Fumio Kishida has chosen India for his first-ever bilateral visit since his appointment as Prime Minister of Japan. A well-charted out partnership with India can help both the countries achieve a natural balance which is strategically, commercially and politically stable.
While India becomes both an inspiring growth story and one of the fastest growing economies, Japan holds a sturdy position in the Indo-Pacific region when it comes to maturity, sophistication and experience in international economic engagements. India’s recent undertakings of global importance, now proven track record of large scale implementation, enhanced economic calibre and positive political outlook have certainly caught the world’s attention. Japanese technological marvels, business strategies and management & design skills are second to none.
The absence of any historical baggage or major strategic disagreement further solidifies the chances of strong strategic Indo-Japan ties. The trust factor also lies in the fact that India has extended to Japan the distinction of being the only foreign power that has been allowed to undertake infrastructure and other projects in its strategically sensitive Northeast region (which shares borders with Tibet, Myanmar, Bangladesh and Bhutan). Not only this, Japan is also helping in developing the Andaman and Nicobar islands, which are important in terms of the trade routes and maritime security.
A strong partnership between both the nations becomes important for the entire region which has been witnessing growing Chinese incursions and its bad trade and political practices. China’s aggressive foreign policy initiatives in East China Sea and South China Sea, in addition to its attempts of establishing new Chinese naval facilities across the sea routes carrying Japanese trade items have irked many states across the globe, including Japan. Despite the world’s attempts to stop China’s illegitimate pracrices, the latter has continued with militarization of the seas. This mandates Japan (which shares sea routes with China) and India (which already has plenty of experience in keeping a vigil over the Indian Ocean) to devise workable policies to protect the concerned trade routes and play a bigger role in protecting the South Asian interests.
India and Japan are also working to build even stronger commercial and developmental relationship. In April 2020, Japanese government had proposed building an economy that is less dependent on one country – China, so that the nation can avoid supply chain disruptions. It strongly urged its companies to relocate production bases to Japan and diversify the locations of production facilities to other countries. It soon announced a USD 221 million China-exit subsidy for Japanese companies to shift their base to India and other South Asian regions. Later in August 2020, reports surfaced regarding the beginning of discussions between India, Japan and Australia on launching a trilateral Supply Chain Resilience Initiative (SCRI), a move proposed by Japan itself to reduce dependency on China, necessitated by Beijing’s aggressive political and military behaviour.
Over 1455 Japanese companies are currently operating across India. Some of the prominent Japanese investments in India include Maruti Suzuki, Uniqlo, Mitsubishi Group, Mitsui, Mizuho Corporate Bank Ltd., Hitachi, Panasonic, Honda, Toshiba, Canon, and Yamaha. Talking about stable investment, Japan ranks fifth among major investors in India. Japan, which invested USD 36 billion in India between 2000-2021, is now looking to invest a historic USD 42 billion in the country. Besides, Japan has already been providing technical and financial assistance to India for Mumbai-Ahemedabad high speed rail project, the western dedicated freight corridor and 6 metro rails (Ahmedabad Bangalore Chennai, Delhi, Kolkata & Mumbai). India’s imports from Japan also showed a growth of approx. 73% in a span of 13 years reaching USD 10.9 billion in 2020-21 from USD 6.3 billion in 2007-08.
Indo-Japan strategic partnership can become a gamechanger in the Asian region, given both the nations continue to add concrete security content to their relationship. While boosting trade and investment need great emphasis, it must be garnished with greater strategic collaboration. Besides deepening defence and maritime security cooperation, both the countries must explore collaboration possibilities on infrastructure and other projects in third countries, including Myanmar, Bangladesh and Sri Lanka, and in Africa. This may greatly help in enhancing strategic connectivity in the Indo-Pacific.
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