During his recent visit to Japan, Indian Prime Minister Narendra Modi issued a joint declaration with Japanese counterpart Shinzo Abe, pledging to build a Japan-India special “Strategic and Global Partnership”. Abe said it was hallmark that the Japan-India relationship “is one with the most potential in the world”, while Modi emphasized there is no upper limit to Japan-India cooperation. The two sides agreed to expand investments in and exports of infrastructure and defense equipment to India, and enhance cooperation in such fields as maritime security, joining the UN Security Council, as well as nuclear energy, formulating a partnership in a global context.
The two parties stated that Japan and India are Asia’s “largest and oldest democratic countries”, share common values, and the leaders’ summit opened a “new era for bilateral ties”.
Though the two sides emphasized “global partnership”, they are more anxious to marry “Modinomics” with “Abenomics”. Before he was elected Indian prime minister, Modi had created an “economic miracle” in the state of Gujarat through relaxing regulation, expanding infrastructure investment and attracting overseas investment. Since he assumed office as Japanese prime minister, Abe has been keen on “economic reforms” featuring unorthodox currency policies and public investment expansion. Dovetailing the economic philosophies of the two leaders will considerably affect the orientation of Japan-India economic relations.
Japan has its eyes on India’s population of 1.2 billion. With an average age of 27, India could be called the world’s youngest market. India is more interested in Japanese capital and technologies, as well as the possibility of building a regional manufacturing center with Japan. Boasting Asia’s longest railway history, India’s railroads date back to its colonial era. Lengthwise, India’s 65,000-kilometer rail network ranks the fourth worldwide. Its 4.11 million kilometer land transport network stands second globally. Breaking through geographical and systematic limits, making up for financial deficiencies with overseas funds, and completing infrastructures in such fields as transportation, electricity, telecommunications, education and public health are not only Modi’s strategic goals, but also mean strategic orders for Japanese companies. Japanese and Indian economies are mutually complementary.
However, whether Modi can copy his economic achievements in Gujarat and repeat that miracle in a national context is obviously a subject for development economics; while if “Abenomics” could bring Japanese firms’ cooperation model in China and East Asia to India will undoubtedly be a brand-new challenge.
India started its “reform and opening up” in 1991. Yet Japan-India economic and trade ties have not advanced accordingly. To date, Japan-India trade volume remains one-fortieth that of Japan and China. There is a long way to go to have India take China’s place and become Asia’s new industrial center.
During his visit to India in the beginning of this year, Abe raised Official Development Aid to India to 210 billion yen, expanded the Japan-India currency exchange agreement to $50 billion, and promised to offer $4.5 billion worth of project aid to such infrastructures as railways in order to get orders for Shinkansen and nuclear power stations. Since the two countries signed their agreement on economic partnership in August 2011, Japan has invested vigorously in India, becoming the latter’s fourth largest foreign investor. Now, Abe has put forth an investment and fund-raising target of $35 billion for the next five years. Modi wants to attract direct investments from Japanese firms and boost India’s manufacturing. India has been pragmatic in infrastructure construction. It is thus to be seen if it will adopt the high-standard Shinkansen system.
In security cooperation, Japan and India have different needs. Therefore, their strategic goals are not identical. During his visit to India, Abe proposed collaboration between the two countries’ “national security councils”. This time, Abe appealed for establishing a “diplomatic and defense 2+2 mechanism” and enhancing naval and air force cooperation, taking advantage of India to protect its “maritime lifeline” and divide China and India strategically. In order to guarantee Japanese presence in the Indian Ocean, Abe has also tried to contain Modi. For instance, prior to Modi’s visit, Japan provided Sri Lanka with maritime defense equipment and personnel support, and offered the latter 600 billion yen of official development assistance for the construction of the “Japanese companies industrial park” that sprawls from Dhaka to Chittagong, taking a pre-emptive move in the Indian Ocean.
It deserves attention that Japan doesn’t seem to be ready for coordinating with the United States regarding the latter’s potential “strategy for the Indian and Pacific oceans”. The potential center of gravity of U.S. rebalancing to the Asia-Pacific lies in the Indian Ocean, and the Indian Ocean rim can be considered a new frontier for U.S. global strategy. The recent U.S.-Africa Leaders Summit has made strategic arrangements directly involving the “Indian Rim” for African development.
Meanwhile, with the establishment of the “BRICS Bank”, Chinese-Indian cooperation has also seen new opportunities. It is thus unclear how the Japan-India global partnership coordinates with the practical presence of China and the U.S. in the region. As to the Japan-India nuclear cooperation, their approach to the Non-Proliferation Treaty has to do with international interactions in a larger context; as to UN reforms and Japan and India’s aspirations for Security Council membership, the two countries themselves won’t determine the matter. It seems that the future of the “Japan-India relationship in the global context” can’t be guaranteed by Japanese capital and technologies alone.
