Trends in India Japan Relations

Year 2012 marked the 60th anniversary of the establishment of diplomatic relations between India and Japan. Certain economic and geopolitical circumstances make India and Japan global partners.

Economic Circumstances:

• India is an attractive market for Japanese business and industry. This is more so because Japan’s own domestic market is expected to shrink drastically in the coming decades due to a rapidly ageing society.
• In recent times Japan-China relations have been deteriorating due to territorial disputes. Thus Japan is trying to find a large and growing market comparable to China. India can fill this void.
• Moreover, many Japanese companies that have invested in China are looking for another country as well to invest in, in addition to China. This has been mainly because of the so-called “China risk”. It is now considered a realistic threat given China’s government-supported demonstrations targeted against Japanese businesses during the height of the East China Sea islands dispute last year.
• India is a growing market, which makes it attractive to Japanese investors. Indeed, Japan’s economic relations with India are now quite deep, as Japan’s share of exports as well as investments to India in total, has maintained an upward trend.
• Japan’s positive approach towards India is also beneficial for India. India is the largest recipient of Japanese official development assistance, and Japan is the third-largest investor in India.
• Japanese foreign direct investment can be utilised effectively for infrastructure development in India, including train systems and power generation, in order to swiftly tackle congested traffic and shortage of electricity in urban areas.

Geopolitical Circumstances

• Given their shared concerns about China, it makes sense for India and Japan to draw closer. India also has serious territorial disputes with China, and it is not at all a bad idea for India to establish close ties with Japan, which has similar concerns.
• From a geopolitical perspective, securing sea lanes in the Indian Ocean is critical for Japan, since natural resources, including oil and gas, are shipped through it to Japan. India can prove to be an asset in this regard.
• As a neighbouring big country in Asia that shares the values of democracy, human rights and the rule of law, India is a key partner for Japan in terms of national security and peace, and the stability of the region.
• The domestic and regional political and economic environment is conducive for a deepening of the Japan-India bilateral relationship, and for the two countries to cooperate closely on security. Cooperation between them can influence the future direction of not only Asia, but also the international community.

Conclusion

In view of the changed political conditions in Japan in the recent past amongst other changes, it is now considered one of the best times for Japan and India to deepen their relationship. Both need to re-confirm their commitment towards remaining important and amicable partners through deeper exchange and cooperation in all areas, while continuing to enhance their ties, encouraging harmonious relations and improving mutual understanding.