Balancing China & Transcending Pax-Americana: India and Japan as Emerging Strategic Bookends

In late May 2018, the Japanese press announced that Japan’s Self-Defense Forces are finalizing plans to conduct counter-terrorism exercises with the Indian army in the northeast part of India later in the year¹—the first overseas combat training exercise of its kind for the traditionally homebound Ground Self-Defense Force (GSDF). In July 2017, an India-Japan agreement for cooperation on the peaceful uses of nuclear energy went into force²—the first such pact by Japan with any country not party to the Nuclear Non-Proliferation Treaty (NPT) and an extraordinary exception from the only country to have been attacked with nuclear weapons. Although noteworthy, these pathbreaking exceptions to Japan’s post-WWII security patterns are not astounding. They actually are two milestones in a series of historic accommodations between Tokyo and New Delhi demonstrating the steady growth of a strategic bilateral partnership.

In mid-2018, New Delhi and Tokyo have been softening their rhetoric toward China during what many view as an ongoing period of uncertainty regarding the Trump administration’s ultimate posture in East Asia.³ Nonetheless, they view themselves as the bookends for a regional alternative to what both see as an unacceptable Chinese program to make the Indo-Pacific region less open and far more hostile to the free and fair flow of goods, services, people, and ideas. The remarkable pace of the growing strategic relationship is a significant geostrategic development.

Ancient Relationship, Modern Partnership

The India-Japan relationship dates back centuries, involving both cultural and commercial interactions. Buddhism came to Japan from India in the 6th and 7th centuries.⁴ The first direct economic contact can be traced to the beginning of Japan’s Meiji period (1868), when Japan used raw materials from India to enable its early industrialization.⁵ The relationship was rejuvenated in 2000 and has become increasingly strategic since 2006. Driving it forward are the rise of China, the promise of India, and the reemergence of Japan as an active contributor to international peace and stability.

Strategic relations have evolved through three major phases since the end of WWII: 1945 to 1999, 2000 to 2005, and 2006 through 2018.⁶ In the first phase, Japan and India maintained a cordial relationship but remained at a political distance. India led the nonaligned movement while Tokyo was closely aligned with the US-led anti-communist bloc. US-India antipathy—and the distance between Japan and India—grew greater after India’s Treaty of “Friendship and Cooperation” with Moscow was signed in 1971. This phase came to a rather frosty end after India’s nuclear tests of 1998 and the Japanese decision to join Washington and impose economic sanctions.⁷

The second phase commenced with the historic visit of President Bill Clinton to India in March 2000—the first by a US president for more than 20 years. Taking a cue from it, Prime Minister Mori Yoshiro traveled to New Delhi in August 2000,⁸ where he announced the “Japan-India Global Partnership.” Since then, prime ministers of both the Liberal Democratic Party (LDP) and the Democratic Party of Japan (DPJ) have visited India. Beginning with Prime Minister Koizumi Junichiro in 2005, Japanese and Indian prime ministers have held annual, alternate-host summits.  On the security front, the Indian and Japanese coast guards began annual joint exercises and leadership exchange visits in 2000. 

By late 2006, a third, much broader phase of strategic engagement began, evolving in parallel with greater defense engagement by George W. Bush under the aegis of America’s new “dehypenation policy,” placing US relations with Pakistan and India on separate pathways.⁹ Japan-India relations became increasingly geostrategic in nature. Beginning with his first cabinet, Prime Minister Abe brought a personal commitment to the relationship. He fondly recalled that his grandfather, Kishi Nobusuke, had been the first Japanese prime minister to visit India and that Prime Minister Jawahalal Nehru had introduced him warmly to a great outdoor rally there in 1957.¹⁰ Abe and Prime Minister Manmohan Singh signed agreements that moved the Abe vision toward reality: in 2006, their first-ever bilateral Defense Cooperation Agreement, and in December 2006, a document formalizing their relationship as a “strategic and global partnership.” In a speech before the Indian parliament in August 2007, Abe laid out a construct called, “Confluence of the Two Seas,” asserting that India and Japan had a unique and special role, and responsibility, to see this vision attained. Abe’s resignation for health reasons in September 2007 did not arrest the positive trajectory of bilateral relations. These continued to expand steadily, if not as vigorously as under Abe.¹¹ Strong cultural, economic, and political forces drove them forward. The looming specter of China’s ongoing military modernization required that the two nations collaborate on managing the potential challenge posed by Beijing.

Abe’s return as prime minister in December 2012 set the stage for acceleration in the third phase of the bilateral relationship. India signaled its deep commitment to Japan as a strategic partner by making Abe the first ever Japanese dignitary to be the Chief Guest at India’s Republic Day in January 2014—India’s highest diplomatic honor.¹² That spring elections brought Narendra Modi of the BJP party to power, and the bilateral relationship took a dramatic spring forward. Modi visited Japan in September 2014, his first bilateral visit outside of South Asia. India and Japan officially updated the description of their relationship to one of a “Special Strategic and Global Partnership.”¹³ They moved forward on cooperation in long-sensitive space and defense matters.   India also joined Japan in expressing concern about developments in the South China Sea.¹⁴

High-level diplomacy and strategic interactions accelerated again in 2015 and 2016.  Japanese investment in major Indian economic projects took off. On his December 2015 visit Abe inked Japan’s commitment to funding and building India’s first-ever high-speed railway and protocols to enable the future transfer of defense equipment and technology. India and Japan also agreed on joint measures to protect classified military information—a commitment essential to greater technology transfer in the future. India agreed to Japan’s permanent inclusion in the bilateral US-Indian Malabar annual naval exercises. 2016 interactions included a very significant bilateral civil nuclear deal, signed in early November by Modi on a visit to Japan. This deal opened the way for Japan’s highly capable nuclear reactor businesses, like Toshiba, to build nuclear power plants across India and sell nuclear reactor parts and equipment to other contractors there.

India’s “Look East” to “Act East” & Japan

India’s metamorphosis as an Asian-engaged nation began in the early 1990s. In 1991, India confronted simultaneous, related crises that demanded a re-think of its “nonalignment” strategy.  The first was economic, a severe balance of payments crisis. The second crisis was geostrategic.  India’s principal security and economic partner from 1971-1990, the Soviet Union, collapsed.   India lost Soviet subsidies, customers, and suppliers across the fragmenting Soviet bloc. India also lost its ability to stay distant from the global “first world.”¹⁵

Prime Minister P.V. Narasimha Rao announced an alternative economic model in 1992: The “Look East” policy, which launched efforts to cultivate extensive economic, and later strategic, relations across first Southeast Asia and then the wider Asia-Pacific region.¹⁶ It led India to pursue economic modernization and integration into the capitalist trade and finance framework. 
Japan was a natural partner, although relations between the two expanded only slowly at first as New Delhi initially focused most intensely on Southeast Asian states. During the 1990s, India did increase its economic ties with Japan,¹⁷ but significant political and strategic potential went un-cultivated, especially after India’s 1998 nuclear weapons test. Yet in 2000 Vajpayee expanded economic and cultural relations into dialogue about geostrategic matters of mutual interest. Mori’s August visit to India extended the relationship dramatically. By the mid-2000s, Indian policymakers positioned the relationship at the very top of a growing array of strategically important bilateral ties evolving across the Indo-Asia-Pacific region.¹⁸

In November 2014, some six months after his ascension as prime minister, Modi announced that India would pursue an “Act East” policy, extending beyond the two-decade old “Look East” policy.¹⁹ His announcement—which utilized a phrase first uttered in a policy speech by US Secretary of State Hillary Clinton on her 2011 visit to India—aimed to invigorate “Look East” with a wider set of engagements across the region. The government called for greater external investment in India to build state infrastructure, “smart cities,” and economic competitiveness especially in manufacturing. Since then, India has been pursuing options for investment as well as strategic interaction to signal displeasure with China’s increasingly assertive unilateralism.²⁰  Modi has focused on welcoming Japanese infrastructure investment into India, notably choosing it over Chinese offers in critical programs like the Mumbai Industrial Corridor bullet train between Mumbai and Ahmedabad and “smart cities” initiatives on the east coast.

Multifaceted Economic Interactions

India has made Japan an increasingly preferred economic partner. Although Beijing remains India’s number one economic partner when summing all investments and trade activities, Japan is consistently in the top ten of states investing in India since 2010.²¹ China has not been in this investment top ten. New Delhi has been working to expand overall Japanese economic activity. Japan has a unique, record of private sector economic investment in India. It has averaged about $5 billion of investment a year for the past half-decade—about 6% of Japan’s overall annual overseas investment and about half of Japan’s direct investment in China. This sustained level has been a noteworthy increase over the less than $2 billion per year in the decade before 2009; and, importantly, an increase into India about double the increase into China since 2009.²² 2014 and 2015 announcements by India of additional Japanese investment tranches planned through the year 2020 remain consistent with the $5 billion level, adding a bit more in specific projects.²³ 

Japan’s ODA, initiated for India in 1958, is a critical component of its overall economic support.  In 2003-04, India became the largest single recipient. Japan has focused its ODA program on the development of industry-related and energy infrastructure (increasing renewable energy capacity and rural electrification).²⁴ It is noteworthy that Japan exempted India from cuts in its ODA budget in the wake of the tsunami and meltdown of nuclear reactors in Fukushima in March 2011.²⁵ Japanese ODA support for road and water supply construction in India’s northeast merits special comment. For years, India found it difficult to secure outside investment partners for many of these projects. The China-India dispute over rightful ownership of the 90,000 square kilometers of land in Arunachal Pradesh (China-named South Tibet) consistently inhibited outside investor interest in infrastructure projects. But Tokyo has resisted Chinese pressure, becoming India’s lone outside-government investment partner in the region. From late 2014, Japan has pledged about $854 million in funding at reduced interest rates for about 1,200 kilometers of roads across India’s northeast and several hundred million additional in low-cost funding and aid for water and hydroelectric projects in areas near the Chinese border.²⁶

Japan also has supported India in financial matters of strategic significance. In 2013 the Indian rupee went into free fall, and international worries about India’s ability to finance growth grew. Japan decisively intervened, in September signing a $50 billion debt swap with a clause allowing the ceiling on the deal to go as high as India wanted. International currency speculators were thrown off the scent, and the Indian rupee stabilized.²⁷ In December 2015 Abe and Modi signed documents marking another expansion in the scope of Japanese investment. These included an announcement that Japan would fund a $15 billion (project to build a high speed “bullet train” between Mumbai and Ahmedabad in India’s northeast), outbidding a Chinese proposal.²⁸

The strategic partners formalized the hallmark India-Japan Civil Nuclear Agreement during Modi’s summit in Japan in early November 2016. It was ratified by Japan’s Lower House in May 2017 and put into force in July 2017. The statement focused on: nuclear cooperation, counterterrorism, coordination on regional issues, and defense industry cooperation.²⁹ An extension of the India-Japan Vision 2025 document signed in New Delhi during the summit of December 2015, the 2016 statement confirmed the strategic nature of Japan’s economic assistance to India and mutual interests in the wider region that help counter the potential for undesirable Chinese influence.³⁰ Three Japanese ventures in the Indian Ocean basin stand out.

First, India in 2015 approached Japan with a proposal for economic cooperation on India’s Andaman and Nicobar Islands with a strategic twist. Japanese funding for a 15-megawatt (MW) diesel power plant to be built on South Andaman will help improve the lives of the population there.³¹ Moreover, reliable, robust power on the islands will greatly assist India’s ability to upgrade its evolving maritime and tri-service bases there, expanding its presence in an area where both nations wish to see growing Chinese maritime activities monitored more diligently.³²

Second, India and Japan have begun collaborating on extension of economic ties and infrastructure from India to Burma. Although China’s influence is all-pervasive across Burma, Japan’s private sector has long been present. Japan made Burma its largest recipient of grant aid projects in 2014, including infrastructure projects for a major bridge, railway improvements, customs modernization, and gas power plant construction. Japan also approved over $1.5 billion in very favorable ODA loans for Burmese infrastructure projects during 2013-2015.³³ In late 2016 Japan pledged an additional $7.7 billion in public and private support money for Burma’s development over the coming decade.³⁴ India views Burma as its gateway to the east. Modi announced the “Act East” policy on a visit to Naypyidaw in late 2014. Although India-Burma trade has been paltry, India has begun more deliberate trade and transit interaction.³⁵ It continues to support Japan’s robust investments in Burma, looking to link those with complementary ones in Northeast India and with other traditional Indian economic partners.

Finally, Japan has joined India in a joint project to develop the strategically important port of Charbahar in Iran. India launched a collaborative venture with Iran and Afghanistan in mid-2016 to boost economic ties and access to natural resources and trade routes stretching from Charbahar to Central Asia.³⁶ The project includes construction and operation of port facilities, the creation of special economic zones nearby, and the development of road and rail connections through Iran and Afghanistan and into Central Asia.³⁷ This infrastructure will be a parallel route and potential competitor to the Chinese-sponsored Belt and Road Initiative (BRI) and its key north-south land component through South Asia: The Chinese-Pakistan Economic Corridor (CPEC).

Unique Diplomatic and Bureaucratic Arrangements

India and Japan have steadily expanded the scope and depth of their diplomatic activities and bureaucratic arrangements, now featuring some unique administrative arrangements aimed at working around notorious features of India’s often sclerotic bureaucracy to assure that a robust relationship will outlast any one Japanese or Indian prime minister. Annual bilateral summits began in 2005 with the visit of prime ministers to alternating national capitals³⁸—unprecedented for New Delhi outside of its immediate neighborhood, exemplified by the 2014 honoring of Japan at India’s Republic Day parade.³⁹ Although the obvious affinity between Abe and Modi has driven an especially high level of diplomatic engagement since 2014, a deep diplomatic engagement framework preceded them and seems destined to outlast them.

To sustain interaction, both sides have taken steps to overcome frictions inherent in their bureaucracies, as with the establishment in 2015 of a working-level, high-speed railway joint committee to expedite progress on the Mumbai to Ahmedabad project. Japanese security leaders cite this as a model for successful interaction.⁴⁰ A number of important adaptations have been institutionalized; many involve defense and security meetings addressed below. Both prime ministers have taken steps within their bureaucracies to facilitate high-level interaction.

Abe has made the bilateral partnership with India a national security and diplomatic priority.   Since 2014, the Japanese National Security Secretariat (NSS) meets frequently to discuss the Japan-India relationship with Japan’s ambassador to India regularly attending when in the country.⁴¹ In India, Modi has given Japan unprecedented access within the all-important Indian Ministry of External Affairs (MEA). In 2015, India granted Japan a special ombudsman position directly within the MEA with special access to the MEA leadership and, as necessary, directly to Modi in order to assure that Japanese projects and activities get top priority across the Indian bureaucracy.⁴² Combined, these top-level special arrangements aim to institutionalize a special political and bureaucratic relationship before the end of the Abe-Modi tenures, possible as early as 2019.

Growing Defense and Security Cooperation

Defense interactions have lagged behind other areas of the relationship. India’s historic reluctance about military-to-military partnerships due to its traditional nonaligned status is part of the problem. So too are Japan’s unique constitutional limitations on security beyond territorial self-defense. These longstanding limitations are now changing. Defense cooperation has begun advancing rapidly in military-to-military exercises, exchanges, and, most recently, military equipment and technology transfers Japan views India as playing an important security role in the Indian Ocean and maintaining a rules-based maritime order. The two coast guards engage in joint maritime training exercises. From 2012 the Japanese Maritime Security and Defense Force (JMSDF) and the Indian Navy have held the Japan-India Maritime Exercise (JIMEX).⁴³

In 2007, India and the United States invited Japan to be a guest participant in their bilateral maritime Malabar exercise. Japan participated in the two Malabar exercises that year, one near Okinawa and the other in the Bay of Bengal, and again in the annual Malabar exercises of 2009, 2011, and 2014. In 2015, India, with US support, expanded the exercise to include Japan as a permanent participant.⁴⁴ Japanese viewed this invitation as an “important uptick in exercise partnerships.” The trilateral 2016 Malabar exercise was held in waters off Okinawa.⁴⁵

During 2015, Japan expanded its representational defense presence in India from one to three officers and seconded a coast guard senior officer there.⁴⁶ Since 2010, India and Japan have conducted regular staff talks between uniformed naval leadership. They have conducted a defense vice minister policy dialogue since 2009 and a recurring maritime security dialogue. Defense ministers meet annually and often more than once each year.

Finally, the sale of defense equipment and technology occupies a growing role in the relationship.⁴⁷ Japan would like to see India better equipped to provide reliable security and assured deterrence against Chinese encroachment in the Indian Ocean (in the near-to-mid-term) and into the Southwestern Pacific (further ahead). Indian officials aim to secure Japanese weapons, technologies, and defense know-how in several critical areas related to these mutual security aims. India would like greater Japanese investment and assistance to help its anemic indigenous armaments manufacturing capacity. It also would like to procure weapons platforms and advanced technology for maritime surveillance and patrol, eventually extending these into a robust anti-submarine warfare capability. In conjunction with the United States and western partners, India would like Japanese assistance in developing its shipbuilding capacity. The transfer of Japanese intelligence and cyber know-how with military as well as civilian applications is an aspiration as is investment and technology transfer for civilian and military space programs.

Especially concerned with China’s increasing presence in the Indian Ocean, New Delhi is focused on the near-term improvement of maritime surveillance and intercept capabilities. A potential preview of nascent defense weapons and technology cooperation has been the half-decade-long effort by Japan to sell its US-2I amphibious search and rescue airplane to India. Negotiations on the sale of 12 began in 2011 before the return of Abe.⁴⁸ The negotiations side-stepped Japan’s self-imposed ban on selling arms by focusing on the sea rescue aspects of the aircraft and its utility for the Indian coast guard. This point of obfuscation ended in 2014 when Chief Cabinet Secretary Suga Yoshihide announced a revision of Japan’s ban on arms exports to allow exports that will contribute to international peace and stability and serve Japan’s national interest. The US-2I export would be Japan’s first post-WWII defense equipment deal.⁴⁹ Nonetheless, India’s purchase of the US-2I remained deadlocked over pricing and technology transfer issues. In September 2016 Japanese sources reported that the Ministry of Defense planned to work with ShinMeiwa Industries to reduce the $1.6 billion package price in order to close the deal. Yet, in September 2017 the deal was still not done.⁵⁰ 

Challenges with the US-2I aircraft sales demonstrate the pitfalls accompanying the promise of bilateral weapons sales. India’s hidebound defense bureaucracy is notoriously opaque, inefficient, and resistant to change from a state-run model of weapons procurement that favors national content over weapon effectiveness.⁵¹ Even Modi’s leadership has had only modest impact on India’s Defence Research and Development Organization’s (DRDO) proclivities for prevarication and arms course reversals. Japanese officials recognize there will be similar frustrations in future weapons sales and technology transfers. At the same time, Japan is very new to the military weapons sales “game.” It lacks the bureaucratic infrastructure to support the sale/transfer of military technology, a major reason for the disappointing failure of the Japanese bid to win Australia’s tender for its next generation submarine force.⁵²

Bilateral bureaucratic challenges will limit rapid growth in Japanese sales despite the obvious Indian appetite for Japanese expertise in maritime surveillance, search & rescue, anti-submarine capability, and missile defense technologies. Growth will also be constrained by lack of compatibility in military equipment, the lack of shared doctrine, and limited experience in joint exercises.⁵³ While the potential is great, to realize this potential will take time.

Broader Impact of Indo-Japanese Strategic Cooperation

In September 2011, then out-of-office Abe addressed the Indian Council of World Affairs (ICWA), telling his audience that a strong India is in the best interest of Japan and a strong Japan is in the best interest of India.⁵⁴ For Japan, the strategic relationship with India is overwhelmingly about China. As a US ally, Japan remains confident that it does not have to fear China—for now. Australia also is a Japanese security asset—the second leg of its regional security “stool.” But its best long-term hope to balance China on the Asian continent is India, whose engagement in Central Asia, Iran, and Afghanistan is viewed as a strategic parry to Chinese investments and Indian Ocean access via Pakistan and Myanmar. Japan plans to be an investment partner with India in port, road, and rail projects planned for Iran, Afghanistan, Southeast Asia and east Africa.

Japanese leaders recognize that India is presently unable to join in a full-throated criticism of China. India cannot afford to alienate Beijing when it remains far more heavily dependent on the Chinese economy for economic growth. Senior Japanese officials emphasize that Japan-India strategic cooperation is not against anyone but in support of the international system. In India there is broad political consensus that strategic relations with Japan are very important, topped by strategic economic engagement. Japan has an exceptionally important role to play in India’s pathway to robust economic growth, industrialization, and modernization of its infrastructure. Japanese ODA can do things that other economic partner programs, like those of the United States and Western Europe, cannot, including funding of infrastructure projects in Northeast India.

Indians also appreciate Japan’s special role in elevating India’s global status, conveying gravitas to Indian economic, diplomatic, and security activities across the region and globally. India’s political leadership views the relationship with Japan as a complement to—not a substitute for—bilateral strategic relationships around the world, especially its US ties. Japan is clearly now among the top five strategic relationships for India, and many in India’s ruling class believe that within ten years, strategic relations with Japan will be among India’s top three in importance, eclipsed only by the United States and perhaps the EU. 

Conclusion

The strategic relationship between India and Japan is significant for the future security and stability of the newly-coined “Indo-Pacific region.”⁵⁵ It also is a critical for both Beijing and Washington. India possesses the most latent economic and military potential of any state in the wider Indo-Pacific region. Expanding partnerships with it serve as a hedge against a China acting to challenge the existing post-WWII, rules-based, international and regional order. India and Japan share complementary, but not identical, strategic visions: to manage—and minimize—the potential negative impact from the rise of China in accord with their own strategic perspectives.   Japan perceives China’s increasingly assertive actions to be a great and growing strategic threat.   India is concerned about China’s increasingly worrisome behavior but finds itself more dependent on China for economic growth and less worried about China’s immediate physical threat. As a result, India has been—and will continue to be—less vocal in complaints about Chinese behavior, preferring to warn Beijing with subtle signaling and actions. 

Japan provides India with economic, political, and diplomatic interactions that New Delhi cannot find elsewhere. Japanese economic assistance is special in that it can undertake projects of enormous scope and scale in the Indian economy—offering a competitive and often preferred alternative to Chinese bids on critical infrastructure projects. As a technologically advanced nation with an established defense industry—now enabled to export weapons platforms and technologies—Japan can help India advance its national military and defense capabilities. 

India has received a rhetorical flourish in the US National Security Strategy of 2017, but the India-Japan strategic partnership has yet to garner much attention during the Trump administration. This inattention seems unlikely to last. Any US administration seeking to sustain the economic and security order in this critical region must inevitably do so with an eye toward help from traditional and emerging security partners. Japan is a traditional security partner and India an emerging one. Japan and India are upping their games with each other and in support of many regional security objectives shared historically by the United States.

The Indo-Japanese strategic relationship exhibits the most regional potential toward growing enhanced capacity in support of enduring US economic, humanitarian, and security objectives.   While the partnership will not supplant Washington’s vital regional role for the foreseeable future, it can become a vital complement for its near-term regional security commitments. This bilateral relationship might in time enable an even more capable security footprint constraining other actors in the region who would challenge the economic and political liberties now present.  The India-Japan strategic relationship is good for American security interests across the Indo-Pacific region. The Trump administration would do well to pay it more attention.

*The views expressed in this paper are those of the author and are not an official policy or position of the National Defense University, the Department of Defense or the US government.