Introduction Sincetheturnof thecentury, India’seconomicandpoliticalsignificancehasbeenrisinglargelyduetoitseconomicgrowthanditsincreasingwillingnesstoengagetheworldmorein-tenselyandwidelythanitspastorientationduringthecoldwarperiod.CapturingtheessenceofIndia’simportancePresidentBarackObamaduringhisvisittoIndiain2010stated“Indiaisnotjustarisingpower,ithasalreadyrisen.Itseconomyhasrisenatabreathtakingrate...welookforwardtoagreaterroleforIndiaattheworldstage”.２

JapanwasareluctantpartnerofIndiaformostofthepost-warperiodanduntiltheendofthecentury.３Despitetheirmutualgoodwillduringandafterthewar,thebilateralrelation-shipnevergotoffthegroundbecauseofthecoldwarpoliticalimperatives.JapanwasalignedwiththeWest,mainlywiththeUnitedStatesthroughasecurityalliancewhileIndiaessentiallyfollowedthepathofNon-alignmentwithitslaterorientationtowardstheSovietUnion.India’spositionchangedwiththeendof thecoldwar,creatingopportunities forIndiaandJapantodeepenandstrengthentheirbilateralrelationshipastheirstarsalignedmuchbetterthananytimebefore.ButevenbeforenewdevelopmentscouldtakeanyconcreteshapeIndia’stestingofnucleardevices in1998attractedJapan’sstridentcondemnation, followedbysanctions in-cludingviaofficialaid.

India-Japanrelationshavecomea longwaysince1998,especially in the lastdecade,aswillbedetailedbelow,ineconomicandtradeties,indefenceandsecuritycooperationandex-changeofofficialsandhigh-levelvisitshaveproliferatedincludinginstitutionalisingofanannualsummitmeetingprocessbetweentheprimeministersofthetwonations.

ThisarticlewillfirstdetailsomeoftherecentnetworksthatJapanandIndiahaveformedinarangeofareas followingwhichananalysiswillbepresentedoutlining factorsthathave

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１ Thispaper ispartoftheauthor’sprojectonJapan’sforeignpolicyfundedbytheAustralianResearchCouncil.

２ http://www.ndtv.com/india-news/india-not-just-a-rising-power-has-already-risen-obama-to-india-438458３ Foranoverviewofdevelopment in thebilateralrelationshipuntil themid-2000s,seePurnendraJain,

From Condemnation to Strategic Partnership: Japan's Changing View of India (1998-2007),Singapore:InstituteofSouthAsianStudies,2008,38pp.

Rising India and Japan’s Expanding Networks１

Purnendra Jain, University of Adelaide

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broughtthetwonationsclosertogetherinrecentyears.Finally,thearticlewillmakesomeob-servationsabouttheshort-to-medium-termfuturedirections,workthatneedstobeundertakentomaketherelationshiproundedandcomprehensive.

Economic�Networks Japan-Indiatradewhichhoveredataverylowlevelforlongtimebegantoseesomeup-wardsmovementsfromthemid-2000s.Thebilateraltradewhichstoodcloseto700billionyenin2005doubledtoover1500billionyen in2013.４Thebilateral trade isevenlybalancewithaslightadvantage in favourofJapan.Moreremarkable isJapan’sdirect foreign investmentin India.Fromameagre29.8billionyen in2005the figureroseto210.2billionyen in2013.Whatmustbenoted is thatJapanesedirect foreign investment in Indiaslowed intheearly2010sbecauseoftheslowpaceofeconomicandstructuralreformsinIndiaunderthesecondadministrationofPrimeMinisterManmohanSingh (2009-2014). In2008,Japanhad indeed in-vested542.9billionyeninIndia.ItisnotjusttheamountofmoneythatJapanhasinvestedinIndiathatmattersbutalsothenumberofJapanesecompaniesthathaveinvestedinIndiahasincreased.AccordingtoonesourcefromtheMinistryofForeignAffairs inTokyo,ason1stOct2011,Indiawasrankednumber6withsome1,228companiesinvestinginIndia,followingChina,US,Germany,Thailand,Indonesia.５

Japan’stradewithandinvestmentinIndiaarelikelytofurtheracceleratewiththesigningoftheJapan-IndiaComprehensiveEconomicPartnershipAgreement(CEPA)thattookeffectinAugust2011.CEPAislikelytoeliminatecloseto94%ofthetariffsbetweenthetwocountrieswithinaperiodoftenyears.Thereishugepotentialforgrowthinbothinvestmentandtradeareas,givenIndia’smarketsizeandJapan’sindustrialandfinancialcapacity.

JapanhasbeenasteadyproviderofeconomicaidtoIndiathroughitsOfficialDevelopmentAssistance(ODA)program.IndiawasthefirstrecipientofJapan’syenloanasfarbackasin1958.ButIndiafadedfromJapan’saidradarasTokyobegantoallocatemostofitsaidbudgetonotherAsiannations,mostnotablyonChinawithgeneroustermsandconditionsnotofferedevertoanyotherrecipientnations.However,asJapandecidedtodiscontinuemostof itsaidprogramstoChinabeginning2008,Tokyoturned itsattentionto Indiawherenew levelsofJapan’sinterestemerged.Inmanyofthefiscalyearssince2003IndiabecamethetoprecipientofJapan’saidmoney,especiallythroughtheyenloanprogramsforinfrastructuredevelopment

４ MosteconomicdatapresentedherehavebeendrawnfromtheMinistryofForeignAffairsJapanesehomepage.

http://www.mofa.go.jp/mofaj/area/india/data.html５ PersonalinterviewMOFA,Tokyo,18August2014.

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projects.Forexample,theDelhiMetrocommuterrailsystemisoneofthemostsuccessfulandvisibleexamplesofJapaneseODAforinfrastructuredevelopmentinthegreaterDelhiMetro-politanarea.TwootherexamplesofsuchprojectsaretheDedicatedFreightCorridor (DFC)andtheDelhi-Mumbai IndustrialCorridor (DMIC).Duringhisvisit to India inJanuary2014PrimeMinisterShinzoAbereaffirmedJapan’scommitmentofODAforIndia’seffortstowardssocialandeconomicdevelopment.６

Political,�Strategic�and�Defence�Networks JapanandIndiahavedeclaredthemselvesas‘strategicandglobal’partners.Thesearenosmallrhetoricalphrases,especiallygiventheir low levelof interactions inthepast.Notonlybilateralpoliticalandbureaucraticvisitationshaveincreasedandexpanded,butthetwocoun-trieshaveinplaceanannualsummitprocesssince2005whenPrimeMinisterJunichiroKoi-zumivisitedIndia.In2006,2008,2010,2013(inplaceof2012)IndianPrimeMinisterManmohanSinghvisitedJapan;andPrimeMinisterShinzoAbein2007,PrimeMinisterYukioHatoyamain2009,PrimeMinisterYoshihikoNoda in2011andPrimeMinisterShinzoAbe in2014 (inplaceof2013)visitedIndiaaspartoftheannualsummitprocess.ThemostrecentvisitwasthatofIndia’snewPrimeMinisterNarendraModiinAugust-September2014.７Attheseannualsummitsthetwoprimeministerstakestockoftheirbilateraltiesandannounceachievementsof thepreviousyearsandpresentaroadmapforyearsaheadthrough jointstatements.Notmanycountrieshavesuchbilateralsummitarrangementsastheyrequirealotofpreparationandongoingcommitment.ThatIndiaandJapanhavesuchaframeworkinplaceshowstheircommitmentandrecognitionofeachother’simportance.

IndiaandJapanconductatwo-plus-twodialoguewhichbringstogethertopmilitaryanddefenceofficials intheonlysucharrangementthatIndiahaswithanycountry.Thetwona-tionsarenegotiatingtoupgradethisprocesstotheministeriallevel.WhenachievedthiswillbeJapan’sfifthafteritsexistingtwo-plus-twodialoguewiththeUnitedStates,Australia,RussiaandFrance.８ThereisaJapan-IndiaMaritimeExercise(JIMEX)inplace.Manyotherministe-rial-leveldialoguesareheldinarangeofareasfromcommerceandindustrytomaritimesecu-rityandenergymattersandthelistisgrowing.AccordingtotheMOFAhomepagevisitedinFebruary2015,13suchdialogueshavebeenconductedbilaterallybetweenOctober2012andJanuary2015rangingfromcybersecurity,terrorismtomattersconcerningtheIndianOceanandAfrica.９６ http://www.mofa.go.jp/region/asia-paci/india/data.html７ SeePurnendraJainonModi’svisit to Japan,http://www.eastasiaforum.org/2014/09/08/india-draws-

japan-closer-as-modi-embraces-abe/８ http://www.japantimes.co.jp/news/2014/08/22/national/japan-india-eye-launch-security-dialogue-

involving-foreign-defense-chiefs/#.VOlOT2MhDwk９ http://www.mofa.go.jp/mofaj/area/india/data.html

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Rising India and Japan’s Expanding Networks

Amajorbreakthrough in thebilateralsecurityrelationshipwasachieved in2008whenthetwonationssignedajointDeclarationonSecurityCooperationallowingthemtocooperateinwide-rangingmattersrelatedtosecurity,mainly inthenon-traditionalsecurityarenasuchaspiracy,sealinesofcommunication,terrorismandtrans-nationalcrimes.ThiswasthethirdsecurityagreementthatJapanhassignedbesidesitslong-termsecuritytreatywiththeUnitedStatesandasecurityagreementwithAustraliain2007.However,thereisnothinginthedec-larationandbeyondtopreventJapananditsnewsecuritypartnerIndiafromusingthenewdeclarationasabasisforfurtheranddeepercooperationindefencematters, ifsuchcoopera-tionisdesiredbybothparties.10

ArecentdevelopmentworthnotingisthepossibilityofJapansellingtoIndiaitsamphibi-anaircraftUS-2producedbyShinMaywa.PrimeministersSinghandAbeagreedinJune2013toestablishaJointWorkingGrouptoexploremodalityforsuchsales.Ifthedealgoesahead,itwillsignifyanewerainIndia-Japanrelations,especiallysinceJapanhasonlyrecentlylifteditsfive-decades-oldbanonarmsexports.ThiswillalsobeJapan’sfirstsaleofafinishedmilitaryproduct.11DuringModi’svisit toJapan inAugust2014, thetwo leaders includedthe issueofUS-2 intheir jointstatement ‘TokyoDeclaration forJapan-IndiaSpecialStrategicandGlobalPartnership’declaringthatthetwonationswillworktowardsfurtherprogressonthissearchandrescueplanes.

Forthe last fiveyears,JapanandIndiahavealsobeen indiscussionwithregardstoanagreementoncivilnucleartechnologycooperation.In2013,thetwoprimeministers–SinghandAbe-evenagreedtodirectofficialsofbothcountriestoacceleratenegotiationsonnucleartech-nologycooperation,stalledinthewakeofthe2011Fukushimanuclearfallout,towardsanearlyconclusion.Butlikejointdefenceproductionandarmsexports,cooperationinnucleartechnol-ogy,even if it is forcivilianpurposes, isnoteasy forJapantonegotiateduetostronganti-nuclearpublicsentimentsandsensitivities inthepublicspherewithregardstoanydefenceandsecurityagreementsasveryoftentheyareconstruedtobeagainstthespiritofJapan’spacifistconstitution,especiallyArticleIX.ThematterisfurthercomplicatedbecauseIndiahasnotsignedtheNuclearNon-proliferationtreaty(NPT)makingitdifficultforJapaneseleaderstopushIndia’scasetoitspublic.

10 SeePurnendraJain,‘Japan’sExpandingSecurityNetworks:IndiaandAustralia’, Indian Journal of Asian Affairs,22,June-December2009,pp.1-17.

11 RecentlyJapanhasalsobeendiscussingwithAustraliatoexportitsSoryuclasssubmarines.InJanuary2015JapanreachedanagreementwithBritainto jointlyresearchnewair-to-airmissiletechnologyaspartofincreasedcooperationondefenceandsecurityissues.

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Why�India�Now? Japan’srecentinterestinIndiahastakenofffromaverylowbaseandisundoubtedlysettoaccelerate.ThenatureandspeedofJapan’sinclinationtowardsIndiaarearesponsetoJa-pan’sgrowingdistrustofChinaanddeteriorationintheirbilateralrelationship.Inthisscenario,itmakessenseforJapantoforgetieswithIndia,Asia’sother‘risenpower’,apartnerpossiblycapableofbalancingChina’srisinginfluenceintheregionandbeyond.IndiaisgenerallywelldisposedtowardsJapan.Thetwonationshaveveryfewcompetinginterestsandnohistoricalbaggage.Indeed,thenatureofregionalgeo-strategicpoliticsmakestheirbilateralcooperationevermore likelyastheysharesimilar interestsregionally (e.g. inclusiveregionalbodies)andglobally(e.g.reformoftheUN).

OnmanyoccasionsleadersofthetwocountrieshavedeniedthattheirgrowingnetworksareinanywayhaveadverseimplicationsforChina.FormerIndianPrimeMinisterManmohanSinghoncestatedthatcooperationwithJapanwouldnotbe‘atthecostofanythirdcountry,leastofallChina’.SimilarlyhisJapanesecounterpartthenPrimeMinisterTaroAsoobservedthat‘wedonothaveanyassumptionofathirdcountryasatargetsuchasChina’.12

WhileitisundeniablethatChinaisamajorfactorintheirnew-foundpartnership,Chinaisnot thefactorinIndia-Japanexpandingnetworks.Thereareothermutualattractions.Economi-cally, India isagrowingmarket forJapanwithhugepotential forJapanesecompanies.Themarketforceisatworkhere.Ontheotherhand,IndianeedshugeforeigninvestmentforitsinfrastructureprojectsanditfindsJapanawillingpartnerandgoodfitforitsneeds.

IndiaisalsoattractivetoJapannowthatIndia’sforeignpolicyorientationismoreinlinewithJapan’sown.India’spartnershipwiththeUSinwide-rangingareasgivesJapanconfidencetoengageIndia,economicallyandstrategically. India’s ‘LookEast’and ‘ActEast’policyalsogivesJapantherightsignal that India iswillingtoplaya largerrolebeyond itsSouthAsiabackyardintoSoutheastAsiaandbeyond.

Modi-Abe�Partnership Withtheinaugurationin2014ofaBharatiyaJanataParty(BJP)newgovernmentinNewDelhiunderNarendraModi,JapaningeneralanditsPrimeMinisterShinzoAbeinparticularhaveexpressedevengreaterinterestinIndia.InAugust2014,ModimadeJapanhisfirstover-seasdestinationbeyondthesubcontinent.Althoughneverbeforeanationalparliamentarianorminister,ModiisnotanunknownpoliticalfigureinJapan.AschiefministerofGujaratstatehe12 PurnendraJain,‘Tokyo’sNexuswithIndiaDeepens’,Asia Times Online,25October2008.

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visitedJapantwiceandestablishedgoodrapportwithseniorJapanesepoliticalfigures,includ-ingShinzoAbewhowastheninopposition.DuringthistimeModitravellednotonlytoTokyobutalsotoNagoya,OsakaandKobeholdingmeetingswithhigh-profilebusiness leadersandsuccessfullyattractinghugeJapaneseinvestmentinGujarat.

AbeandotherJapanesepolitical leadersaswellas industrycaptainsrecognizethatunlikemanyofhispredecessorsinthelastthreedecades,Modistandsonsolidpoliticalground.Modi’sunprecedentednationalpoliticalvictoryisbasedonhiselectoralsuccesspromisetothepeopleofIndiathathisadministrationwillmakearealdifferencetoIndiaeconomically,politicallyandsocially.TothisendModifindsJapanakeyeconomicandstrategicpartner.

PrimeMinisterAbe,asdiscussedabove,hasbeenattheforefrontofpushingJapan’srela-tionswithIndiatoanewheightandheisexpectedtokeepthecurrentmomentum.In2015,Japan’sprimeministerwillvisitIndiaaspartoftheannualsummitmeetinganditislikelythatthetwoprimeministersandtheirofficialswouldthinklongandhardtotaketherelationshipatleastanotchhigherthanthecurrentlevelofengagement.

Missingtoday inthebilateralrelationshipareconnectionsatthesubnational level (stateandcities).Modi iswellawarewhatadifferencehemadeto theeconomyofGujaratstatethroughhis leadershipaschiefminister.AsIndia’sprimeministerheshouldencourageandfacilitatestate leaders in India toestablishdirect linkswithJapanandevenbypassing thenational-levelbureaucracy.TothisendanofficialagreementhasbeensignedbetweenKyotoandVaranasi to facilitateculturalexchangesbetweenbothsides.Kyoto isaworldclasscityattractingmillionsofoverseasvisitorsannuallywhichPrimeMinisterModiaimsatreplicatinginVaranasi.JapancanalsoplayacrucialroleintheimplementationofModi’splanforcreating100smartcitiesinIndia.

Moregrassroots levelcontactsareessential fortherelationshiptoendure inthe longerterm.Educationalopportunitiesat schoolanduniversity levels, andexchangeatNGOandprofessionallevelsplayimportantrolesinunderstandingeachother’ssociety.ThenumberofIndianstudentsstudying inJapan isridiculously low,despiteJapanhavingsomeof thebestuniversitiesinAsiaconsistentlyrankinghighontheworldtable.CreatingJapaneselanguageprogramsandotheropportunitiesintheseareasshouldbeprioritizedforameaningfulandsus-tainablelong-termrelationship.

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