United States while India chose to adhere to Non-alignment policy.
  • Further, the relations were hampered when Japan took a neutral stand during the Sino-Indian border war of 1962.
  • Japan’s economic engagements with East and South-East Asian nations deepened during the 1970s and 1980s  .  Due to the domestic ferment and problems India had during the Cold War, Japan always perceived India as a chaotic and desperately poor nation, having no potential to be a partner in the near times.
  • During this period, nothing substantive came out till fall of USSR barring Suzuki’s investment  .

1990 – 1998

  • Two events had marked impact on Indo-Japanese relations & these  were 
    • Fall of USSR leading to end of cold war .
    • Process of liberalisation started in India .
    • India began to improve its relations with the USA. This also led India to improve its relations with other allies of the USA .
  • Japanese Overseas Development Assistance (ODA) started  to flow which helped to plug the gaps in economic development .
  • 1991 : Japan was among the few countries that bailed India out of the Balance of Payment crisis .
  • 1993 : Narsimha Rao’s Look East policy started &  played important role in shaping India’s ties with Japan .
  • Till 1998, bonhomie was seen in bilateral relations between India & Japan .

Pokharan II Nuclear Explosion & Japanese Reaction

  • Nuclear tests were conducted during  Atal Bihari Vajpayee’s regime  in 1998 . 
  • After the test, Japan became a vocal critique of India at the regional and international level. Japan even went on to cut its economic aid to India. It was natural for Japan to condemn such foreign policy behaviour as it had been the only nation in the world to have witnessed the horror of an atomic bomb attack first-hand. Along with that, as Japan enjoyed protection under the nuclear umbrella of the US, it perceived a new nuclear power as a threat to its own order.
  • This marked the lowest point in the Indo-Japanese bilateral relations . Japan pressurised India to roll back its nuclear program .

Beginning of New Era

  • PM Yoshiro Mori  visited India in 2000 & signed a landmark treaty called ‘ Global Partnership in 21st Century ‘.  Subsequently, Japanese sanctions were lifted in 2001 .
  • India is the only country with which Japan has  Annual Summit Meetings alternating between  Delhi & Tokyo  .
  • 2011: India and Japan signed CEPA (Comprehensive Economic Partnership Agreement) .
  • 2014 : Prime Minister Shinzo Abe was the chief guest at India’s Republic Day parade.
  • 2017 : Shinzo Abe visited Ahmedabad and  Shinkansen (Bullet Train) project funded by Japan was inaugurated by him. The railway operation would commence in 2023.
  • 2020 :  Yoshihide Suga became the new Prime-Minister of Japan (after Shinzo Abe voluntarily retired due to his health condition) . Suga is expected to continue policies of Shinzo Abe and maintain good relations with India . 

Different Aspects in Indo-Japan Relations

1 . Export -Import

  • Japanese brands such as  Sony, Yamaha, Honda and Toyota have become household names in India .
  • Suzuki’s partnership with the Indian automobile company – Maruti  is the largest Indian car manufacturer .
  • India and Japan signed CEPA  in 2011 .  India feels the CEPA is an alliance between Japanese technology and Indian labour force. Under the provisions of CEPA,  94% tariffs were eliminated between India and Japan. As a result of CEPA, bilateral trade between two countries increased  to  $17.6 billion (2018-19).
  • India exports petroleum products, iron ore , chemicals, fish, clothing and machinery to Japan while it imports, electrical machinery, transport equipment, plastic materials and precision instruments.

2. Japanese FDI

  • Japan is the 4th largest investor in India . $28.16 billion in Japanese FDI has come to India between April 2000 and June 2018.
  • 1800 Japanese companies are operating in India .
  • India established the “Japan Plus” office in the Ministry of Commerce and Industry in 2014 as a “one-stop” location for resolving problems faced by Japanese companies.

3. Largest Donor

  • Japan is the largest development assistance donor & 30% of the total ODA from Japan comes to India .
  • Some projects funded by Japan
    • Delhi Metro  
    • Mumbai -Ahmadabad High Speed Rail 
    • Western Dedicated Freight Corridor (DFC) .
    • Bangalore-Chennai expressway.
  • These loans are given at very favourable terms . Eg : Financial assistance for Mumbai-Ahmadabad Freight Corridor consists of a soft loan of ₹90,000 crore  at an interest rate of 0.1% over 50 years. The re-payment of the loan is to begin after 15 years of receiving the loan.

4. Currency Swap Agreement

  • In 2019, India and Japan signed $75 billion currency swap agreement. Hence, in the time of emergency, India can get $ 75 billion in dollars or yen at pre-determined exchange rate and later return it at the same exchange rate .

5. Security Issues

  • Japan signed the Declaration on Security Cooperation with India in 2008, only the third country with which to have such a security relationship after the USA and Australia.
  • The rise of China serves as a significant reason for the realignment of partnerships in the region. Both India and Japan have unsettled territorial claims with China. Eg : conflict over Senkaku island (Japan vs. China) and conflict over Aksai Chin and Arunachal Pradesh (India vs. China).
  • The National Security Strategy of Japan announced in 2013 has  included India as a primary driver in maintaining the balance of power in Asia disturbed by a rising China.
  • Malabar Exercise :  India, US & Japan conducts annual naval exercise to ensure freedom of navigation . It is mainly aimed at China which is emerging as the revisionist power in the Indo-Pacific region.
  • Quad : It is an informal strategic forum between India, Japan, USA and Australia. Also labelled as “Asian NATO” , it is the brainchild of Shinzo Abe and mainly aimed at containing the rise of China in Indo-Pacific.
  • Japan is helping India to build strategic infrastructure in North East and Andaman and Nicobar.
  • US-2 Amphibious Aircraft : India is planning to buy US-2 Amphibious Aircraft from Japan which can land both on land as well as water. This deal has strategic importance as this will be the first arm deal since World War 2 in which Japan will make an overseas military sale .
India-Japan Relations

Important note :  The reinterpretation of Article 9 of the Japanese Constitution allows Japan to boost strategic cooperation with India. The amended Article 9 (since September 2015) allows Japan to send military aid to friendly states that includes India) if they come under attack from another state. This amendment has opened up new avenues of strategic diplomacy between India and Japan.

Side Topic : Senkaku Island Issue

  • Senkaku Island dispute involves issue of sovereignty over eight uninhabited islands and rocks in East China Sea
  • Japan and China have conflicting claims on these islands
    • These islands are under Japan since 1895. After World War 2, US took over these islands but returned it back to Japan in 1972.
    • China started to assert historical claims over Senkaku island in 1970s.
  • Although uninhabited , these islands are important because
    • Close to important shipping lanes
    • EEZ offers rich fishing grounds
    • They lie near potential oil and gas reserves.
    • Control over these islands help in maintaining military primacy in  Asia-Pacific region.
Senkaku Island Issue

6. Nuclear Agreement Signed

  • Japan and India has reached broad agreement in 2015 on Civil Nuclear Cooperation . It will provide India access to the Japanese nuclear market as well as their technology.
  • Along with that, as a majority of the nuclear parts are made by Japan, in the absence of a deal with Japan, India found it lough to order nuclear technology from the US, France and Russia.

7. Indian diaspora

  • Indian merchants have been settling in Japan since 1870 . But their number increased exponentially during World War I when Japanese goods were sought to fill the void of European goods.
  • In recent years, there has been a change in the composition of the Indian community with the arrival of a large number of professionals. These include
    • IT professionals & engineers working for Indian & Japanese firms
    • professionals in management, finance, education, and S&T research
  • Nishikasai area in Tokyo is emerging as “mini-India”.

8. Multilateral Cooperation

India and Japan are members of following multilateral organisations

  1. G-4 : Both India and Japan are demanding permanent seat in UNSC.
  2. G-20
  3. Quad etc.

9. Other Cooperations

  • India and Japan are jointly working on Asia-Africa Growth Corridor (AAGC) announced in 2017  to counter Belt and Road Initiative of China.
  • India will supply rare earth metals to  Japan  for making defence and high tech electronics. At present, China is the biggest producer of rare earth  .
  • Varanasi has been declared as Kyoto’s sister city .
  • India and Japan have started to conduct Annual Bilateral Space Dialogue, for enhancing bilateral cooperation in outer-space .
  • Japan in the next 10 years will train 30,000 Indian youth by setting up a Japan-India Institute for manufacturing.
  • India & Japan complement each other
    1. Japan has ageing population while India has young population .
    2. They have surplus capital & we need capital .
    3. India has resources , they have technology .
    4. India’s has prowess in services and Japan has  excellence in manufacturing .

Issues

  • Japanese firms do not find it easy to do business in India due to project delays and bureaucratic hurdles.
  • India has refused to join recently concluded RCEP .
  • Both had diverging interest with respect to economic issues like on E-commerce rules (Osaka track) .
  • At WTO and it’s Doha Round of Talk , both India and Japan are in the opposite camps .
  • In spite of CEPA India Japan trade it has not produced the anticipated results .
  • Japan is concerned about its intellectual property in defence technology transfers.
  • India is part of Shanghai Cooperation Organisation as well as BRICS .