India–Japan Relations

Published date01 January 2017
Date01 January 2017
Subject MatterArticles
India–Japan Relations:
Economic Cooperation
Enabling Strategic
Srabani Roy Choudhury1
Prime Minister Mori’s visit to India in 2000 began a new era in the India–Japan
partnership, resulting in a surge in Japanese aid and investment into India.
Japanese aid facilitated infrastructure development, health, water and sanitation
programmes of India. Japanese investment also predominantly flowed into the
automobile and the electronic sectors. The relationship followed the standard
practice that was witnessed in Japan’s relations with other countries in Asia.
However, Koizumi’s visit in 2005 brought a ‘strategic’ component into the pur-
view of the India–Japan partnership. From 2010 onwards, especially with Shinzo
Abe’s ascendency as the premier of Japan in 2012, this relationship further
strengthened the strategic trajectory. China’s growing presence in the Indian
Ocean and in the Asian region and the changing priorities of the US have drawn
the two nations closer, strengthening economic cooperation between the two
countries by diverting the Japanese investment to long-term infrastructure pro-
jects and many public–private partnerships which address the strategic concerns.
The main focus of this article is to highlight how the relationship between India
and Japan no longer rests only on ‘complementary economic needs’, but rather
that this economic cooperation is being used as a tool to gain strategic strength
in the larger canvas of the ‘Indo-Pacific region’.
Economic partnership, strategic partnership, joint statement, ODA, FDI, public
private partnership, connectivity
International Studies
54(1–4) 106–126
2018 Jawaharlal Nehru University
SAGE Publications
DOI: 10.1177/0020881718791404
1 Professor, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University,
New Delhi, India.
Corresponding author:
Srabani Roy Choudhury, Professor, Centre for East Asian Studies, School of International Studies,
Jawaharlal Nehru University, New Delhi 110 067, India.
Choudhury 107
In this century, India and Japan, one the largest democracy and other the richest
democracy in Asia, have chartered a relationship that has gained momentum not
only due to the compatibility that was identified between these countries but
also because of the changing dynamics that Asia as a region has encountered.
The uncertainties and compulsions faced by both nations on the domestic front;
the redefining of the US role in the region; China’s rise, first as an economic
power, and overtime, its stance of regional dominance; and more recently, North
Korea’s belligerent behaviour has increasingly proven conducive to the partner-
ship between the two nations. The literature on the India–Japan relations has
also seen a diversification—from pegging the relationship to ‘economic consid-
erations’ (Buckley, Cross, & Horn, 2012, Choudhury, 2011, 2014; Kojima,
2014; Urata, 2011) and thus claiming India to be an eco-strategic location to the
current literature that considers this relationship as strategic and defence-centric
(Brewster, 2010; Chijiwa, 2010; Nagao, 2013), thus making it a geo-political
move on the part of India and Japan to counter China and stake their claim in the
Indo-Pacific region.
There are certain prerequisites that are not only essential but also desirable
when two countries engage with each other. The India–Japan relations rest on
fundamental requirements that encourage a strong, deep and robust relationship.
The fact that both of them are democratic countries with shared values for the
‘rule of law’, respect for international order and a strong commitment for peace
and prosperity in the world gives this relationship a platform of trust and mutual
respect. Further, in the past also, both these nations have shared a relationship
based on reverence and friendship. This makes it easy for Japan, unlike many
other nations in Asia, to build a strong relationship with India, as there is no ‘his-
torical baggage’ between the two countries. Economically too, these two nations
have large areas of interest that are complementary in nature. The two nations
stand at two ends of the spectrum of economic development. While the Japanese
economy, which had seen tremendous economic growth and had matured into an
advanced economy, is facing a deep-rooted recession, the Indian economy, on the
other hand, has shown a positive growth path since liberalization, and according
to the BRICs report of 2003 (Wilson & Purushothaman, 2003) has gained stature
and become an important destination for foreign investment. Further, the ageing
society of Japan, which has nominal consumerism in sectors that Japan is the
leader, necessitates Japanese companies to find other markets. The slowdown of
the Chinese economy along with tensions in the relationship between Japan and
China encouraged Japanese companies to venture beyond the realms of East and
Southeast Asia. India, thus, becomes a natural destination as it has a burgeoning
middle class with strong purchasing power (Farrell & Beinhocker, 2007). Japan is
a capital rich country and a large amount of it is in postal savings, which is con-
trolled by Japanese government. Correspondingly, India has been in need of capi-
tal for a long term for the development of its infrastructure, take care of its energy
requirements, urbanization, health, education and other developmental needs.
Moreover, Japan is the forerunner in technological know-how and by the year

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