India-Japan Relations in the 21st Century: Shifting from Mutual Values to Shared Interests

India-Japan

Strategic Relations in the 21st

Century

Prerna GandhiResearch Associate,

CAPSApril 11, 2014

Project Chapters:• Chapter 1: India-Japan Relations in the 21st Century: Shifting from Mutual Values to Shared Interests

• Chapter 2: Indo-Japan Cooperation: Shaping the International and Regional Strategic Environment

• Chapter 3: Indo-Japan Economic Engagement: The Road Ahead

• Chapter 4: Indo-Japan Security Dialogue: The Traditional and Non-Traditional Agenda

• Chapter 5: Indo-Japan Science & Technology Cooperation

• Chapter 6: Building Social Networks for Future Cooperation

CHAPTER 1 India-Japan Relations in the 21st Century: Shifting

from Mutual Values to Shared Interests

1957

2007

Research QuestionsI. Why strong India-Japan relations are important

for Japan?

II.Why/Are strong India-Japan relations important for India?

III.How India-Japan relations developed in history?

IV.How contemporary India-Japan relations came about to be?

V. What are the ‘shared interests’ that motivate India and Japan to pursue stronger relations with each other?

Japan’s Biggest Setback is and has always been …..

“七七七七七七”-Fall seven times, stand up eight.

Japan: Land of Contradictions

• 73% of Japan is forested, mountainous, and unsuitable for agricultural, industrial, or residential use.

• It ranks 62nd in country comparison in terms of land area.

• Negligible mineral resources and is world‘s 2nd largest net importer of fossil fuels.

• Imports 60% of its foodstuffs.

• Highest Life Expectancy.

• Japan is one of the most densely populated countries.

• Has world‘s 10th largest population.

• Is 4th largest merchandise exporter in the world.

• One of the world‘s largest fishing fleets that account for 15% of global catch of fish.

• Lowest Birthrates.

Japan: Land of Contradictions

• Highest Levels of Public Debt for a country.

• Renounced right to declare war with Article 9.

• 30th Largest Military by Headcount.

• Three Non-Nuclear Principles of not possessing, producing or introducing nuclear weapons on Japanese soil.

• Only 1% GDP in defense budget lower than global average of 2.5%.

• One of the Largest Foreign Exchange Reserves in the World.

• Most modern defense establishments in the world.

• In Top 10 by its strength and sophistication.

• US Nuclear Umbrella and its own Existential Deterrence.

• 5th Largest defense budget in the World.

Some Important Questions

• Is Japan’s economy one facing economic recession and stagflation for more than two decades?

• Is Japan going to keep its Article 9 unchanged?

• Does Article 9 constrain the military sphere of action for Japan?

• Is the US-Japan security alliance changing its nature?

• Is Japan’s economy one of the only Asian G7 economy with one of the highest per-capita incomes?

• Is Japan going to become a ‘normal’ country?

• What is the effective military strength of Japan’s SDF and its synchronicity with US Forces?

• Is the US-Japan security alliance weakening?

Two Countries that hold largest influence on foreign policy of Japan…..

• Security Ally- Nuclear Umbrella.

• High possibility of attack on Japanese territory housing US bases in China-Taiwan confrontation.

• Doesn’t want to be dragged into a US war.

USA• Geopolitical Adversary- Unresolved Historical Legacies.

• Territorial Dispute- High Possibility of Accidental Clash at Sea.

• Largest trading partner- crucial for Japanese Economy.

China

Japan ‘s challenge of having to maneuver between its roles of ally and adversary….

USA China

US-ChinaPower Rivalry

+Economic

Interdependence

ALLY ADVERSARY

Japan’s Major Strengths:

• World Leader in Technology– R&D Budget exceeds Military Budget by $100 Billion.

• Economic Powerhouse– In Top 20 of Highest Per Capita Income (China 90th )– 2nd Largest Funder to UN– 2nd Highest Voting Power in World Bank– 2nd Largest Foreign Exchange Reserves and SDR’s in IMF– 2nd Largest Shareholder in IBRD– Top 5 Funders to DAC– Largest Funder to ADB

• US-Japan Security Alliance– Japan core of US Access to East Asia– Synchronicity of US-Japan forces: Air Sea Battle Concept– Existential Nuclear Deterrence

Japan’s Major Problems• Aging and Declining Population – Shrinking Labor Population

– Higher Savings & Less Demand

– Reducing Government Taxes- Government Debt worsening

– Stressing the Social Security Infrastructure

• East Asian Power Dynamics– US-China Relationship Dynamics– Military Rise of China– China’s Economic Power insured by ‘Mutual Stakes’– Unresolved Japan’s WWII Historical Legacies– Territorial Disputes– Lack of peace treaty with Russia– North Korea Nuclear & Missile Program

• Stagflation in Economy – Dependency on Energy & Resource Imports– Inability to act structural changes

• Short-termed Political Governments

India-Japan Strategic Relations

History of India-Japan Relations

• 七七七七七七七七七七七

• Buddhism

• Ancient Voyages by Monks

• Friendship between Intellectuals

• Indian Revolutionaries

• Radha Binod Pal’s Judgment

Modern day India-Japan Relations

• India’s refusal to sign San Francisco Treaty.– Signed separate peace treaty in 1952 waving all

reparation claims.

• India’s support for Japan re-entry into World Affairs.– 1951 Asian Games – 1955 First Afro-Asian Conference at Bandung– 1956 United Nations membership of Japan– 1958 Withdrew Article XXXV of GATT

• 1950s and 60s- PMs Visits– Nehru’s Elephant ‘Indira’– 1960 Crown Prince Akihito and Crown Princess Michiko’s

Visit

• 1958 India first recepient of Japanese ODA

Modern day India-Japan Relations

• Japan’s focus shifts to China, SE Asia– Nehru and India’s image hurt after Indo-China War (1962) – Japan states neutrality in both Indo-China (1962) and Indo-Pak

War. (1965)– Liao-Takasaki Pact (1963, renewed again 1968)– 1972 Nixon’s Visit to China – 1974 India’s Nuclear Test– 1978 Japan-China Treaty of Peace and Friendship

• Cold War Dynamics – 1970 India-Soviet Union 20 Year Friendship Treaty– India exports iron ore to Japan (1970s)– US defeat in Vietnam War– 1977 Fukuda Doctrine (Resolve to never become a military power

and Asia focused policy)

Modern day India-Japan Relations

• Revival in 1980s– 1981 Maruti Suzuki (production starts in 1983)– Japan only G7 country- US-Japan Trade Friction– India’s prestige up with strong NAM membership– 1984 Nakasone Yasuhiro’s Visit to India– Rajiv Gandhi’s three visits to Japan – Funeral Ceremony of Showa Emperor

• End of Cold War– India Balance of payments crisis– $300 million loan from ADB and $200 million from Bank of

Japan– 1998 India’s Nuclear Test– Strong Condemnation from Japan– Japan suspends ODA and all diplomatic contact with India

Contemporary India-Japan Relations

• Renewed Revival in New Millennium– 2000 March: Clinton’s Historic Visit to India– 2000 Aug : PM Mori’s Visit to India– 2001 Vajpayee’s visit to Japan

• US’s India Approval and Problems with China– 2007 Indo-US Civil Nuclear Agreement– 2005 Largest Anti-Japanese Protests in China– China-Japan trade exceeds $100 Billion– 2005 Japanese FDI to India starts doubling– 2005 PM Koizumi’s Visit to India- Eightfold Initiatives

• 2006 Strategic Partnership with Japan– PM Manmohan Singh’s Visit to Japan– 2008 Joint Declaration on Security Cooperation

Contemporary India-Japan Relations

• Increasing Economic relations– ODA : DMIC, DFC– 2010 CEPA– Trade (still minor compared to India-China or China-Japan

trade)

• Strategic to Military– 2007 Japan joins Indo-US Malabar Exercise– 2008 Joint Patrolling Agreement in Asia Pacific– 2012 First Bilateral Naval Exercise– Sale of ShinMaywa US-2 amphibious aircraft

• Shinzo Abe as Republic Day Chief Guest’ 142013 Japanese Emperor and Empress’ Visit

POLITICAL ECONOMIC MILITARY

Barring the US (and militarily Russia), India is the only country that stands close to China in all three spheres of political, economic and military power. India closely follows China be it as one of the fastest growing economies or in list of world’s most powerful militaries….

Source: Wikipedia

India-China problems: Competition for Influence and Resources

China-Pakistan Relations (Nepal, Bangladesh, Myanmar, Sri Lanka)

1962 Indo-China War

India’s asylum to Dalai Lama

Tawang and Aksai Chin- Flashpoints

Chinese military incursions into Indian Territory

Stapled visas

Cyber attacks

Source: Li Wei/China.org.cn

India views China as a security “CONCERN”

Japan views China as a security “THREAT”

India and China like Japan-China are millennia old neighbors. Modern relationship began in 1950 and expanded to a strategic partnership in 2005 . Being the largest Asian powers and fastest growing economies, competition is inevitable. However that does not mean cooperation does not exist…… But India is strongly wary of China-Pak Relations.

India is important for Japan: Political Sphere

No Historical BaggageBoth DemocraciesMutual Concern over ChinaIndia’s strong ties to US and ASEANInfluence in South AsiaG4 UNSC

Economic SphereCheap Labor in IndiaAlternative to ChinaIndian Domestic Market

Military SphereBalancing ChinaIndian Ocean SLOCs

Japan is important for India:

Political SphereInfluence in East AsiaNuclear CooperationG4 UNSC

Economic SphereTechnology TransfersJapanese FDITrade

Military SphereTechnology TransfersIndian Ocean SLOCsCybersecurity

Conclusion: “Shared Interests”

1. Balancing China

2. Increased Bilateral Trade

3. Increased Investments & Business

4. Technology Transfers

5. Higher Education

6. Hard Security: Maritime & Cybersecurity

7. Collaborating in International & Regional Multilateral Forums

8. Nuclear Energy Cooperation

9. Nuclear Disarmament

10. Soft Security: Disaster Management, Climate Change

Conclusion:“Shared Interests”

Thank You

APPENDIX1.Annual Bilateral Summits2.Annual Foreign Minister Level Strategic

Dialogue3.Vice Minister/ Foreign Sec. Level Dialogue4.2+25.Talks on Cyber Security6.Working Groups on Counter-Terrorism7.Dialogue on Maritime Affairs8.Japan US India Trilateral Dialogue9.Dialogue on Africa