ASIA's DEMOCRATIC BULWARK: a THEORETICAL ANALYSIS of STRATEGIC CONVERGENCE BETWEEN INDIA and JAPAN in the EARLY 21ST CENTURY B

ASIA’S DEMOCRATIC BULWARK: A THEORETICAL ANALYSIS OF STRATEGIC CONVERGENCE BETWEEN INDIA AND JAPAN IN THE EARLY 21ST CENTURY

Ankit Panda Ankit Panda

ABSTRACT

In this thesis, I conduct a hypothesis-driven theoretical analysis of the strategic convergence between India and Japan. I argue that liberal and neoliberal theory most accurately explain the causes for the strategic convergence between India and Japan since 2000—that India and Japan experienced an alignment of transgovernmental and transnational economic interests that led to their convergence, and leaders in both countries demonstrated political will in rapprochement. While liberalism and neoliberalism are overwhelmingly useful in explaining the behavior of India and Japan, neorealism and constructivism predict certain aspects of the relationship. The final analysis ascribes qualitative scores to dependent variables of interest for each hypothesis in light of the empirical analysis. Chapters 1 and 2 introduce the thesis and its research design. In Chapter 3, I provide a decade-to-decade historical overview of India- Japan relations from the conclusion of World War II to 2000, followed by a more detailed year-to-year chronology from 2000 to 2011. The analysis in Chapter 4 is divided into two sections: economic and security. On the economic front, I argue that perceptions of mutual benefit drove the two nations to increasing economic interdependence, that Japanese Official Development Assistance policy towards India strongly correlates with increasing Japanese private sector interest in India, and that the Comprehensive Economic Partnership Agreement is evidence of neoliberal interdependence driving cooperation. The security analysis finds that rather than security dilemma thinking about the rise of China and external balancing in a neorealist sense, ideational complementarities and desires to reinforce their burgeoning economic ties drove the two nations together from 2000 to 2008. However, after 2008, neorealist explanations of Indo-Japanese security convergence are relatively more persuasive.

Asia’s Democratic Bulwark

CHAPTER 1: INTRODUCTION — A 21st CENTURY CONVERGENCE

I. INTRODUCTION

Although they shared tenuous bilateral links prior to 2000, India and Japan have strategically converged in the early 21st century. They now recognize and treat each other as “Strategic Global Partners,” share a Security Cooperation agreement (India’s first with a developed nation, and Japan’s first with an Asian nation), have a Comprehensive Economic Partnership Agreement, conduct joint maritime exercises in the Indo- Pacific, and annually engage in multiple strategic dialogues at the highest echelons of government. As democracies with 50-plus years of experience, their convergence is also evidence of a significant democratic bulwark aligning itself in an Asia where many strategists see the rise of China as a threat to stability and democratic values.1 Certainly many observers would describe this rapprochement between Asia’s largest democracy and its most prosperous one as an unsurprising and predictable phenomenon given China’s spectacular rise, but this would grossly oversimplify the

This thesis was presented to the faculty of the Woodrow Wilson School of Public and International Affairs at Princeton University in April 2012 in partial fulfillment of the requirements for a Bachelor of Arts in Public and International Affairs. I am indebted to Thomas J. Christensen and Gilbert Rozman who supervised my research and advised me throughout the writing process. I am also grateful to my several interlocutors in New Delhi and Tokyo, Mr. Gautam Bambawale, Dr. Srabani Roy Choudhury, Dr. Rajaram Panda, Commodore S.S. Parmar, Ambassador H.K. Singh, Dr. K.V. Kesavan, Ms. Sanjana Joshi, Mr. Venkatesh Verma, Ambassador Akitaka Saiki, Commodore Uday Bhaskar, Ambassador Alok Prasad, Mr. Hiroshi Tajima, Ms. Marie Izuyama, Ambassador Hiroshi Hirabayashi, Ambassador Hideaki Doumichi, Mr. Kanji Yamanouchi, Dr. Takenori Horimoto, and Mr. Jawed Ashraf, for their time, insight, and candor. I am additionally thankful for the support and accommodation afforded to me by the Ministry of Foreign Affairs of Japan, the Ministry of External Affairs of India, the Embassy of Japan in India, and the Embassy of India in Japan.

1 For evidence of such thinking, refer to C. Fred Bergsten, who refers to a “China Challenge,” in C. Fred Bergsten, China’s Rise: Challenges and Opportunities (Washington D.C.: Peterson Institute for International Economics, 2008), 11; and Robert D. Kaplan, who sees a significant Chinese maritime threat in East Asia. For his complete argument, see Robert D. Kaplan, "The South China Sea is the Future of Conflict," Foreign Policy, Sept/Oct 2011, http://www.foreignpolicy.com/articles/2011/08/15/the_south_china_sea_is_the_future_of_conflict. and Robert D. Kaplan, "The Geography of Chinese Power," Foreign Affairs, May/June 2010, http://www.foreignaffairs.com/articles/66205/robert-d-kaplan/the-geography-of-chinese-power.

Ankit Panda gamut of engagement between India and Japan since 2000, which offers greater complexity than such an explanation permits. In an effort to dispel such Sino-centric theses regarding the convergence between India and Japan, this thesis offers an understanding of the forces that caused India and Japan to expand their strategic cooperation on bilateral, regional, and global affairs since 2000 through a hypothesis-driven analysis comparing the relative explanatory power of liberal, neoliberal, neorealist, and constructivist theories of international relations (IR). I argue that liberalism and neoliberalism, which privilege intrastate domestic interests, economic interdependence, and absolute gains, respectively, are generally the most persuasive theories in understanding the convergence. Neorealist theory, which privileges strategic considerations arising from the rise of China, is not persuasive in describing the convergence since 2000, but is more accurate after 2008. Finally, constructivism, which focuses on common identities, norms, and values, provides a constant base of positive and supportive reasons for cooperation between India and Japan, but has various empirical shortcomings that do not allow it to emerge as the most useful theory in understanding this relationship. Additionally, there is a limited body of scholarly literature focused on the inception and evolution of this strategic alignment between India and Japan, and a majority of it has been largely descriptive of empirical trends, or written in the context of strategic thinking about the structural future of Asia. There is also a trend of referencing this relationship with a perfunctory nod in the literature on US-China relations, US-Japan relations, or Chinese and Indian foreign policy. This thesis coalesces this body of loosely linked analysis towards a more cohesive understanding of India-Japan relations, along with primary data and documents, and interviews conducted with a wide range of policymakers, academics, and analysts in both countries. Thus, it contextualizes much of the existent descriptive research on India-Japan relations in the language of IR theory, and provides a framework for understanding this bilateral convergence in the early 21st century.

Asia’s Democratic Bulwark

II. THEORETICAL PERSPECTIVE

The hypotheses (stated below) that form the core of the analysis in this thesis each rely on a theoretical backbone (stated in parentheses after each hypothesis): liberalism, neoliberalism, neorealism, and constructivism.

H1: India and Japan experienced an alignment of transgovernmental and transnational economic interests that led to their convergence. Additionally, leaders in both countries demonstrated political will in rapprochement. (Liberalism and Neoliberalism)

H2: Mutual concerns regarding China’s growth in Asia led India and Japan to strategic cooperation. Japan and India see Chinese power as a threat to their own security and overall stability in Asia, and see strategic cooperation as a stabilizing force. (Neorealism)

H3: Common values, identities, norms, a sense of shared history, and mutually compatible visions for Asia have led India and Japan to converge in the 21st century. (Constructivism)

H1 privileges liberalism and neoliberalism in its understanding of the convergence between India and Japan in the 21st century. While not conflating liberalism and neoliberalism, it acknowledges that the two theories are not mutually exclusive in an explanation of bilateral convergence. They key difference between the two theories is that liberalism ascribes primacy to intrastate domestic actors, and neoliberalism, while it permits an understanding of such intrastate actors, views states as a fairly unitary actors. Briefly paraphrased, liberalism, as it is used in this thesis,2 has three key assumptions: 1) state foreign policy is a function of actions by “individuals and private groups, who are on the average rational and risk-averse and who organize exchange and collective

2 The primary configuration of liberal theory in this thesis is that of Andrew Moravcsik; see, Andrew Moravcsik, “Taking Preferences Seriously: A Liberal Theory of International Politics,” International Organization, Vol. 51, No. 4, Autumn, 1997, 513 – 553. http://www.jstor.org/stable/2703498.

Ankit Panda action,” 2) states represent some subset of domestic society and interests, 3) states require a purpose—and underlying stake in the matter at hand— to “provoke conflict, propose cooperation, or take any other significant foreign policy action.”3 In essence, where neoliberal and neorealist theory view the state as a black-box unitary actor, liberalism acknowledges the influence of independent intrastate agents on foreign policy outcomes. Neoliberalism, as understood in H1, is largely based on the theories developed by Robert O. Keohane and Joseph S. Nye.4 Its key difference from liberalism is that it acknowledges states, through their transgovernmental interaction, as the primary actors defining international relations, but also allows for important non-state and intrastate actors to form transnational links. Under neoliberalism, states seek to maximize absolute gains rather than relative gains. Neoliberals also assume that states’ decision-making calculus assumes a game theoretic approach, focusing on outcomes that maximize the possibility for mutually profitable outcomes. Because such arrangements are more difficult without information exchange and manageable transaction costs, particularly in an anarchic international system, states tend to favor interstate institutions that allow for information exchange and easy transacting. This results in a state of complex interdependence where states increase the probability for cooperation through such institutional arrangements as well as through the minimization of military or coercive force as a foreign policy tool.5 As will be made explicit in the analysis in later chapters, for the purposes of H1 there is no immediate incompatibility between liberalism and neoliberalism that does not allow them to jointly contribute to a convincing explanation of the convergence between India and Japan.

3 Moravcsik, “Taking Preferences Seriously: A Liberal Theory of International Politics,” 516 – 524. 4 See Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984); and Robert O. Keohane, and Joseph S. Nye, Power and Interdependence: World Politics in Transition (Boston: Little, Brown and Company, 1977) for a detailed treatment of these ideas. 5 Keohane has since modified his thinking, now describing himself as an institutionalist; for additional perspective, see Robert O. Keohane, Power and Governance in a Partially Globalized World. (London: Routledge, 2002); and Robert O. Keohane, and Joseph S. Nye, “Interdependence in World Politics,” in Crane, G.T. & Amawi, A.,The Theoretical evolution of international political economy: a reader. (New York: Oxford University Press.)

Asia’s Democratic Bulwark

H2 applies neorealist theory, largely based in the works of theorists such as Kenneth Waltz, John Mearsheimer, and Robert Jervis,6 in its understanding. Neorealists maintain that in an anarchic international system, state behavior is best explained through a logic of rational self-help given certain information about the balances of power at any given time. With the fundamental objective of ensuring their own survival, states increase their offensive capabilities as a means of increasing their relative power vis-à-vis the initial configuration of balances of power. The security dilemma in neorealism emerges from an epistemic problem where no great power can be certain about the future actions of other great powers and cannot trust received guarantees. Cooperation is additionally limited by the fear of abetting relative gains in other states, which can disturb the initial balance of power. This balance of power is emergent from an international order where every state strives to maximize its relative power while constraining the relative power of others. States can engage in internal and external balancing activities—internally through changes in offensive capabilities, and externally through alliance behavior—to ensure that an acceptable structural equilibrium is maintained. In this analysis, China presents the role of a great power, while Japan and India, who are (separately) less powerful in offensive capabilities, engage in external balancing behavior through increased cooperation. Power typologies are an important consideration in this thesis. Theories of power transition, particularly A.F.K. Organski’s conception in his 1958 textbook World Politics, also inform my analysis.7 Particularly important are the concepts of status quo and revisionist powers. Status quo powers, a category under which Japan is classically placed, are states that occupy and have occupied an important role in the structure of the international order, particularly the liberal Western order created after World War II.8 Revisionist powers are the counterparts and

6 See particularly, Kenneth Waltz, Theory of International Politics, (Reading, MA: Addison–Wesley Pub. Co., 1979); John Mearsheimer, The Tragedy of Great Power Politics, (New York, NY: Norton, 2001); and Robert Jervis, “Cooperation under the Security Dilemma,” World Politics, Vol. 30, No.2, 1978. 7 This typology is developed and presented in A.F.K. Organiski. World Politics (New York: Alfred A. Knopf, 1958). It should be noted that power-types are a subject of hot debate; there is no consensus on the importance of the structural ambition of various rising powers. 8 Organski, World Politics.

Ankit Panda challengers to the status quo powers and actively seek to dismantle or reevaluate the structure of the international order. China is by no means (at least among international relations scholars) universally accepted to be a revisionist great power, but a strong body of literature exists supporting that assertion.9 India is neither status quo nor revisionist in the traditional sense. There is little evidence to suggest that India has the extra-regional power projection capabilities that are required for consideration as a “great power.” Under Organski’s typology, India would be classified as a “middle power,”10 but there is little doubt that India seeks “great power” status. Therefore, certain neorealists and neoliberals may understand Japan’s convergence with India as that of a status quo commercial giant and a less-developed middle power with a non-structurally threatening power appetite engaging in mutually-beneficial external balancing against aggressive Chinese revisionism. H3 applies constructivist IR theory (as formulated by Alexander Wendt) in its understanding of the convergence between India and Japan. 11 Constructivism rejects the self-help logic of neorealism, and instead assigns greater explanatory power for state behavior to norms, identities, values, and social processes. Wendt has argued that without turning to such variables, we know nothing of “whether two states will be friends or foes, will recognize each other's sovereignty, will have dynastic

9 For examples of the ongoing debate about China’s power type see, Sun Xuefeng, *The efﬁciency of China’s multilateral policies in East Asia (1997– 2007),” International Relations of the Asia-Paciﬁc, Vol. 10, 2010, http://irap.oxfordjournals.org/content/10/3/515.full.pdf, 515 - 541; Jeffrey W. Legro, “What China Will Want: The Future Intentions of a Rising Power,” Perspectives on Politics, Vol. 5, No. 3, September 2007, http://www.apsanet.org/imgtest/popsept07legro.pdf; Robert S. Ross, “China II: Beijing as a Conservative Power,” Foreign Affairs, March/April 1997, http://www.foreignaffairs.com/articles/52862/robert-s- ross/china-ii-beijing-as-a-conservative-power; David Shambaugh, “China or America: Which is the Revisionist Power?” Survival, Vol. 43, No. 3, Autumn 2001, http://www.tandfonline.com/doi/pdf/10.1080/00396330112331343025, 25 – 30. 10 Michael Green refers to India as a “Middle Power” in Michael Green, “Japan, India, and the Strategic Triangle with China," in Asia Responds to its Rising Powers: China and India, ed. Ashley J. Tellis et al. (Seattle: The National Bureau of Asian Research, 2011). 11 See Alexander Wendt, Social Theory of International Politics (Cambridge: Cambridge University Press, 1999), and Alastair Iain Johnston, “Thinking about Strategic Culture,” International Security, Vol. 19, No. 4 (Spring, 1995), 32-64; and Alexander Wendt, "Anarchy is What States Make of It: the Social Construction of Power Politics" in International Organization, Vol. 46, No. 2, Spring 1992.

Asia’s Democratic Bulwark ties, will be revisionist or status quo powers, and so on.”12 Constructivist understanding can also be foundational to explaining why states choose to cooperate or defect within liberal, neoliberal, and realist frameworks. States with shared values, positive perceptions of one another, civilizational links, and other such facilitating factors will be much more likely to interpret each other as potential partners. In the context of understanding Indo-Japanese cooperation, constructivism is particularly useful; the two are democratic countries with positive historical perceptions of one another and have compatible national identities and interests. All too often, theoretical analyses of cooperation and conflict dogmatically engage a single IR theory at the expense of a more comprehensive understanding based in an eclectic analysis. The hypothesis-driven approach in this thesis seeks to avoid this. Having said this, liberalism, neoliberalism, neorealism, and constructivism each may predict the convergence of Japan and India along different lines, but the body of empirical data supports certain hypotheses more than others. This thesis maintains that given the empirical research, liberalism and neoliberalism (as stated by H1) offer the most convincing explanations for the convergence between India and Japan.

III. JAPAN’S POLITICAL, SECURITY, AND ECONOMIC INTERESTS

While India’s relative power in Asia, and the world at large, is rising, Japan’s relative power has been on a steady decline since its apex as a major status quo commercial power13 in the late 1980s and early 1990s. Even so, Japan experts such as Michael J. Green are convinced that Japan’s “strategic response to the rise of China and India will nevertheless have a significant impact on the overall military, political, economic, and

12 Alexander Wendt, "Anarchy is What States Make of It: the Social Construction of Power Politics" in International Organization, Vol. 46, No. 2, Spring 1992, 396. 13 Japanese grand strategy as of the late-1990s has been described by certain observers as mercantile realism. For an argument to this effect, see Eric Heginbotham and Richard J. Samuels, “Mercantile Realism and Japanese Foreign Policy,” International Security, Vol. 22, No. 4, Spring, 1998, http://www.jstor.org/stable/2539243.

Ankit Panda ideational balance of power in Asia.”14 And Japan has indeed responded strategically: it has decisively recognized India as a major partner in Asia (along with the US and South Korea), and continues to struggle with accepting China’s place in Asia and the world. According to the power transition theory developed by A.F.K. Organski, states such as Japan are status quo precisely for their historical participation in creating the structural realities of the liberal order.15 Non-hegemonic status quo states such as Japan are likely to exhibit internal and external balancing against rising powers—the Indian case confirms this to an extent.16 In reality, however, Japanese internal balancing has been limited. While the role of the Self-Defense Forces (SDF) has been under revaluation, and public opinion in Japan has swung from its post-war pacifism to a more “defensive realism,” no Japanese administration has instigated a significant domestic policy change regarding the role of the military in Japanese foreign policy. 17 On the economic front, Japan continues to wrangle with the consequences of its “Lost Decade” of the 1990s (a term that some have begun to pluralize to include the 2000s), and continues to experiment with a plethora of economic policies to fight deflation, normalize interest rates, and boost overall growth.18 Politically, Japan’s strategic vision has been somewhat limited by a lack of stable leadership in domestic politics. Ever since the Democratic Party of Japan (DPJ) rose to power in 2009, Diet politics have been locked in relative gridlock.19 With the exception of Junichiro Koizumi’s five-year tenure, the average Japanese Prime Minister has held a term length of one-year in the 2000s. This has only become a problem recently, with the historic transition from the Liberal Democratic Party (LDP) to the DPJ. Prior to the DPJ’s rise, no matter how often the Prime Minister’s office fluctuated, the LDP was constantly in control—this

14 Michael Green, “Japan, India, and the Strategic Triangle with China," 131. 15 Organski, World Politics. 16 Michael Green, “Japan, India, and the Strategic Triangle with China," 131. 17 See Paul Midford, Rethinking Japanese Public Opinion and Security: From Pacifism to Realism? (Stanford: Stanford University Press, 2011), 14 – 15, and Christopher W. Hughes, Japan's Security Agenda: Military, Economic, and Evnironmental Dimensions (Boulder, CO: Lynne Rienner Publishers, 2004). 18 Tetsushi Kajimoto, “Japan's big GDP drop a worry for PM tax plan,” Reuters, February 13, 2012, http://www.reuters.com/article/2012/02/13/us-japan-economy-idUSTRE81C0GB20120213. 19 Hitoshi Tanaka, “A New Vision for the US-Japan Alliance,” East Asia Insights, Japan Center for International Exchange, Vol. 4, No. 1, April 2009, 1.

Asia’s Democratic Bulwark provided a stable precedent in terms of ideological expectations of elected leadership in the bureaucracy, and in turn strengthened the bureaucracy, especially the Ministry of Foreign Affairs. 20 However, DPJ Prime Ministers have suffered chronically low approval ratings from 2010 onward, although they were given a temporary reprieve after the Tohoku Earthquake and Tsunami on March 11, 2011. 21 After Naoto Kan’s resignation, and Yoshihiko Noda’s election as Prime Minister in September 2011, approval ratings have reassuringly moved up to 65% from 21% as of September 2011.22 Another result of this instability in Japanese political leadership is the marginalized bureaucracy, particularly the Ministry of Foreign Affairs, which is unlikely to “exercise as much inﬂuence over foreign policy as it once did.”23 In addition to the chronic problems (caused mainly by the aforementioned political instability) belying Japanese economic, military, and political strategy, the acute impact of the 9.0 magnitude earthquake and tsunami on March 11, 2011 in the Tohoku region of Honshu has had an immense impact on Japanese priorities and interests.24 The most immediate effects were economic. History suggested that, like the Great Kanto Earthquake of 1923 and the Great Hanshin Earthquake of 1995, recovery would be swift.25 However, Michael Green cites three burdens that inhibited Japanese recovery. First, Japan’s public debt, which was 200%26 of GDP, raised doubts on the government’s ability to pay for the estimated 600 billion USD it would take to reconstruct the regions most impacted by the disaster. 27 This development came after the global credit-rating agency Standard and Poor’s (S&P) had downgraded Japan’s sovereign debt rating from AA to AA- with a “stable” outlook due to the

20 Tanaka, “A New Vision for the US-Japan Alliance,” 1 – 2. 21 “New Japanese Cabinet approval rate polled at 65%,” The Yomiuri Shimbun, September 5, 2011, http://www.asianewsnet.net/home/news.php?sec=1&id=21358. 22 The Yomiuri Shimbun,“ New Japanese Cabinet approval rate polled at 65%.” 23 Tanaka, “A New Vision for the US-Japan Alliance,” 2. 24 Western experts such as Michael Green have emphasized the effect of the Tohoku earthquake in Japanese strategic thinking (see Green, “Japan, India, and the Strategic Triangle with China"). Additionally, several officials close to the Japanese Ministry of Foreign Affairs indicated as much to the author during research interviews for this thesis. 25 Green, “Japan, India, and the Strategic Triangle with China," 154. 26 As of September 2011, the IMF reports that Japanese public debt has increased to 220% of GDP. For more detail, see http://www.imf.org/external/country/JPN/index.htm. 27 Green, “Japan, India, and the Strategic Triangle with China," 154.

Ankit Panda fact that “Japan's strong external balance sheet and monetary flexibility partially offset the pressures stemming from the fiscal side.”28 A little over a month after the earthquake, S&P revised its outlook from “stable” to “negative,” driven specifically by the high cost of reconstruction.29 The second burden resulting from the Tohoku earthquake was the nuclear crisis caused by the failure of the Fukushima Daiichi nuclear plant. The failure of the plant was the worst nuclear crisis since the Chernobyl meltdown of 1986 and resulted in a 20 kilometer exclusion zone around the plant, and a great deal of environmental exposure to harmful ionizing radiation. 30 Prime Minister Noda declared that the plant had been stabilized on December 16, 2011, but that a total dismantling would take “decades.”31 The crisis at Fukushima undermined the Japanese public’s confidence in their government and PM Kan, as well as initiated a “re-examination of Japan’s larger energy strategy and likely a downgrading of reliance on nuclear power.”32 The third and final burden was the impotency of the political leadership in the wake of the crisis. Green describes PM Kan as “an irascible and unpopular politician” who had the support of a scant 20% of the Japanese population after the crisis.33 In an interview with the author, Hideaki Doumichi, the Ambassador for Economic Diplomacy at the

28 Takahira Ogawa and Elena Okorotchenko, “Ratings on Japan Lowered to ‘AA-‘; Outlook Stable,” Standard and Poor’s, January 27, 2011, http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245286301728. The analysts elaborate on the decision: “The downgrade reflects our appraisal that Japan's government debt ratios--already among the highest for rated sovereigns--will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s. Specifically, we expect general government fiscal deficits to fall only modestly from an estimated 9.1% of GDP in fiscal 2010 (ending March 31, 2011) to 8.0% in fiscal 2013. In the medium term, we do not forecast the government achieving a primary balance before 2020 unless a significant fiscal consolidation program is implemented beforehand.” The events of March 11th significantly reinforced this outlook. 29 Aki Ito and Keiko Ujikane, “Japan Rating Outlook Lowered to Negative by S&P on Quake Rebuilding Costs,” Bloomberg, April 27, 2011, http://www.bloomberg.com/news/2011-04-27/japan-debt-outlook-cut- to-negative-by-s-p-as-quake-rebuilding-adds-to-debt.html. 30 Peter F. Caracappa, "Fukushima Accident: Radioactive Releases and Potential Dose Consequences," Presentation given at the ANS Annual Meeting Special Session on the Accident at Fukushima Daiichi, Rensselaer Polytechnic Institute, June 28, 2011, http://www.ans.org/misc/FukushimaSpecialSession- Caracappa.pdf. 31 "Japan PM says Fukushima nuclear site finally stabilised," BBC World News, 16 December 2011, http://www.bbc.co.uk/news/world-asia-16212057. 32 Green, “Japan, India, and the Strategic Triangle with China," 155. 33 Green, “Japan, India, and the Strategic Triangle with China," 155.

Asia’s Democratic Bulwark

Japanese Ministry of Foreign Affairs and former Ambassador of Japan to India, insisted that the events of March 11th had an immense effect on Japan’s strategic thinking as well as its foreign relations.34 It is against this backdrop of economic, security, and political problems that Japan has continued to approach India as a strategic partner.

IV. INDIA’S POLITICAL, SECURITY, AND ECONOMIC INTERESTS

While India’s relative power in Asia and the world has been steadily increasing, the nation continues to wrangle with chronic problems that inform its strategic thinking. As will be discussed later, many of these problems have led India to perceive complementarity with Japan. The best example of this is on the economic front. In a notable speech on India’s foreign policy strategy, Indian PM Manmohan Singh issued the following remarks that were soon taken to form the cornerstone of what some analysts have called the ‘Manmohan Doctrine’: Ultimately, foreign policy is the outcome of … policy shaped by our commitment to our economic development … it is shaped by our yearning to recover our lost space in the global economy and our economic status in the comity of Nations … and our economic partners.35 Economic interests lend credence to a liberal-functionalist 36 understanding of Indian behavior. India has the economic needs of a vast developing country, thus it is no surprise that it seeks to make itself an attractive destination for foreign investment and trade, and cooperate with nations that offer tangible gains.

34 Hideaki Doumichi, Ambassador for Economic Diplomacy and former Japanese Ambassador to India, interview with the author in Tokyo, Japan, January 6, 2012. 35 Manmohan Singh, "Speech by Prime Minister Dr. Manmohan Singh at India Today Conclave, New Delhi", meaindia.nic.in, 25 February 2005. 36 Functionalism emphasizes a positive-sum understanding of interstate cooperation. Functionalists focus on common interests and the needs of states. Additionally, foreign policy finds its origins among technocratic domestic interests. For a deeper understanding of functionalism, see Ernst B. Haas, Beyond the Nation-State: Functionalism and International Organization, (Stanford: Stanford University Press, 1958); and David Mitrany, The Functional Theory of Politics, (New York: St. Martin's Press, 1976).

Ankit Panda

Thus, as an immense developing nation, a significant portion of Indian foreign policy is driven by its economic interests. Jagadish K. Patnaik extends this idea through a reevaluation of convention models in international political economy and argues that most of India’s foreign policy leverage originates from its ability to forge relationships with more powerful actors in the international system. This relationship building almost always begins with trade and development cooperation.37 The 123 Agreement with the US on civil nuclear cooperation—where India agreed to place its civilian and military nuclear facilities under IAEA safeguards in exchange for full civilian nuclear cooperation with the US— is a prime example of such an event. In the Indian view, “India’s international prospects have never looked better. The new optimism about India’s future, within the nation and the wider world, is not necessarily an irrational exuberance. It is based on sustained high economic growth rates that have touched eight per cent and more per annum in recent years.”38 However, India’s status as a developing Asian giant has left a particularly cumbersome regulatory environment, which has caused problems for foreign firms and investors wishing to do business in the country. As is demonstrated in later chapters, the regulatory environment in India has been a great source of frustration for the Japanese and an obstacle to a more profound economic relationship between the two nations. While many scholars argue that Japan’s dominant short-term strategic concern has focused on internal and external balancing against the rise of China,39 India’s immediate security environment complicates our understanding of its short-term and long-term strategic concerns. In the case of long-term strategic thinking, India perceives itself in transition from regional to great power status. However, there is a real strategic debate among Indian thinkers as to the type of power that India will become. Rahul Sagar identifies four major camps in Indian strategic

37 For the complete argument see: Jagadish K. Patnaik, “International Political Economy and Regime Analysis: A Developing-Country Perspective,” International Studies, Vol. 33, No. 2, (April 1996), http://isq.sagepub.com/content/33/2/155.citation. 38 "Address by External Affairs Minister on the occasion of National launch of Global India Foundation - India and the Global Balance of Power," Global India Foundation, 2011, http://www.globalindiafoundation.org/pranab.htm. 39 This is a core assumption in Michael Green, “Japan, India, and the Strategic Triangle with China."

Asia’s Democratic Bulwark thinking: “Moralists wish for India to serve as an exemplar of principled action; Hindu nationalists want Indians to act as muscular defenders of Hindu civilization; strategists advocate cultivating state power by developing strategic capabilities; and liberals seek prosperity and peace through increasing trade and interdependence.”40 Nonetheless, since the long-gone days of Nehruvian non-alignment during the early Cold War, and the declamation of the Look-East policy in the early 1990s, Indian grand strategy and foreign policy have seldom been declared in a cohesive doctrine. 41 Indian strategists have additionally remarked that India’s response to its “deteriorating external environment” (Pakistan and Afghanistan in the West, China and Nepal in the North, and Bangladesh and Myanmar in the East) has been “reactive and ad hoc.”42 Furthermore, India is currently involved with border disputes with Pakistan and China, and both nations have been willing to go to war with India over these territories.43 India’s primary short-term security concerns thus include the territorial disputes with these countries (including the possibility of war or, at least, skirmishes) and the threat of terrorism within the country.44 Additionally, the nature of Indian power in a realist sense is somewhat mixed: it has been described as sitting at the crossroads between “military underdog” and “credible deterrent.”45 In support of the former description, the humiliating defeat at the hands of Mao Zedong’s People’s Liberation Army (PLA) in 1962 left a deep scar

40 Rahul Sagar, “State of Mind: What kind of power will India become?” International Affairs, 2009, Vol. 85, No. 4, 801-816. 41 C. Raja Mohan, “India and the Balance of Power,” Foreign Affairs, July/August 2006, http://www.foreignaffairs.com/articles/61729/c-raja-mohan/india-and-the-balance-of-power?page=show. 42 See “Japan’s leading foreign affairs journal interviews Brahma Chellaney,” from “Japan-India Links Critical for Asia-Pacific Peace and Stability,” Gaiko Forum, Fall 2007, Vol. 7, No. 2, http://chellaney.net/2007/11/10/japans-leading-foreign-affairs-journal-interviews-brahma-chellaney/. 43 The major territories under dispute include Kashmir (claimed by India and Pakistan), Aksai Chin (claimed by India and China), and Arunachal Pradesh (claimed by India and China). For a brief summary of the triadic disputes, see; "Fantasy Frontiers: Indian, Pakistani and Chinese border disputes," The Economist Online, February 8, 2012, http://www.economist.com/blogs/dailychart/2011/05/indian_pakistani_and_chinese_border_disputes. For a more detailed exploration of the Sino-Indian disputes, see; Mohan Malik, "India-China Competition Revealed in Ongoing Border Disputes," Power and Interest News Report, October 9, 2007, http://www.gees.org/documentos/Documen-02608.pdf. 44 The threat of terrorism is particularly prominent in India which has suffered multiple attacks every year since 2000. 45 Sreeram Chaulia, “India’s ‘power’ attributes,” Handbook of India’s International Relations (London: Routledge, 2011), 24.

Ankit Panda in the collective psyche of Indian strategists, particularly the nationalists.46 The trend in Indian military strategy ever since has been an asymptotic approach to a “credible deterrent” status. Reasons for this include India’s rather temperamental macroeconomic performance through the Cold War, and its lack of cohesive domestic political will. These factors inhibited a linear trajectory to great offensive capabilities.47 Nonetheless, the trend in India’s power projection capabilities in the 21st century have been overwhelmingly positive and has cemented its position as a credible force to be reckoned with. Defense spending has hovered at around 2% of GDP for much of the past decade and strategists have called for an increase to 3.5% of GDP.48 Regardless of this sizeable spending, strategists from within the Indian military and in academia see India’s excessive arms importing as a long-term strategic problem,49 calling instead for the development of self-reliance through more robust domestic manufacturing capabilities. 50 India has also emerged as a regional maritime power in the Indian Ocean, with a formidable navy. It is against this backdrop of complex strategic interests that India continues to engage with Japan.

46 Chaulia, “India’s ‘power’ attributes,” in Handbook of India’s International Relations, 25. 47 Offensive and defensive realists alike have argued for a strong economy as the foundation of a powerful military capability. Sreeram Chaulia writes: “A glance at the ebbs and flows in India’s defence spending in the 1990s shows that the lows correspond with tight economic conditions, balance of payments crises and dependence on conditional foreign aid,” in Chaulia, “India’s ‘power’ attributes,” in Handbook of India’s International Relations, 25. 48 Vivek Raghuvanshi, “India Eyes Fund Hike, Returns Revenues,” Defense News, 22 September 2008. 49 Hari Kumar, “Why has India become the world’s top arms buyer?,” The New York Times, March 21, 2012, http://india.blogs.nytimes.com/2012/03/21/why-has-india-become-the-worlds-top-arms-buyer/. 50 Brahma Chellaney, a noted Indian strategic thinker, has argued for greater self-reliance in Indian defense manufacturing. See: Brahma Chellaney, “Securing India’s Future in the New Millennium,” Centre for Policy Research, New Delhi, 1999.

Asia’s Democratic Bulwark

CHAPTER 2: RESEARCH DESIGN

I. HYPOTHESES

Analysis of the evidence will test the hypotheses stated in this section. Analysis of Indian and Japanese foreign policy will test the underlying causal forces in bringing the two countries to sudden strategic rapprochement in the 21st century. The research question is: what are the main causes of strategic convergence between India and Japan since 2000? The time frame for the analysis, stated more precisely, extends roughly from August 2000, when Japanese PM Mori visited India, to early March 2012. Since this is a relatively long period of time given the volume of changes in bilateral relations, the analysis is split around 2006, when the two states declared a “Strategic Global Partnership” (SGP). This thesis will test the following hypothesis in explaining the convergence between India and Japan:

In order to consider the viability of alternative explanations for the convergence, the analysis will also test the following alternate hypotheses:

H3: Common values, identities, norms, a sense of shared history, and mutually compatible visions for Asia have led India and Japan to converge in the 21st century. (Constructivism)

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II. TESTING THE HYPOTHESES

i. Independent Variables

The independent variables (IV), or the possible causes for bilateral convergence, are drawn primarily from the theories underlying each hypothesis. In H1, the liberal and neoliberal hypothesis, the independent variables are: the economic interests of individual and group agents within India and Japan, the economic interests of the governments of India and Japan (seeking to maximize absolute gains), the political will of leaders in India and Japan, and finally, the level of complex interdependence between the two countries. Economic interests of individual and group agents in either country revolve around prospects for absolute gains. In the case of this hypothesis, these gains are primarily commercial. Liberal theory also requires intra-state agents to push for representation of their policy interests in foreign relations. In H2, the neorealist hypothesis, the independent variables are: perceptions of threats to national interest and security from China, external balancing strategy, and desires to increase relative power. Perceptions of threats are measured through an analysis of the strategic literature within each country and public statements by governmental agents regarding China’s foreign policy. External balancing strategies are seen in the changing security policies of India and Japan since 2000— India has participated in maritime cooperation activities with multiple states, and Japanese foreign policy since PM Koizumi has begun engaging the Japan Self-Defense Forces (JSDF) beyond Japan’s immediate neighborhood. Finally, desires to increase relative power are a core neorealist assumption that can result in increased strategic cooperation in certain cases. While there is no doubt that this is a consideration for India in its foreign relations, the literature supporting such ambition in Japan is limited. Nonetheless, it would be negligent to test the plausibility of neorealism without acknowledging this possibility. In H3, the constructivist hypothesis, the independent variables are perceptions of normative compatibility in India of Japan, and vice versa. The term ‘normative compatibility’ broadly encompasses ideological commitments to democracy, human rights, the rule of law, multilateralism, and peaceful cooperation—ideals that India and Japan generally share. One significant area of normative discord is about the thought surrounding nuclear energy and nuclear weapons, which is

Asia’s Democratic Bulwark examined in some detail in this thesis. Additional evidence of these constructivist variables are found in analyses of Indian and Japanese policy that focus on ideological rhetoric, terms used by Indian and Japanese leaders in joint statements and declarations, and public opinion.

ii. Dependent Variable

The dependent variable is the change in strategic convergence between India and Japan, which is measured with reference to the frequency, and importance of positive bilateral interactions between the two states. Examples of indicators of strategic convergence include bilateral dialogues, economic and security agreements, maritime exercises, tri- and multilateral cooperation in which both parties participate, coordination at multilateral fora, and cultural exchanges. Additionally, rhetoric and joint statements, while not concrete actions, indicate convergence. Strategic convergence is, to use the language of IR theory, strictly a transgovernmental (or inter-state) phenomenon, and is multifaceted (hence, ‘strategic’). Essentially, the aforementioned examples are those of inter-state behavior (strategic convergence) that this thesis purports to derive causation for through qualitative hypothesis testing and empirical analysis.

iii. Final Evaluation

Table 1.1 visually presents the canvas for the qualitative analysis in this thesis. The independent variables are categorized according to their theories and listed in the left column. The relative effect each independent variable has had on the convergence between India and Japan, before and after the Strategic Global Partnership (SGP) in 2006, will be represented with a final measurement with three possible values: 1) ++, indicating a major positive impact on strategic convergence, 2) +, indicating a negligible, but notable, positive impact on strategic convergence, and 3) N, indicating no impact, or a lack of evidence in support of strategic convergence. Chapter 5 presents the final version of the table with the measurements of the dependent variable in light of the analysis in Chapter 4.

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Table 1.1: Cause-Effect Analysis Framework for Convergence Between India and Japan Causes for Interstate Convergence (IV) India-Japan Convergence (DV) Pre-SGP Post-SGP (++) / (+) / N (++) / (+) / N H1: Liberal and Neoliberal Liberal Economic interests of private Indian – – actors Economic interests of private Japanese – – actors Political will of leaders in India – – Political will of leaders in Japan – – Neoliberal Economic interests of the Indian – – government Economic interests of Japanese – – government Complex interdependence – – H2: Neorealist Threat perception from China in India – – Threat perception from China in Japan – – External balancing strategy in India (security – – dilemma) External balancing strategy in Japan (security – – dilemma) Indian desire to increase relative power – – Japanese desire to increase relative power – – H3: Constructivist Perceptions of normative compatibility in India – – Perceptions of normative compatibility in Japan – –

Asia’s Democratic Bulwark

CHAPTER 3: A CHRONOLOGY

I. INTRODUCTION

The following chapter contains a chronology of the salient features of the India-Japan bilateral relationship with a focus on events and phenomena that have been strategically important for each nation, and certainly the development of their bilateral relationship. This chronology will address this relationship since the conclusion of the Second World War, and, in the interest of maintaining a relevant scope, will not describe each state’s national development and history since that point. World War II itself was a curious time for each nation as Indian soldiers fought the Japanese in Asia under the British Empire while, simultaneously, “Indians under the Indian National Army fought the British with Japanese support.”51 At the International Military Tribunal for the Far East in 1946, Indian Judge Radhabinod Pal was the sole dissenter against prosecuting Japanese officials, including Prime Minister Hideki Tojo, who had been brought to trial for alleged war crimes.52 This latter event, while it may have faded into the annals of history in the judge’s homeland, has cemented itself in the Japanese political memory, particularly among nationalists, to the extent that Judge Pal is honored at Tokyo’s controversial Yasukuni Shrine, and has found great praise in contemporary nationalist Japanese media. Former Prime Minister Shinzo Abe recognized Judge Pal’s position in Japanese history when he confidently asserted in front of the Indian Parliament that “Justice Pal is highly respected even today by many Japanese for the noble spirit of courage he exhibited during the International Military Tribunal for the Far East.”53 India and Japan largely share a conflict-free memory of their pre-1945 interactions—a factor that has exempted their relationship from

51 PG Rajamohan, Dilbahadur Rahut, and Jabin T Jacob, "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," Indian Council for Research on International Economic Relations Working Paper, No. 212, April 2008, 1 - 32. 52 PG Rajamohan et al., "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 6. 53 Abe quoted in Norimitsu Onishi, “Decades After War Trials, Japan Still Honors a Dissenting Judge.” The New York Times. August 31, 2007. http://www.nytimes.com/2007/08/31/world/asia/31memo.html.

Ankit Panda the historical wounds that East Asian nations in particular recall in their pre-1945 interactions with Japan.

II. INDIA AND JAPAN BETWEEN THE SECOND WORLD WAR AND THE COLD WAR

While India and Japan have enjoyed largely friendly and stable bilateral relations since the end of the Second World War, the relationship saw its seeds sown largely against the backdrop of each nation’s post-war identity conundrums. In 1947, two years after the end of the Second World War, India gained independence from the British Empire and Japan updated its constitution for the first time since 1890. This year marks a synchronous point for both nations in the sense that their political identities had experienced a marked turn; this chronology will thus begin in 1947. For India, it was a time of jubilant celebration and state building post-independence, and for Japan, it was a time of sober reflection and national reconstruction. In addition to Judge Pal’s dissent at the Tokyo Trials, Indian Prime Minister Jawaharlal Nehru further won Japanese favor, especially with the nationalists, by his refusal to attend or sign the Treaty of San Francisco (although Nehru’s reasons54 for doing so had more to do with a desire to assert a merit-based non- aligned foreign policy).55 Nehru deemed certain provisions of the treaty “as constituting a limitation on Japanese sovereignty and national independence.”56 Progressive Japanese, who did not laud Nehru’s decision at the time, viewed the treaty positively. Formal diplomatic relations between Japan and India were established on 28 April 1952,57 a date that also saw India waive all claims

54 Rajamohan et al. elucidate this further: "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 6: “India applied two crucial tests to determine whether it was going to participate in the Japanese Peace treaty. First, did the treaty accord Japan a place of honour, equality and contentment in the family of nations? Second, did the treaty contribute to amity and friendship in the Far East? On both counts the treaty was found to fall short of India’s expectations and, therefore, it chose not to participate.” 55 P.V. Narasimha Rao, "Nehru and Non-alignment," Mainstream Weekly, Vol. XLVII, No. 24, (May 30, 2009), http://www.mainstreamweekly.net/article1399.html. 56 Rao, “Nehru and Non-alignment.” 57 K.V. Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," Observer Research Foundation Occasional Paper #15, August 2010, 1.

Asia’s Democratic Bulwark to war reparations from Japan.58 On that very same day, the Security Treaty Between the United States and Japan came into effect, having being signed a year earlier and gone through Senate and Presidential ratification. 59 In 1954, the US-Japan Mutual Defense Assistance Agreement was signed and is considered to define the beginning of Japan’s Cold War alignment with the United States. 60 This had a profound impact on Japan’s strategic thinking towards Asia during the Cold War,61 and certainly inhibited any strategic approaches towards India.

III. INDIA AND JAPAN DURING THE COLD WAR (1949 – 1991)

In order to understand the divergence of bilateral strategic interest between India and Japan during the Cold War, it is crucial to understand the three pillars of strategic foreign policy that drove each nation’s outlook. In the 1950s, Indian strategic thought was driven by non- alignment, peaceful coexistence, and recognition of “China’s rightful place in the world”—although in practice, the Indians grew closer to the Soviet Union and the Warsaw Pact. As an almost perfect foil, Japanese strategic thought was driven largely by its alignment with NATO and the U.S., and its desire to contain the Soviet Union, and Mao Zedong’s new People’s Republic of China. Additionally, Robert A. Scalapino identifies the 1950s for Japan as “the period of ‘total reliance,’ both physically and conceptually on U.S. initiative.” 62 Japan’s strategic goals sought U.S. approval as a sign of security in a time when “a premier could not even

58 "Ambassador Ronen Sen's remarks at a luncheon meeting of the Japan Society in New York," Embassy of India in Washington DC, February 15, 2008, http://www.indianembassy.org/prdetail660/--%09-- ambassador-ronen-sen's-remarks-at-a-luncheon-meeting-of-the-japan-society-in-new-york 59 American Foreign Policy 1950-1955, Basic Documents Volumes I and II, General Foreign Policy Series 117 (Washington DC: Department of State Publication 6446, US Government Printing Office 1957) qtd. in Yale Law School, The Avalon Project (Documents in Law, History, and Diplomacy), http://avalon.law.yale.edu/20th_century/japan001.asp 60 Christopher W. Hughes, Japan's Security Agenda: Military, Economic, and Evnironmental Dimensions (Boulder, CO: Lynne Rienner Publishers, 2004), 119 - 120. 61 See Gilbert Rozman, Kazuhiko Togo, and Joseph P. Ferguson, Japanese Strategic Thought Towards Asia (New York: Palgrave Macmillan, 2007). 62 Robert A. Scalapino, The Foreign Policy of Modern Japan (University of California Press, 1977), 361.

Ankit Panda refer precisely to national security or defense.”63 For Japan, the single most important partner in the foreign policy realm was unequivocally the United States. The differences in foreign policy goals in the 1950s drove perceptions of one another between India and Japan, and led to each seeing the other as neither enemy nor friend. The relationship grew slowly and with a certain wariness about it, especially in matters of security and political influence. The prime motivators for the relationship in the 1950s were “economic, commercial and cultural matters where relations progressed extremely slowly.” 64 If we understand Cold War strategic interests as being driven largely by whatever bloc a nation happened to be a part of, then it is hardly surprising the India-Japan relationship did not grow during this time. While Japan’s strategic objectives in the 1950s were fairly two- dimensional and represented little interest in normative leadership due to the nation’s relative weakness, Indian statesmen had demonstrated a strong desire to promote the normative position of “non-alignment” as coined by then Indian Ambassador to the United Nations, V.K. Krishna Menon. Prime Minister Nehru later, in a speech on Sino-Indian relations, identified the five pillars of this non-aligned outlook. 65 The five principles identified by Nehru were 1) mutual respect for territorial integrity and sovereignty, 2) mutual non-aggression, 3) mutual non- interference in domestic matters, 4) equality and mutual benefit, and 5) peaceful coexistence.66 India demonstrated a strong interest in normative posturing and in offering an alternative to the NATO/Warsaw Pact dichotomy that defined the Cold War. In 1955, the Bandung Conference took place under the auspices of Indonesian President Sukarno and is generally noted as the prelude to the inception of the informal “Non- Aligned Movement (NAM)” which occurred in September 1961 at The

63 Scalapino argues that it was taboo for Japanese officials to speak of rearmament or self-defense; see Scalapino, The Foreign Policy of Modern Japan, 361. 64 PG Rajamohan, Dilbahadur Rahut, and Jabin T Jacob, "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," Indian Council for Research on International Economic Relations Working Paper, No. 212, April 2008, 7. 65 “'Non-alignment' was coined by Nehru in 1954,” The Times of India, September 18, 2006, http://articles.timesofindia.indiatimes.com/2006-09-18/india/27796062_1_nam-alignment-jawaharlal-nehru. 66 Nehru termed this “Panchsheel” or “The Five Restraints.”

Asia’s Democratic Bulwark

Conference of Heads of State or Government of Non-Aligned Countries in Belgrade. Nehru’s strategic vision and strong desire to remain non-aligned ensured that India’s relationship with Japan would remain, at best, a peripheral and solely commercial relationship for the duration of the Cold War. Nonetheless, Nehru did pay a visit to Japan in 1958; this visit marked the first occasion that the President of India “left the shore of India to pay a state visit to another country,”67 and came in the wake of Japanese Prime Minister Nobusuke Kishi’s visit to India in 1957. His visit was received very warmly by the Japanese and served as a symbolic extension of the bilateral relationship. That same year, Japan began its Yen Loan program (that would later become incorporated into its Official Development Assistance [ODA] program) with India. This engagement was amplified when Japan’s Crown Prince and Princess visited India in 1960. The remainder of the 1960s, however, did open up possibilities for growth in the India-Japan relationship. Political relations grew with the visit of Japanese Prime Minister Ikeda to New Delhi in 1961. By the early 1960s, Japan had transformed into an export source in East Asia.68 Dr. Harish Chandra Tripathi notes that “it was realized that politically both India and Japan had few common goals and objectives.”69 On his visit, Ikeda noted that “…Tokyo and Delhi are natural pegs of a system of security.”70 This strategic claim landed on deaf ears in New Delhi. The Indo-Pakistani War of 1965 provoked an interesting reaction from the Japanese government that took the relationship in a warmer direction. The Japanese Prime Minister’s special envoy that year, Shojiro Kawashima, strongly condemned the Pakistani aggression.71 Later that year, India and Japan agreed to annual “consultative conferences” to be held alternatively in Tokyo and New Delhi.72 This was an important event in several senses. Firstly, India was the first Asian country with

67 Harish Chandra Tripathy, Indo-Japanese Relations (Patna: Nand Kishor Singh, 2001), 110 - 186, 244 - 251. 68 See William K. Tabb, The postwar Japanese system: cultural economy and economic transformation (Oxford University Press, 1995). 69 Tripathy, Indo-Japanese Relations, 141 – 142. 70 Tripathy, Indo-Japanese Relations, 141 – 142. 71 Tripathy, Indo-Japanese Relations, 142. 72 Tripathy, Indo-Japanese Relations, 141 – 142.

Ankit Panda whom Japan had set up such an arrangement. Secondly, these meetings were not designed for the promotion of mutually crafted policies, but for “free and frank exchange of views on matters of common interest.”73 Japan had extended such a gesture to only five other countries: the United States, Canada, West Germany, the United Kingdom, and France. From 1966 to 1970, meetings were held annually as planned. In June 1969, Indian Prime Minister Indira Gandhi visited Japan. This visit deepened political relations, particularly with regards to security issues in the region (a special focus was given to Vietnam, Laos, and Cambodia, and to the US campaign in the region). Notably absent from many Japanese and Indian summits were the topics of 1) Kashmir, 2) the Kurile Islands, and 3) the problem of China.74 75 The Sino-Indian War of 1962 had left relations between the two states fragile. Similarly, Japan’s security alliance with the United States made it highly skeptical of the communist regime on the mainland. Regarding the Indo-Japanese state of interaction at this point, P. A. Narsimha Murthy noted in 1967, “There can be no meaningful Indo-Japanese political contacts if the two countries cannot support each other on these problems.”76 Furthermore, India continued to view Japan “only as a ‘client state’ aligned to the US’” during this era, inhibiting either nation viewing the other as a normative partner.77 The 1970s and early 80s were a relatively unexciting period in Indo-Japanese relations; cordial relations continued, and economic ties remained strong. Japan’s Cold War allegiance with the United States left it wanting little to do, strategically speaking, with India. Relations were friendly, but this was not a period of rapprochement for the bilateral relationship. Regarding Japan in the 1970s, Takashi Inoguchi writes: “The image of Japan as opportunist or autonomy seeker arose in the 1970s. The search for energy supplies and overtures to Organization of

73 Tripathy, Indo-Japanese Relations, 143. 74 P. A. Narasimha Murthy, India and Japan, Dimensions of their Relations: Economic and Cultural, (New Delhi: Lancer's Books, 1993), 160 – 162. 75 Tripathy, Indo-Japanese Relations, 144. 76 P. A. Narasimha Murthy, India and Japan, Dimensions of their Relations: Economic and Cultural, (New Delhi: Lancer's Books, 1993), 160 – 162. 77 K.V. Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," Observer Research Foundation Occasional Paper #15, August 2010, 3.

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Petroleum Exporting Countries (OPEC) and the Soviet Union by Prime Ministers Tanaka and Miki are oft-cited examples. In contrast, in the mid-1980s Prime Minister Nakasone’s clear opposition to the Intermediate Nuclear Forces of the Soviet Union and his security linkage with Western Europe are examples of a supporter’s role.”78 Simultaneously, India had experienced a transformation. After Prime Minister Nehru’s death in 1964, Indira Gandhi established herself as the new driver of Indian strategy. In 1971, India and Pakistan were yet again engaged in a military conflict; this ultimately resulted in the liberation of East Pakistan, which became the state of Bangladesh. India’s primary security concerns were very much regional during this decade. Additionally, India moved farther away from NATO-aligned Japan when it signed the Indo-Soviet Treaty in August 1971.79 In the 1970s, “New Delhi's international position among developed and developing countries faded in the course of wars with China and Pakistan, disputes with other countries in South Asia, and India's attempt to balance Pakistan's support from the United States and China by signing the Treaty of Peace, Friendship, and Cooperation with the Soviet Union in August 1971.”80 India and Japan did not converge on any major points of foreign policy during this decade. The most significant link between the two nations was the continuation of Japanese Official Development Assistance (ODA) in the form of Yen Loans. In the 1980s, Japanese strategic thought resituated the nation as a “systemic supporter,” partly out of the natural synthesis that its alliance with the United States and by necessity of its economic resurgence.81 The 1980s was also a period marked by intensifying trade relations between Japan and the United States. There were, however, several notable events in India-Japan relations in the 1980s. In 1984, after 23 years of no visits,

78 Gilbert Rozman, Kazuhiko Togo, and Joseph P. Ferguson, Japanese Strategic Thought Towards Asia (New York: Palgrave Macmillan, 2007), 36. 79 P. A. Narasimha Murthy, India and Japan, Dimensions of their Relations: Economic and Cultural, (New Delhi: Lancer's Books, 1993), 394. 80 "A Country Study: India," United States Library of Congress, last modified March 22, 2011, http://lcweb2.loc.gov/frd/cs/intoc.html 81 Gilbert Rozman, Kazuhiko Togo, and Joseph P. Ferguson, Japanese Strategic Thought Towards Asia (New York: Palgrave Macmillan, 2007), 35.

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Japanese Prime Minister Yasuhiro Nakasone visited India. 82 Prime Minister Rajiv Gandhi reciprocated with visits to Japan in 1985, 1987, and 1988. 83 In the course of these visits, the two nations had reestablished high-level dialogues. One of the primary drivers of the relationship was the highly significant Indo-Japanese joint venture Maruti-Suzuki, which involved Japanese auto manufacturer Suzuki and Indian auto manufacturer Maruti.84 The venture went on to capture over 50% of the Indian consumer automobile market in the next decade. In November 1985, the two nations also signed the Science and Technology Agreement; this “increased the frequency of exchanges in this area.”85 While the relationship had become more profound towards the twilight of the Cold War, it had not truly expanded into one of geopolitical significance; the main drivers of friendship between the two nations were economic, and their relationship fundamentally lacked an acknowledgement of a common strategic vision for Asia or the world. While seldom mentioned in the broader literature on India-Japan relations, in March 1986, a seminar between India and Japan took place in New Delhi, organized by the India International Centre and the International House of Japan, with assistance from the School of International Studies of Jawaharlal Nehru University, the Institute for Defence Studies and Analyses, and the Ministry of Foreign Affairs of Japan.86 U.S. Bajpai, the editor of a short volume with a recording of several of the exchanges, notes “the seminar was essentially an exercise in mutual comprehension.” 87 It is notable that the leader of the Indian delegation at this seminar was none other than Dr. Manmohan Singh— who would become the Prime Minister of India in 2004, and oversee a period of massive expansion in India-Japan relations. Singh had a frankly realist assessment of Japanese perceptions of India as well as Indian

82 Susan Maitra, "Nakasone visits India," Executive Intelligence Review, Vol. 11, No. 20, (May 22, 1984): 40 – 41, https://www.larouchepub.com/eiw/public/1984/eirv11n20-19840522/eirv11n20-19840522_040- nakasone_visits_india.pdf. 83 PG Rajamohan et al., "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 7 - 9. 84 PG Rajamohan et al., "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 9. 85 PG Rajamohan et al., "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 9. 86 U.S. Bajpai, “India and Japan,” (Delhi: Lancer International, 1988). 1. 87 U.S. Bajpai, “India and Japan,” 1.

Asia’s Democratic Bulwark perceptions of Japan at this time. 88 Singh noted a strong need for development from rich states like Japan in India’s development, and called Japan’s investment in the US (which was very pronounced in the 1980s) evidence of “the malfunctioning of the international economic system.”89 Singh offered a vision of what cooperation between India and Japan ought to look like in the 21st century: All the same, the world where all regions experience rapid growth may well be a zero-sum world, which, if left to its own devices, will only accentuate the conflict between the haves and the have-nots. This is one more reason why the twenty-first century must be the century of concerted world economy, not of a collection of concerted national economics or of their various groupings. Such then are the prospects and problems of the future as we begin to perceive them at present. And it is perceptions of this sort which should make for long-run cooperation between India and Japan.90

IV. INDIA AND JAPAN IN THE 1990S

The collapse of the Soviet Union necessitated a political, economic, and foreign policy reevaluation in India and Japan. Japanese strategic vision was blurred during this time. Gilbert Rozman, et al. note that for Japan, the early 1990s were an era of “missed opportunity.”91

88 In giving his impressions on Japan, Singh stated: We have to reckon that international relations in the final analysis are power relationships. And the comprehension of what underlies these power relations is very important in a world which is increasingly becoming more and more interdependent. Whether we like it or not, I think the relations between India and Japan are those between two unequal powers. For us in India it is of great importance that we understand the Japanese mind, the working of Japanese institutions, the working of the Japanese economy. Perhaps Japan is a superpower with many other preoccupations, and worrying about Indian problems is not that much on the priority agenda. But, I do hope that exchanges of the type that we have had in the last two-and-a-half days would have given some indication that India is on the move. And in the past there may have been valid reasons for Japan not to look intensively beyond the ASEAN region. But, I daresay, as I read the recent developments, the growth potential in some of these countries is, to put it mildly, I think slowing down very substantially. … We, in the past, have been, I think Eurocentric. We have not recognized the potential that Japan offers, but I think in our country there is ample recognition of that – I daresay this seminar has further heightened the perception of what our two countries can gain by working together, by identifying areas of cooperation—and we ought to cash in on this momentum.” See U.S. Bajpai, “India and Japan,” (Delhi: Lancer International, 1988). 2 - 3. 89 Manmohan Singh quoted in U.S. Bajpai, “India and Japan,” (Delhi: Lancer International, 1988). 50. 90 U.S. Bajpai, “India and Japan,” (Delhi: Lancer International, 1988). 49. 91 Rozman et al., Japanese Strategic Thought Towards Asia, 58.

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Tsuyoshi Hasegawa notes that Japan, given its perception as an economic juggernaut in the late-1980s and its strong alliance with the post-Cold War hegemon, could have “[fashioned] a foreign policy that would accurately assess the new reality of international relations and raise Japan’s role.”92 Many in the early 1990s claimed to foresee a strategic link arising between China and Japan in light of the growing economic interdependence between the two nations; Japan was China’s top trading partner, and China was just behind the United States in terms of Japanese trade.93 Japanese proponents of the Yoshida Doctrine believed well into the 1990s that economic interdependence would help normalize relations with China, and that China would be a willing participant in an Asian order led by Japan, but these assumptions proved false. Matters were further complicated in 1995-96 “when China tested nuclear weapons at its Lop Nor site over Japanese objections and then bracketed Taiwan with missiles to punish Taiwan’s president Lee Teng Hui for moving toward independence.” 94 It was this deterioration in Sino-Japanese relations that urged the Japanese right in the Liberal Democratic Party (LDP) to search for solidarity with “conservative, anti-Chinese Indian political figures such as Samata Party defense minister George Fernandes.” 95 However, such tenuous links between the nations were hardly the basis for any meaningful strategic cooperation; all they represented was an alignment of mutual interests between smaller domestic contingents in each nation against the perceived threat of a common rival. In the wake of The Gulf War and the fall of the Soviet Union, India was recovering from a period of economic crisis. New Delhi was driven to search for new avenues for trade and investment, but none were to be found in its immediate neighborhood.96 In response, Indian Prime

92 Rozman et al. Japanese Strategic Thought Towards Asia, 58. 93 Michael Green, “Japan, India, and the Strategic Triangle with China," in Asia Responds to its Rising Powers: China and India, ed. Ashley J. Tellis et al. (Seattle: The National Bureau of Asian Research, 2011), 133. 94 Green, “Japan, India, and the Strategic Triangle with China," 134. 95 Green, “Japan, India, and the Strategic Triangle with China," 134. Fernandes went on to serve as Defense Minister of India under Atal Bihari Vajpayee in the early 2000s. 96 K.V. Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," Observer Research Foundation Occasional Paper #15, August 2010, 6.

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Minister P.V. Narasimha Rao initiated the ‘Look East’ policy, which came to define a new Indian strategic vision that acknowledged “East Asia as a major growth centre.” 97 The ‘Look East’ policy reaffirmed India’s economic liberalization in the late-1980s by demonstrating a willingness to develop close economic and commercial ties within the region; the policy additionally demonstrated a latent interest in strategic and military ties with nations alarmed by China’s growing regional influence. To this end, in June 1992, PM Rao visited his Japanese counterpart Kiichi Miyazawa and together they affirmed that the two nations “must cooperate in restructuring international relations in a manner that permits global and regional issues to be tackled effectively and in a more democratic international environment.”98 Although this high-level exchange contained promising rhetoric, it did not result in concrete steps towards deepening the Indo-Japanese bilateral engagement beyond economic matters. Possible reasons that the relationship did not flourish at this point into the strategic partnership that it currently boasts include a lack of serious Japanese engagement with India, and an Indian failure to commit to the vision of its ‘Look East’ policy given domestic concerns arising from its financial crisis and subsequent liberalization. Scholars have speculated that until New Delhi’s unilateral nuclear tests (Pokhran-II) in 1998, Japan saw little reason to take India seriously on a political and strategic level.99 The most notable bilateral shift, and the lowest historical point for relations between the two countries since the inception of their formal relationship, came following India’s nuclear tests in May 1998. This resulted in Tokyo’s decision to suspend all ODA to India (as part of coordinated economic sanctions against India with the United States), and caused a widespread “reluctance of the Japanese business houses to invest in India.”100 K.V. Kesavan writes:

97Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," 6. 98 The Hindu ( Chennai ) 24 June 1990 qtd. in Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," 7. 99 PG Rajamohan et al., "Changing Paradigm of Indo-Japan Relations: Opportunities and Challenges," 15. 100Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," Observer Research Foundation Occasional Paper #15, August 2010, 7.

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This was an unfortunate phase in the post-cold War bilateral partnership. Many in India and Japan felt at that time that the measures taken by the Japanese Government under Ryutaro Hashimoto were too harsh. Japan was not content with just suspending economic aid; it almost spearheaded a campaign against India at several international fora, including the G-8 Summit held in Birmingham in May 1998, the Conference on Disarmament, Geneva (June 1998), the UN Security Council (June 1998) and the ASEAN Regional Forum (July 1998).101 The sanctions did not faze India. Indian Foreign Secretary Lalit Mansingh emphasized prior to Prime Minister Mori’s visit in 2000 “that India would not appeal for a lifting of sanctions, and publicly it did not.”102 He claimed that India “coped with the sanctions very well and … established the point that sanctions are counter-productive and [India] won’t be intimated by them.”103 Prime Minister Mori would later come to India in 2000 with the goal of achieving reconciliation with India on its signing of the Comprehensive Test Ban Treaty (CTBT), and restoring relations after this relatively serious dip.

V. A DETAILED YEAR-BY-YEAR CHRONOLOGY OF INDIA AND JAPAN IN THE 21ST CENTURY

The following section catalogues, in detail, the growth and evolution of the bilateral partnership between India and Japan in the 21st Century. The turn of the century marks a remarkably logical starting point for such a detailed chronology. It was in August of 2000 that Japanese Prime Minister Yoshiro Mori visited India with a promising vision of a future containing greater cooperation between the two countries. The concept of a strategic partnership between India and Japan was unimaginable in the 1998 – 2000 era when relations sat at an all-time low as Japan continued to suspend its ODA. A mere eight years after the

101 Kesavan, "Japan's Security Policy in the Asia-Pacific during the post-Cold War Period," 7. 102 Satu P. Limaye, "India-East Asia Relations: India's Latest Asian Incarnation," Comparative Connections, Vol. 2, No. 3, India-East Asia Relations, (October 2000): 121 - 138. 103 Mansingh quoted in Satu P. Limaye, "India-East Asia Relations: India's Latest Asian Incarnation," Comparative Connections, Vol. 2, No. 3, India-East Asia Relations, (October 2000), 126.

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Indian nuclear tests, the two nations would sign a Strategic and Global Partnership (SGP) that would provide the normative backdrop for their engagement ever since. Thematically, it is best to think of the 2000 – 2012 era in Indo-Japanese relations as pre-SGP and post-SGP. The pre- SGP period was a time when the economic engagement between the two countries slowly grew, but high-level dialogues inevitably reverted to the uncomfortable questions of India’s acceptance of nuclear non- proliferation, and ratification of the CTBT. While these issues certainly persist in the post-SGP period, the overall strategic engagement between the two countries has been more pragmatic, and intransigent issues have been less prominent (at least openly). Starting in 2000, the leaders of India and Japan begin engaging more seriously in their diplomacy. Prime Minister Yoshiro Mori of Japan met Prime Minister Atal Bihari Vajpayee in the Japan-India Summit Meeting on August 23, 2000. Both leaders expressed hope that the new millennium would bring an age of strengthened cooperation, with Vajpayee further noting that “he hoped that the relations between the two nations, which offer great possibilities for both parties, would be further strengthened, not just bilaterally but also by playing a role together regionally and internationally.”104 This was the year that the two nations declared a “global partnership.” The primary topics of discussion at this summit were 1) nuclear non-proliferation and India’s possible signing of the Comprehensive Test-Ban Treaty (CTBT), 2) United Nations Security Council reform, 3) Pakistan, and 4) the potential for a strong South Asian Association for Regional Cooperation (SAARC).105 In fact, Mori expressed continued interest in the expansion of SAARC and proposed helping through the SAARC-Japan Special Fund.106 This Prime Ministerial summit was the primary strategic exchange between both nations that year. Mori’s visit was truly a watershed event. The Japanese Ambassador to India during Mori’s visit, Hiroshi Hirabayashi, notes that

104 “Japan-India Summit Meeting (Summary),” Ministry of Foreign Affairs of Japan, August 23, 2000, http://www.mofa.go.jp/region/asia-paci/pmv0008/india_s.html 105 “Japan-India Summit Meeting (Summary).” 106 Lalima Varma, "Japan-India: Moving Towards a Global and Strategic Partnership," Dialogue, Vol. 8, No. 3, (January-March 2007), http://www.asthabharati.org/Dia_Jan%2007/Lali.htm.

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Japan was taken aback by India’s nuclear tests in 1998. In an interview with the author, Hirabayashi mentioned that he personally urged Mori, a personal friend of his, to reconsider India’s importance for Japan. In some ways, Japan was forced to make a strategic choice in 2000: either it would continue to alienate India through condemnation, refuse to engage it serious simply out of strategic disinterest, or open the door to scope out possibilities for an important partner in the Indian Ocean. Mori’s visit indicated that Japan chose the latter option. The nuclear tests caught Japanese attention and forced a strategic decision by Japan that resulted in the modern trajectory in bilateral relations. While Mori’s visit was the major event in 2000, the Japanese Minister of Foreign Affairs Yohei Kono, and the Indian Minister of Defense George Fernandes met in June, the Foreign Ministers met in July, and Japan extended emergency assistance to India for flood relief in August.107 The emergency assistance came after the Government of Japan had announced a suspension of Yen loans and grant aid to India on May 13, 1998 following Indian nuclear tests. The Ministerial-level exchange in July saw an acknowledgement of “differences of opinion over the last one or two years.”108 Foreign Minister Kono stressed that India must “clarify its thinking on the Comprehensive Test Ban Treaty.”109 The nuclear tests revitalized the bilateral relationship and, as Satu P. Limaye notes, relations between the two countries had “never been so multifaceted, active, and future-oriented as they have been since India conducted nuclear tests.”110 The tests allowed India to behave stubbornly which in turn caused the Japanese to take the relationship more seriously; India did not compromise on Mori’s CTBT offer for renewed ODA, nor did it ask for relief on sanctions. This further cemented India’s position as a serious Asian power that Japan needed to treat appropriately. No longer would a shallow bilateral relationship along economic lines suffice. Nonetheless, the advances in 2000 represented an accurate image of the

107 “Emergency Assistance to India for Flood Disaster,” Ministry of Foreign Affairs of Japan, August 18, 2000, http://www.mofa.go.jp/announce/announce/2000/8/818-2.html 108 “Summary of the Japan-India Foreign Ministers' Meeting,” Ministry of Foreign Affairs of Japan, July 28, 2000, http://www.mofa.go.jp/region/asia-paci/india/relation/meet0007.html. 109 “Summary of the Japan-India Foreign Ministers' Meeting,” 110 Satu P. Limaye, "India-East Asia Relations: India's Latest Asian Incarnation," Comparative Connections, Vol. 2, No. 3, India-East Asia Relations, (October 2000): 121 - 138.

Asia’s Democratic Bulwark trajectory that Indo-Japanese relations would follow in the first decade of the 21st century. Mori’s call for a “Global Partnership between India and Japan in the 21st Century” did not fall on deaf ears.111 Relations between Japan and India had a shaky start in 2001 after Japan issued a statement urging Indian restraint following the test of a nuclear-warhead capable missile on January 17, 2001. Prime Minister Atal Bihari Vajpayee paid multiple visits to Tokyo in 2001, once in February and another in December. The later visit resulted in an important Japan-India Joint Declaration.112 In this declaration, the two leaders affirmed each nation’s normative commitments to “the ideas of democracy and market economy, the spirit of tolerance, receptivity to diversity and the wisdom to benefit from the distinctive characteristics of their civilizations and cultures.” 113 This declaration also made the following assertions, each of which had strategic implications for the relationship: “the need for holding regular exchange of views at high levels”, that the Comprehensive Security Dialogue and Military-to Military consultations of 2001 had been successful, that the Japan-India Parliamentary Friendship Association had “continued to deepen mutual understanding between the two countries,” that the Japanese decision to discontinue the Yen Loans ban on October 26, 2001 would ensure cooperation between the two nations, and finally, a commitment to cooperation regarding issues in global security. Additionally, the terrorist attacks suffered by the US on September 11th 2001 spurred Junichiro Koizumi’s government to engage the Self-Defense Forces, for the first time ever, outside of Japan’s immediate geographic neighborhood. Koizumi approved their participation in the US-led coalition in Afghanistan, although in a limited capacity, primarily providing supplies and support.114 Overall, 2001 marked the end to the brief tension that

111 “Japan-India Summit Meeting (Summary),” Ministry of Foreign Affairs of Japan, August 23, 2000, http://www.mofa.go.jp/region/asia-paci/pmv0008/india_s.html 112 “Japan-India Joint Declaration,” Ministry of Foreign Affairs of Japan, December 10, 2001, http://www.mofa.go.jp/region/asia-paci/india/joint0112.html. 113 “Japan-India Joint Declaration.” 114 See Dan Blumenthal, “The Revival of the US-Japanese Alliance,” American Enterprise Institute, February 25, 2005, http://www.aei.org/article/foreign-and-defense-policy/regional/asia/the-revival-of-the-us-japanese- alliance/. 2; and Purnendra Jain, “Japan’s New National Security Networks,” EAI Background Brief No. 430, February 19, 2009, http://www.eai.nus.edu.sg/BB430.pdf.

Ankit Panda had been created between the countries after the Indian nuclear tests in 1998. The Indo-Japanese relationship continued along a similar trajectory in 2002 and 2003. In August 2002, a ministerial-level exchange occurred between Foreign Ministers Yoriko Kawaguchi of Japan and Yashwant Sinha of India in Brunei at the ASEAN Regional Forum.115 Kawaguchi emphasized, in reference to a foreign policy speech by Prime Minister Koizumi, that “close cooperation with India is necessary for the region…[and] for prosperity in East Asia,” noting furthermore that India’s economic development and reform will only accelerate its relevance to Japan and the world. 2002 also marked the 50th anniversary of formal diplomatic relations between the two nations, a point that was repeatedly emphasized in diplomatic rhetoric. By this time, there was little doubt that the Indo-Japanese relationship had recovered from the post-nuclear test slump, although FM Yamaguchi emphasized the CTBT at the ASEAN Regional Forum. The focal points of much of the high-level exchange between the nations were the India-Pakistan situation, disarmament and non-proliferation, and the environment. India hosted the Eighth Conference of the Parties to the UN Framework Convention on Climate Change (COP8), which resulted in praise from Japanese officials.116 Regarding the India-Pakistan situation, Japan issued no recommendations beyond a desire to see the conflict resolved through diplomatic means. This trend continued into 2003—a year that proved to be stagnant in terms of high-level diplomatic advances between the two nations. Japan continued to express hopes that India and Pakistan would resolve their differences diplomatically, and expressed its satisfaction after Pakistan proposed convening the 12th SAARC summit in Islamabad.117 The economic relationship between the two nations had not entirely

115 “Overview of Meeting Between Japanese and Indian Foreign Ministers at the ASEAN Regional Forum,” Ministry of Foreign Affairs of Japan, August 1, 2002, http://www.mofa.go.jp/region/asia- paci/asean/fmv0207/india.html. 116 “Japan-India Summit Meeting (Summary),” Ministry of Foreign Affairs of Japan, September 12, 2003, http://www.mofa.go.jp/region/n-america/us/pfmv0209/india.html. 117 “Statement by the Minister for Foreign Affairs, Ms. Yoriko Kawaguchi, on the Relations between India and Pakistan,” Ministry of Foreign Affairs of Japan, May 7, 2003, http://www.mofa.go.jp/announce/announce/2003/5/0507.html.

Asia’s Democratic Bulwark recovered from the post-1998 shock; FDI inflows from Japan to India in 2003 were a fourth of what they were in 1997. It would not be until 2004 that FDI inflows would begin to boom.118 On June 22, 2004, foreign ministers Kawaguchi and Natwar Singh met in Qingdao, China on the occasion of the Asia Cooperation Dialogue.119 The rhetoric here, from both sides, continued to emphasize the importance of a global partnership “based on a strategic perspective.”120 However, as at prior exchanges, the discussion inevitably ended with FM Kawaguchi reiterating a desire to see India sign on to both the CTBT and the nuclear non-Proliferation Treaty (NPT). FM Singh did emphasize that “bilateral trade had not yet reached a level worthy of its potential and that further strengthening trade relations was desired.”121 This statement was in many ways prescient as 2004 marked the beginning of a massive boom in Japanese FDI inflows that restored the strong economic partnership between the two nations that had existed prior to 1998. Furthermore, FM Singh mentioned India’s continued interested in Japan-China-India trilateral cooperation. 122 While the nuclear and Pakistan issues remained hurdles to strategic advancement, this 2004 exchange was highly predictive of the eventual Strategic and Global Partnership later that year. FM Kawaguchi visited India in August which yielded bilateral results regarding 1) economic relations, 2) cooperation on UN reform, 3) counter-terrorism, 4) disarmament and non- proliferation, and 5) the continuation of high-level strategic dialogue.123 Later in 2004, the two nations established a Joint Study Group for Comprehensive Study (JSG-CS) to strengthen economic relations. At a November summit between Indian FM Singh and FM Kawaguchi’s successor, Nobutaka Machimura, both expressed a desire to “expand

118 “Japan-India Relations: Japan’s Active Engagement in Business Cooperation with India II,” Embassy of Japan in India, April 2007, http://www.in.emb-japan.go.jp/Japan-India- Relations/JapanActiveEngagement2007.html. 119 “Japan-India Relations: Japan’s Active Engagement in Business Cooperation with India II.” 120 “Japan-India Relations: Japan’s Active Engagement in Business Cooperation with India II.” 121 “Japan-India Relations: Japan’s Active Engagement in Business Cooperation with India II.” 122 “Japan-India Relations: Japan’s Active Engagement in Business Cooperation with India II.” 123 “Press Release - Japanese Foreign Minister Kawaguchi's visit to India,” Ministry of Foreign Affairs of Japan, August 12, 2004, http://www.mofa.go.jp/region/asia-paci/india/fmv0408.html

Ankit Panda trade and investment, defense and security as well as maritime traffic security.”124 That same month, PM Koizumi and PM Manmohan Singh met in Vientiane, Laos at the ASEAN summit; at this meeting, both leaders echoed earlier statements made by their foreign ministers, committing to strong normative cooperation. The diplomatic exchanges between India and Japan in 2004 strongly foreshadowed the major developments that were to come over the next five years. In 2005, the first formal round of negotiations between the two countries took place over the terms of the “Convention between the Government of Japan and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.”125 Pursuant to this, the Japan-India JSG met for the first time and comprehensively considered “means to strengthen economic relations between Japan and India.” 126 Most significantly, 2005 was the year that PM Koizumi and PM Singh comprehensively examined the complete gamut of bilateral relations between the two nations, and forged the “Eight-fold Initiative for Strengthening Japan-India Global Partnership.” 127 The Eight-fold initiative included the following bilateral goals128: 1. Enhanced dialogue and exchanges 2. Comprehensive economic engagement 3. Enhanced security dialogue and cooperation 4. Science and technology cooperation 5. Cultural and academic initiatives and strengthening of people-to- people contacts

124 “Japan-India Foreign Ministers' Meeting (Summary),” Ministry of Foreign Affairs of Japan, November 27, 2004, http://www.mofa.go.jp/region/asia-paci/india/meet0411-2.html. 125 “Negotiations to Revise the Convention between the Government of Japan and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,” Ministry of Foreign Affairs of Japan, January 12, 2005, http://www.mofa.go.jp/announce/announce/2005/1/0112.html. 126 “The First Meeting of the Japan-India Joint Study Group,” Ministry of Foreign Affairs of Japan, July 13, 2005, http://www.mofa.go.jp/announce/event/2005/7/0713-4.html. 127 “Eight-fold Initiative for Strengthening Japan-India Global Partnership,” Ministry of Foreign Affairs of Japan, April 29, 2005, http://www.mofa.go.jp/region/asia-paci/india/partner0504.html#eight. 128 M. Rama Rao, "India, Japan identify eight–fold initiative for strategic partnership, resolve to launch a gas and oil cooperation dialogue," Asian Tribune, April 30, 2005, accessed October 20, 2011, http://www.asiantribune.com/news/2005/04/30/india-japan-identify-eight%E2%80%93fold-initiative- strategic-partnership-resolve-launch-gas-.

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6. Cooperation in ushering a new Asian era 7. Cooperation in UN and other international organizations 8. Cooperation in responding to international challenges Additionally, Koizumi’s visit “set in motion a process by which the Prime Ministers of the two countries would meet annually in either of the countries.”129 This exchange in 2005 demonstrated awareness on both sides that the bilateral relationship was largely undercapitalized, and that there were synergies waiting to be discovered with greater bilateral strategic cooperation. In January 2006, Japanese FM Taro Aso visited India for bilateral consultations. While Aso’s visit saw the reiteration of several of the goals previously put forward in 2005, it also resulted in the possibility of a comprehensive economic partnership agreement (CEPA) between the two nations; the CEPA proposal emerged from “the ongoing work of the India-Japan Joint Study Group, which [was] expected to submit its report by June 2006.” 130 The momentum gained from the Koizumi-Singh Eight-fold Initiative and Aso’s visit was strengthened further by the visit of Dr. Kiyohiko Toyama, Japanese Vice-Minister for Foreign Affairs, to India in March, and the visit of the Indian Minister of Defense, Pranab Mukherjee, to Japan in May.131 The Japanese Executive Committee for the Japan-India Friendship and Exchange Year held its inaugural meeting in June; this meeting brought together significant Japanese businessmen and representatives from the Ministry of Foreign Affairs.132 That same month, the Japan-India JSG held its fourth meeting. The JSG considered CEPA possibilities, ODA expansion, investment, and other areas of enhanced economic cooperation. 133 The Japan-India Science and Technology

129 K.V. Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” ORF Occasional Paper, http://www.observerindia.com/cms/export/orfonline/modules/occasionalpaper/attachments/india_japan_1275 545633112.pdf, 12. 130 “Foreign Minister Aso's Visit to India - JOINT PRESS RELEASE,” Ministry of Foreign Affairs of Japan, January 4, 2006, http://www.mofa.go.jp/region/asia-paci/india/joint0601.html. 131 “Foreign Minister Aso's Visit to India - JOINT PRESS RELEASE.” 132 “The First Meeting of Japanese Executive Committee for Japan-India Friendship and Exchange Year,” Ministry of Foreign Affairs of Japan, June 1, 2006, http://www.mofa.go.jp/announce/event/2006/6/0601.html. 133 “The Fourth Meeting of the Japan-India Joint Study Group,” Ministry of Foreign Affairs of Japan, June 5, 2006, http://www.mofa.go.jp/announce/event/2006/6/0605.html.

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Initiative held its 7th meeting in October, and identified several up-and- coming areas of cooperation. The watershed event in Indo-Japanese relations since Prime Minister Mori’s visit in 2000 was the establishment of the “Joint Statement Towards Japan-India Strategic and Global Partnership” (SGP) in December 2006 during Prime Minster Singh’s visit to Tokyo. At its core, the SGP resulted in a joint commitment toward the following ends: 1) annual Prime Ministerial summits between Japan and India, 2) negotiations leading to an Economic Partnership Agreement (EPA), 3) the promotion of a Japan-India Special Economic Partnership Initiative (SEPI) 134 , 4) the establishment of a Business Leaders’ Forum, 5) agreement to use the Japan-India Friendship Year in 2007 to deepen cultural exchange, 6) cooperation at multilateral forums, 7) increasing the frequency of multilateral exchanges with “like-minded countries in the Asia-Pacific region on themes of mutual interest,”135 and 8) progress towards the resolution of the civil nuclear question.136 The specifics of this Joint Statement are central to our understanding of the evolution of the bilateral partnership between the two countries, but fall outside of the scope of this chronology. The subsequent chapters will expand on specific declarations within the statement in the context of specific areas of cooperation. The development of the SGP in 2006 was a significant shift in the nature of Indo-Japanese relations, and was a sign of growing rapprochement between the countries. Perhaps fittingly, former Japanese PM Mori, as an envoy for PM Shinzo Abe, heralded the first major high-level exchange between the two nations in 2007. The purpose of his visit was to inaugurate the “Year of Japan in India”—an important step in realizing the goal of more people-to-people exchanges between the two nations that had been

134 This agreement is primarily intended to provide infrastructure development aid to India from Japan “in order to promote Japanese business investment in India, and human resources development to strengthen India’s manufacturing industry, among other contents,” according to the Japanese Ministry of Foreign Affairs’ website. 135 “Visit to Japan of His Excellency Dr. Manmohan Singh, Prime Minister of India (Summary),” Ministry of Foreign Affairs of Japan, December 15, 2006, http://www.mofa.go.jp/region/asia-paci/india/pmv0612.html. 136 “Visit to Japan of His Excellency Dr. Manmohan Singh, Prime Minister of India (Summary).”

Asia’s Democratic Bulwark emphasized in so many prior summits.137 Foreign Minister Taro Aso had taken an opportunity at the East Asia Summit in January to declare that Japan would strive “to create an ‘Arc of Freedom and Prosperity’ along the outer rim of the Eurasian Continent.”138 In a keynote speech at the Symposium on Japan and India in New Delhi on March 9th 2007, Senior Vice-Minister for Foreign Affairs, Katsuhito Asano, noted: South Asia lies at the center of the “Arc”. In this region, there are a number of countries that are engaged in the path of peace and democracy. I believe ‘good governance’ is a key to realizing national economic development. The experience of Japan and India—two large democracies in Asia—proves this point. Japan and India should closely work together in this area.139 The SGP had encouraged a greater recognition of common ideologies and values in each nation, particularly in terms of their prominence as powerful liberal Asian democracies. Indian FM Pranab Mukherjee visited Japan in March, and engaged in high-level talks with FM Aso and PM Abe. Shortly thereafter, FM Aso represented the Japanese government at the SAARC Summit Meeting—the first time a representative from the Japanese government had done so. He issued great support for SAARC, and pledged “Japan attaches great importance to the role of the SAARC in South Asia.”140 Thereafter, in June, the First Japan-India High Level Policy Consultations on Economic Development took place in New Delhi, indicative of a growing effort to fully capitalize on the prior EPA between the two countries. 141 In August, Indian National Security Adviser, M.K. Narayanan, visited Japan for discussions regarding

137 “Mr. Yoshiro Mori, former Prime Minister, to Visit India as Special Envoy of the Prime Minister,” Ministry of Foreign Affairs of Japan, February 9, 2007, http://www.mofa.go.jp/announce/event/2007/2/0209.html. 138 “Keynote Speech by Mr. Katsuhito ASANO, Senior Vice-Minister for Foreign Affairs, Japan, at the Symposium on Japan and India ‘Japan-India Strategic Partnership in an Era of Asian Regional Integration,’” Ministry of Foreign Affairs of Japan, March 9, 2007, http://www.mofa.go.jp/region/asia- paci/india/speech0703.html. 139 “Keynote Speech by Mr. Katsuhito ASANO, Senior Vice-Minister for Foreign Affairs, Japan, at the Symposium on Japan and India ‘Japan-India Strategic Partnership in an Era of Asian Regional Integration.” 140 “Japan’s Support to the SAARC (Priority Areas and Policies),” Ministry of Foreign Affairs of Japan, April 3, 2007, http://www.mofa.go.jp/region/asia-paci/saarc/support0704.pdf. 141 “Japan-India High Level Policy Consultations on Economic Development,” Ministry of Foreign Affairs of Japan, June 14, 2007 http://www.mofa.go.jp/announce/event/2007/6/1174054_850.html.

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“bilateral relations and cooperation in regional and international issues.”142 That same month PM Abe visited New Delhi and left the country having successfully drafted two joint statements: one on “the Roadmap for New Dimensions to the Strategic and Global Partnership between Japan and India,”143 and the other on “the Enhancement of Cooperation on Environmental Protection and Energy Security.”144 By 2008, the rapprochement between the two countries that had begun with PM Mori’s 2000 visit, and strengthened with the SGP, had only grown stronger. What was remarkable was the sheer variety of topics that were included in high-level bilateral talks—a development that demonstrated a commitment to the goals of the SGP. In February, a Japan-India working group met to discuss the establishment of a new Indian Institute of Technology (IIT). Beyond their respective foreign ministries, Japan included its Ministry of Education, Culture, Sports, Science and Technology and several universities in this working group, while India invited its Ministry of Human Resource Development, and incumbent IIT administrators.145 The working group met for a second time in May 2008. Regarding economic matters, the two nations continued their strategic dialogue in May. The topics discussed included progress towards an EPA, Japanese ODA, infrastructure development projects in India, cooperation regarding the new IIT, science and technology cooperation, communications infrastructure, urban development, and various environmental topics. 146 Later that year, in October, PM Singh arrived in Tokyo for the annual Prime Ministerial summit.

142 “Visit to Japan by Mr. M. K. Narayanan, National Security Adviser of India,” Ministry of Foreign Affairs of Japan, August 3, 2007, http://www.mofa.go.jp/announce/event/2007/8/1174801_854.html. 143 “Joint Statement On the Roadmap for New Dimensions to the Strategic and Global Partnership between Japan and India,” Ministry of Foreign Affairs of Japan, August 22, 2007, http://www.mofa.go.jp/region/asia- paci/pmv0708/joint-2.html. 144 “Joint Statement by Japan and the Republic of India on the Enhancement of Cooperation on Environmental Protection and Energy Security,” Ministry of Foreign Affairs of Japan, August 22, 2007, http://www.mofa.go.jp/region/asia-paci/pmv0708/joint-3.html. 145 “The First Japan-India Working Group Meeting on the Cooperation toward Establishment of a New Indian Institute of Technology (IIT) at the Ministry of Foreign Affairs,” Ministry of Foreign Affairs of Japan, February 6, 2008, http://www.mofa.go.jp/announce/event/2008/2/1177604_928.html. 146 “The Second Japan-India Strategic Dialogue on Economic Issues,” Ministry of Foreign Affairs of Japan, July 23, 2008, http://www.mofa.go.jp/announce/event/2008/7/1182058_938.html.

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PM Singh’s visit resulted in a joint statement, officially titled “The Joint Statement on the Advancement of the Strategic and Global Partnership between Japan and India” signed on October 22, 2008.147 Additionally, the two PMs signed the “Joint Declaration on Security Cooperation between Japan and India” (JDSC).148 The joint statement acknowledged and welcomed the expansion of the strategic partnership to include security features, and further expressed general optimism about the trajectory of India-Japan relations. The inclusion of security cooperation in the partnership was expanded upon in the joint declaration, which clarified the extent to which the two nations would cooperate. These elements included: 1) information exchange, 2) bilateral cooperation with extant Asian multilateral frameworks, 3) defense dialogue, 4) coast guard cooperation, 5) transport safety, 6) cooperation against terror and transnational crime, 7) sharing of best practices in peacekeeping and peacebuilding operations, 8) disaster management, and finally 9) disarmament and non-proliferation.149 Concurrently, the Japan-India Business Leaders Forum, co- chaired by Indian billionaire magnate Mukesh Ambani and Fujio Mitarai, CEO of Canon Inc., issued a joint report on prospects for bilateral private sector cooperation. The report outlined prospects for the private sector in each state given the successful conclusion of the potential EPA, and emphasized the role of the Japanese in Indian infrastructure development. Additionally, the report recommended a joint response to the problems of climate change and food supply from the private sector and government in each state. The report concluded that business leaders in Japan and India agreed “further efforts should be made to liberalise trade and investment and to build a global legal and institutional framework for that purpose.”150 In just two years since the original SGP,

147 “Visit to Japan of His Excellency Dr. Manmohan Singh, Prime Minister of India, and Mrs. Gursharan Kaur,” Ministry of Foreign Affairs of Japan, October 22, 2008, http://www.mofa.go.jp/region/asia- paci/india/pmv0810/index.html. 148 http://www.mofa.go.jp/region/asia-paci/india/pmv0810/joint_d.html. 149 “Joint Declaration on Security Cooperation between Japan and India,” Ministry of Foreign Affairs of Japan, October 22, 2008, http://www.mofa.go.jp/region/asia-paci/india/pmv0810/joint_d.html. 150 “The 2nd Japan-India Business Leaders Forum Joint Report,” Ministry of Foreign Affairs of Japan, October 22, 2008http://www.mofa.go.jp/region/asia-paci/india/pmv0810/r_report.html.

Ankit Panda the strategic partnership between India and Japan had definitively diversified the range of topics being addressed at bilateral fora. The first six months of 2009 lacked any major bilateral developments until Indian FM S.M. Krishna’s visit to Japan in June for the third Japan-India Strategic Dialogue at the Foreign Minister’s level. Later that year, in October, H.K. Narayanan, the National Security Advisor of India, visited Japan to exchange views with Japanese FM Katsuya Okada on matters of security cooperation. In December, a Foreign Secretary level dialogue and consultation was held in Tokyo, which involved the exchange of views on regional and global affairs.151 The annual Prime Ministerial summit took place in New Delhi between Japanese PM Hatoyama and Indian PM Singh. Unlike much of the prior bilateral interaction in 2009, the summit produced certain concrete results that demonstrated a commitment by both sides to advance the partnership, particularly regarding security cooperation. Most notably, this summit resulted in “The Action Plan to Advance Security Cooperation based on the Joint Declaration on Security Cooperation between Japan and India,” which expanded upon the prior security declaration and outlined mechanisms for defense cooperation (including annual defense dialogues, military-to-military talks, reciprocal visits, and annual cooperation and exercises, etc.). 152 Among these mechanisms were greater defense dialogue on multiple levels (ministerial level, and naval staff level), bilateral naval exercises, intelligence exchange, and disaster management cooperation. 153 Apart from the joint declaration, the summit also resulted in an agreement that EPA negotiations needed to be accelerated, and the establishment of a joint Project Development Fund (PDF) for the Delhi-Mumbai Industrial

151 “The Japan-India Vice-Minister / Foreign Secretary Level Dialogue and Foreign Office Consultation,” Ministry of Foreign Affairs of Japan, December 3, 2009, http://www.mofa.go.jp/announce/event/2009/12/1197758_1172.html. 152 “Action Plan to advance Security Cooperation based on the Joint Declaration on Security Cooperation between Japan and India,” Ministry of Foreign Affairs of Japan, December 29, 2009 http://www.mofa.go.jp/region/asia-paci/india/pmv0912/action.html. 153 “Action Plan to advance Security Cooperation based on the Joint Declaration on Security Cooperation between Japan and India,” Ministry of Foreign Affairs of Japan, December 29, 2009 http://www.mofa.go.jp/region/asia-paci/india/pmv0912/action.html.

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Corridor (DMIC) project.154 Additionally, in the joint statement released by both Prime Ministers at the conclusion of the summit, the two Prime Ministers reaffirmed cooperation in many multilateral matters such as the G-20, the WTO Doha Round, the Copenhagen Accord, and the United Nations.155 If 2009 had been the year of security cooperation, then 2010 was the year of economic cooperation in Japan-India relations. In April of that year, the 13th round of negotiations on the Japan-India Economic Partnership Agreement (EPA) took place. The major points of contention were “such issues as market access of trade in goods, rules of origin, customs procedures, general rules, trade in services, investment, intellectual property,” among others.156 Five months later, in September, the 14th round of negotiations on the EPA took place and resulted in an “Agreement in Principle” on a Comprehensive EPA (CEPA) between the two countries.157 In addition to the progress made on improving economic ties between the two countries, Japan and India continued to develop their security cooperation. In June 2010, Japan dispatched Yasushi Akashi to both Sri Lanka and India. The visit to Sri Lanka was a gesture of goodwill towards the new government of President Mahinda Rajapaksa after more than 25 years of civil war. After his visit to Sri Lanka, Akashi met Indian officials to exclusively discuss the situation in Sri Lanka.158 The first Japan-India Two-Plus-Two Dialogue, which was one of the goals of the 2009 Prime Ministerial summit, took place in July 2010. The

154 “Visit to India by H.E. Dr. Yukio Hatoyama, Prime Minister of Japan(Outline and Results),” Ministry of Foreign Affairs of Japan, December 29, 2009, http://www.mofa.go.jp/region/asia- paci/india/pmv0912/outline.html. 155 “Joint Statement by Prime Minister Dr. Yukio Hatoyama and Prime Minister Dr. Manmohan Singh - New Stage of Japan-India Strategic and Global Partnership,” Ministry of Foreign Affairs of Japan, 29 December, 2009, http://www.mofa.go.jp/region/asia-paci/india/pmv0912/joint.html. 156 “The 13th Round of Negotiations on the Japan-India Economic Partnership Agreement,” Ministry of Foreign Affairs of Japan, April 6, 2010, http://www.mofa.go.jp/announce/event/2010/4/0406_01.html. 157 “Statement by Mr. Katsuya Okada, Minister for Foreign Affairs of Japan, on Agreement in Principle on the Comprehensive Economic Partnership Agreement between Japan and the Republic of India,” Ministry of Foreign Affairs of Japan, September 9, 2010, http://www.mofa.go.jp/announce/announce/2010/9/0909_03.html. 158 “Dispatch of Mr. Yasushi Akashi, Representative of the Government of Japan, to Sri Lanka and India,” Ministry of Foreign Affairs of Japan, June 14, 2010, http://www.mofa.go.jp/announce/event/2010/6/0614_02.html.

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Two-Plus-Two dialogue involved the Japanese Deputy Minister for Foreign Affairs, and Administrative Vice-Minister of Defense, and the Indian Foreign and Defense Secretaries. 159 This development demonstrated that political and security cooperation in bilateral relations were becoming more intertwined. In August, the fourth annual Japan- India Foreign Ministers’ Strategic Dialogue took place in New Delhi between FM Okada and FM Krishna. The issue of civil nuclear energy was brought up at this dialogue, and FM Okada noted that Japan’s decision to engage in negotiations with India “was one of the most difficult decisions he had made as Minister for Foreign Affairs.”160 The dialogue also included discussion of UN Security Council reform, security threats within Asia (such as Afghanistan, Pakistan, and North Korea), and the conclusion of the CEPA. The Prime Ministerial meeting in October 2010, between PM Naoto Kan and PM Singh, had three main results. First, the two PMs issued the “Joint Statement Vision for Japan-India and the Global Partnership in the Next Decade.” 161 In this statement, the major objectives set out for the coming decade included an agreement on civil nuclear cooperation, greater security and defense cooperation, and global nuclear disarmament. Additionally, the statement included a very optimistic vision of strategic cooperation in global affairs ranging from international economic fora, to terrorism, and to Afghanistan.162 Second, the PMs issued a memorandum on simplifying visa procedures in both Japan and India to increase people-to-people exchanges, and increase the flow of business.163 Finally, the two PMs issued a joint declaration on the conclusion of the CEPA negotiations in which they affirmed their

159 “Japan-India Two-Plus-Two Dialogue and Japan-India Foreign Office Consultations,” Ministry of Foreign Affairs of Japan, July 2, 2010, http://www.mofa.go.jp/announce/announce/2010/7/0702_01.html. 160 “Visit to India by Mr. Katsuya Okada, Minister for Foreign Affairs (Overview),” Ministry of Foreign Affairs of Japan, August 22, 2010, http://www.mofa.go.jp/region/asia-paci/india/fmv1008/overview.html. 161 “Joint Statement Vision for Japan-India Strategic and Global Partnership in the Next Decade,” Ministry of Foreign Affairs of Japan, October 25, 2010, http://www.mofa.go.jp/region/asia- paci/india/pm1010/joint_st.html. 162 “Joint Statement Vision for Japan-India Strategic and Global Partnership in the Next Decade” 163 “MEMORANDUM ON SIMPLIFYING VISA PROCEDURES BETWEEN THE GOVERNMENT OF JAPAN AND THE GOVERNMENT OF THE REPUBLIC OF INDIA,” Ministry of Foreign Affairs of Japan, October 25, 2010, http://www.mofa.go.jp/region/asia- paci/india/pm1010/memorandum_svp.html.

Asia’s Democratic Bulwark commitment to increasing economic cooperation between their two countries.164 In just ten years since PM Mori’s first visit to India, bilateral relations between the two nations had grown at a formidable rate. In February 2011, Japan-India relations experienced a positive boost with the signing of the Comprehensive Economic Partnership Agreement (CEPA). CEPA intends to “promote the liberalization and facilitation of trade and investment between the two countries,”165 and is expected to enter into force in 2012. Soon after the signing of CEPA, bilateral talks between the two nations came to a stop after tragedy befell Japan in the form of the 9.0 magnitude Tohoku earthquake and tsunami that claimed several thousands lives. Japan’s short-term foreign policy objectives were put on hold in favor of collaborating with the global community in the realm of disaster relief. The Fukushima Daiichi nuclear meltdown additionally complicated matters, and essentially froze on-going negotiations on civil nuclear cooperation between India and Japan. India did provide significant relief aid to Japan in the form of aid workers to assist in reconstruction efforts.166 Six months after the disaster, newly elected Japanese PM Yoshihiko Noda met PM Singh in New York during the 66th session of the UN General Assembly on September 23, 2011.167 In October, the fifth annual Foreign Minister’s Strategic Dialogue took place in Tokyo. FM Krishna and FM Koichiro Gemba discussed several issues, ranging from security and maritime cooperation, to climate change, and even China.168 At the very end of the year, PM Noda traveled to the India for the annual Prime Ministerial summit, which resulted in another joint statement. This statement set goals for 2012, which will be the 60th

164 “Joint Declaration between the Leaders of Japan and the Republic of India on the Conclusion of the Comprehensive Economic Partnership Agreement between Japan and the Republic of India,” Ministry of Foreign Affairs of Japan, October 25, 2011 http://www.mofa.go.jp/region/asia- paci/india/pm1010/joint_de.html. 165 “Signing of the Comprehensive Economic Partnership Agreement between Japan and the Republic of India,” Ministry of Foreign Affairs of Japan, February 15, 2011, http://www.mofa.go.jp/announce/announce/2011/2/0215_01.html. 166 "Indian Relief and Rehab team at work in Miyagi (Japan)," Indian Ministry of External Affairs, April 4, 2011, http://meaindia.nic.in/mystart.php?id=100517511. 167 “Japan-India Summit Meeting (Overview),” Ministry of Foreign Affairs of Japan, September 23, 2011, http://www.mofa.go.jp/region/asia-paci/india/meet_pm_1109.html. 168 “Fifth Japan-India Foreign Ministers' Strategic Dialogue (Overview),” Ministry of Foreign Affairs of Japan, October 29, 2011, http://www.mofa.go.jp/region/asia-paci/india/meeting1110_2.html.

Ankit Panda anniversary of India-Japan relations. The PMs welcomed the first bilateral military exercise between the Japanese Maritime Self-Defense Force and the Indian Navy, which is to be held in 2012, and also expressed optimism about infrastructure projects in India such as the Delhi-Mumbai Industrial Corridor (DMIC), and a high-speed railway system based off Japan’s shinkansen (Bullet Train) technology. The evolution of bilateral relations between India and Japan, beginning in 1952 and continuing into the 21st century, has been complex. The series of advancements in bilateral affairs between the nations demonstrate that a convergence has indeed taken place. The wealth of high-level exchanges has caused onlookers to perceive the relationship as constantly warming, but it continues to face obstacles in realizing its potential. Nonetheless, the dynamic of the relationship certainly changed from what it was during the 1990s. The three watershed developments that characterize the growth of this relationship are Mori’s visit in 2000, the SGP in 2006, and the JDSC in 2008. Japan’s approach to India had changed from the moment PM Mori visited in 2000, and in return, India began to see Japan as a potential 21st century target of its Look-East Policy. The SGP in 2006 opened the door for a multifaceted and dynamic engagement. After 2006, Japan and India begin to engage in serious cooperation on security matters and regional leadership. The next chapter explores the drivers of the relationship in the 2000s in greater detail.

Asia’s Democratic Bulwark

CHAPTER 4: ANALYSIS OF THE INDIA-JAPAN STRATEGIC CONVERGENCE IN THE 21st CENTURY

This chapter surveys the empirical evidence in assessing the relative effects of the independent variables outlined in Chapter 2 on the strategic convergence between India and Japan, and how liberal, neoliberal, neorealist, and constructivist theory aid in our understanding of certain developments. The analysis in this chapter progresses through the gamut of relations between India and Japan and seeks to determine the relative explanatory power of each independent variable in effecting strategic convergence between them. This analysis informs the conclusions of this thesis. As indicated in Table 1.1, the methodology employed in this analysis focuses largely on rating the relative effect of different forces in terms of their effect on convergence between Japan and India. There is a large body of evidence that suggests that Japan’s convergence with India is a function of their mutual economic, security, and ideological interests, but obstacles to greater cooperation do remain in each category. The argument is made that the India-Japan partnership is one borne primarily of the economic interests transnational and transgovernmental actors, and the political will of the leadership; the security and normative aspects of the strategic partnership are ancillary byproducts.

I. ANALYSIS OF THE INDIA-JAPAN ECONOMIC CONVERGENCE

As a commercial power, Japan’s economic engagement with India has always existed, but was several undercapitalized prior to 2000. After 2000, economic relations between the two countries have become increasingly multifaceted, and numerous indicators of the size of the relationship indicate a decisively upward trend. However, the Japanese business experience in India has been less than smooth, and significant obstacles do remain. Firstly, the Japanese private sector, in the automobile, consumer electronics, financial services, and other industries, has much to gain from a strong Japan-India relationship. Reasons for this include India’s attractive growing middle-class consumer market, the strength of the Yen vis-à-vis the Rupee, which increases purchasing

Ankit Panda power for Japanese firms, and the sheer size of the Indian market. Secondly, Japan’s economic convergence with India is a function of the risk perceived by Japanese companies by relying on Chinese manufacturing, and particularly, Chinese inputs such as rare-earth metals. One need not look farther than the 2010 Senkaku boat collision incident that resulted in a Chinese embargo on rare-earth exports to Japan (among other consequences) for an example of some of the inherent risk to Japanese productivity in overreliance on China. 169 Third, Japan is interested in development assistance, particularly in terms of infrastructure, which in turn will increase perceptions of India as an attractive destination for Japanese firms and attract Japanese foreign direct investment (FDI). The United Nations Conference on Trade and Development (UNCTAD) found that India became the second fastest- growing destination for FDI in the past decade, after China, and the Japanese government certainly wants to capitalize on this after missed opportunities in the late-1990s and early-2000s.170 The economic analysis is particularly skewed given Japan’s status as a highly developed commercial power and India’s status as a developing nation—particularly in terms of transgovernmental policy. The private sector relationship has somewhat greater parity in terms of trade, but not in terms of investment—which flows overwhelmingly from Japan into India.

i. A snowball effect: Japan’s trade and investment drives Japanese development assistance, which drives further trade and investment.

For indicators of the Japanese economic interest in India, one should turn to Japan’s Official Development Assistance (ODA) volume, private direct investment, number of Japanese firms operating in India, total trade volume, and bilateral treaties and negotiations on economic matters. On the Japanese side, there is a clear delineation between

169 Lackner and McEwen-Fial examine China’s resource advantage and rare-earth policy in this context: http://www.izo.uni-frankfurt.de/Frankfurt_Working_Papers_on_East_Asia/WP_6- 2011_Lackner_and_McEwen_Rare_earth_China.pdf. 170 See “World Investment Prospects Survey 2009 – 2011,” United Nations Conference on Trade and Development, United Nations, New York and Geneva, 2009, http://archive.unctad.org/en/docs/diaeia20098_en.pdf.

Asia’s Democratic Bulwark government and private interests in India. ODA has historically proven to be an important foreign policy mechanism for the Japanese government in propagating its interests worldwide.171 While the Japan Ministry of Foreign Affairs’ revised ODA charter of 1992 states that the purpose of ODA is primarily “to contribute to the peace and development of the international community, and thereby to help ensure Japan's own security and prosperity,” Japan has, in many circumstances, used its ODA volume to punish and reward ODA-recipient states for behavior.172 An example most relevant to this discussion is the post- nuclear test suspension of ODA to India in 1998. Additionally, in the author’s interviews with numerous Japanese officials, including former Ambassador to India Hiroshi Hirabayashi, it was noted that India’s current status as the largest recipient of Japanese ODA and China’s continued decline as a destination of ODA funds is indicative of Japanese strategic and economic interests.173 In 2011, PM Kan’s government was forced to enact ODA cuts on several recipients after the March 11th Tohoku earthquake, yet Kan’s government notably exempted India, the largest recipient of ODA, from these cuts.174 The changes in Japan’s ODA to India since 1998 had not followed a clear logic, but after the signing of the SGP in 2006, both ODA quantities and ODA-funded development projects have increased each year. Prior

171 The OECD Glossary of Statistical Terms defines ODA as: “Flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective, and which are concessional in character with a grant element of at least 25 percent (using a fixed 10 percent rate of discount). By convention, ODA flows comprise contributions of donor government agencies, at all levels, to developing countries (“bilateral ODA”) and to multilateral institutions. ODA receipts comprise disbursements by bilateral donors and multilateral institutions.” See http://stats.oecd.org/glossary/detail.asp?ID=6043. See Japan’s ODA charter at “Japan’s Official Development Assistance Charter (English),” Ministry of Foreign Affairs of Japan, http://www.mofa.go.jp/policy/oda/reform/revision0308.pdf. 172 “Japanese Revised ODA Charter (1992),” Ministry of Foreign Affairs of Japan, http://www.mofa.go.jp/policy/oda/reform/revision0308.pdf. Additionally, the charter mentions the following which may interest economic interdependence theorists: “In addition, as nations deepen their interdependence, Japan, which enjoys the benefits of international trade and is heavily dependent on the outside world for resources, energy and food, will proactively contribute to the stability and development of developing countries through its ODA. This correlates closely with assuring Japan's security and prosperity and promoting the welfare of its people. In particular, it is essential that Japan make efforts to enhance economic partnership and vitalize exchange with other Asian countries with which it has particularly close relations.” 173 Ambassador Hirabayashi served in New Delhi during the Pokhran-II in 1998 and was personally instrumental in Prime Minister Mori’s decision to visit in 2000. 174 Sandeep Dikshit, “Japan Exempts India from ODA Cuts,” The Hindu, October 16, 2011, http://www.thehindu.com/business/Economy/article2543280.ece.

Ankit Panda to India, China, and in certain years, Indonesia had been the top destinations of Japanese ODA.175 Table 4.1: Japanese ODA — Annual Net Disbursement to India and China in USD Fiscal Year China ($M) India ($M) 1998 1158.16 504.95 1999 1225.97 634.02 2000 769.19 368.16 2001 686.13 528.87 2002 828.71 493.64 2003 759.72 325.79 2004 964.69 -82.05 2005 1064.27 71.46 2006 561.08 29.53 2007 435.66 99.98 2008 278.25 599.81 2009 141.96 517.01 Source: Ministry of Foreign Affairs of Japan176

As Table 4.1 demonstrates, 2008 was the first year that Japan’s ODA to India exceeded its ODA to China. The fact that India was now the largest recipient of Japanese ODA and China was relegated to fourth place by 2009 offers insight into Japanese strategy in the region. While the ODA story presents incontrovertible evidence that Japanese interest in India grew significantly from 2000 to 2008, the motivations for the Japanese increase in ODA to India are what truly demonstrate the strategic importance of ODA. In 2004, Japan scholar Purnendra Jain opined in the Asia Times that the fundamental driver behind the shift in Japanese ODA priorities from China to India was due to “criticism of Japan's aid policy as being devoid of a philosophy, the misappropriation of aid money in recipient countries, and political scandals within Japan,” which led to an introspective reform of ODA policies within Japan.177 Other Indian observers speculated during interviews that the change was actually due to China’s lack of need given its strong economic

175 Purnendra Jain, “Japan to Shift Aid Focus from China to India,” Asia Times Online, March 11, 2004, http://www.atimes.com/atimes/Japan/FC11Dh01.html. 176 “Japan’s Official Development Assistance White Paper 2009: Japan’s International Cooperation,” Ministry of Foreign Affairs of Japan, March 2010, 136, http://www.mofa.go.jp/policy/oda/white/2009/pdfs/part3- 2.pdf. 177 Jain, “Japan to Shift Aid Focus from China to India.”

Asia’s Democratic Bulwark performance, and increasing militarization, which contradicts Japanese interests.178 In 1998, the Japanese Ministry of Foreign Affairs did indeed convene a council that issued a report on “ODA Reform for the 21st Century.”179 This report, and a subsequent inquiry from 2001-2002, caused Japanese ODA policy to shift its top priority from China to India for the reasons stated above and, as Jain argues, an “assessment that China no longer requires Japan's financial assistance as much as it once did.”180 However, it is still curious that in a matter of a decade, India went from suffering an ODA suspension as a result of its 1998 nuclear tests to becoming the largest recipient of Japanese ODA. Purnendra Jain’s hypothesis regarding this shift is that “India's recent sustained economic growth, its technical preeminence globally, especially in the information- technology sector, and its diplomatic activism, particularly as a key player in the Group of 20 developing countries, and its push to secure a place as a permanent member of the United National Security Council in recent years” have caused Japan to take notice of its place in the world and make amends for the harsh response in 1998 via a generous aid policy through ODA. 181 Despite the transfer from China to India as a top ODA destination, Japanese economic interactions with China in areas such as trade and direct investment, only continued to rise.182 As early as 2002, China had become the largest source of imports for Japan, and in 2009, it became the top export destination as well.183 Thus, the ODA policy change did not represent a Japanese desire to hedge an over-reliance on Chinese exports and imports—at least prior to the CEPA with India in 2010.

178 This view was stated by three of my Indian sources when asked about the ODA substitution from China to India. 179 “Council on ODA Reforms for the 21st Century Final Report,” Ministry of Foreign Affairs of Japan, January 1998, http://www.mofa.go.jp/policy/oda/reform/report21.html#11. 180 Jain, “Japan to Shift Aid Focus from China to India.” This is doubly true given China’s increasing investment in defensive and offensive militarization. 181 Jain, “Japan to Shift Aid Focus from China to India.” 182 “Chapter 11 Trade, International Balance of Payments, and International Cooperation,” Ministry of Internal Affairs and Communication of Japan, Statistics Bureau, Director General for Policy-Planning (Statistical Standards), http://www.stat.go.jp/english/data/handbook/c11cont.htm. 183 “Chapter 11 Trade, International Balance of Payments, and International Cooperation,” Ministry of Internal Affairs and Communication of Japan, Statistics Bureau, Director General for Policy-Planning (Statistical Standards).

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There is, however, another explanation for the ODA policy change that better addresses the question of how Japanese economic interests in India were propagated via ODA, and in turn strengthened the bilateral partnership. India’s position at the top of Japan’s ODA list was due to two factors: 1) the Japanese private sector’s increasing interaction with India through trade and investment, and 2) a spill-over from the warming of political relations during the Koizumi and Abe administrations. It is here that liberalism helps us in understanding the change in Japanese engagement with India. From 2004 to 2008, Japanese exports to India and direct investment were steadily increasing year-by- year.184 This in itself is evidence of a growing private sector stake in India. In the author’s interviews with various officials at the Japanese Ministry of Foreign Affairs, it was indicated that a significant concern for many Japanese firms investing and trading with India was the overall low level of development and infrastructure within India. These factors made Japanese investors and shareholders uneasy about the risk involved in operating and investing in the Indian market.185

Table 4.2: Japanese Exports and Investment to India from 2004 to 2010 Fiscal Year Exports to India (¥B) FDI in India (¥B) 2004 329 15.0 2005 288 29.8 2006 518 59.7 2007 723 178.2 2008 819 542.9 2009 591 344.4 2010 792 244.1 Source: Ministry of Foreign Affairs of Japan186

184 Ministry of Foreign Affairs of Japan Official Statistics. 185 Multiple sources confirmed this hypothesis, including former Japanese Ambassador to India, Hiroshi Hirabayashi, and Ambassador for Economic Diplomacy, Hideaki Doumichi. 186 “Japan’s Official Development Assistance White Paper 2009: Japan’s International Cooperation,” Ministry of Foreign Affairs of Japan, March 2010, 136, http://www.mofa.go.jp/policy/oda/white/2009/pdfs/part3- 2.pdf.

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Table 4.3: Japanese Exports and Investment to India from 2004 to 2010 Month and Year Number of Japanese Firms Operating in India April 2005 248 January 2006 267 February 2007 362 January 2008 438 October 2008 550 October 2009 627 October 2010 725 October 2011 812 Source: Embassy of Japan in India

Tables 4.2 and 4.3 offer evidence in favor of the argument that Japan’s ODA policy towards India was a reaction to an expanding private sector stake in the Indian market (although the engagement dipped after the global financial crisis in 2008). 2008 represents the apex of the economic relationship: FDI reaches an all-time high of 542.9 billion JPY and Japanese exports to India peak at 819 billion JPY. This was also the year that India topped the Japanese ODA Yen Loan recipient rankings. It is true that FDI and exports dipped in 2009, but given that global FDI flows and investor confidence diminished significantly worldwide after the global financial crisis of 2008, it does not represent a deterioration of economic interests driving strategic convergence. Retroactively tracing the trend in these indicators, and additionally, the number of Japanese firms operating in India, demonstrates that year-to-year, economic engagement by private Japanese agents with India was deepening. It is therefore not surprising that ODA policy shifted in a manner commensurate to the growth of this economic partnership. In fact, the Japanese government’s own overview document on its ODA to India cites “improving [the] investment environment in India, including developing infrastructure” as a goal of its ODA policy.187 In additional corroboration of this argument, several diplomats in India and Japan, including former Indian Ambassador to Japan H.K. Singh, and former Japanese Ambassador to India Hiroshi Hirabayashi, stated that they believed the ODA policy shift was partly driven by the growing stakes of

187 “Overview of Japan’s ODA to India,” Ministry of Foreign Affairs of Japan, June 2011, http://www.mofa.go.jp/policy/oda/region/sw_asia/india_o.pdf.

Ankit Panda the private sector in India. Additionally, the Japanese private sector’s engagement with India was largely synchronous with the broader international FDI inflow trends.188 Japan’s ODA-funded project portfolio in India is diverse, but the highest priority projects for both the Japanese government and private sector are related to infrastructure. The Ministry of Foreign Affairs of Japan cites the following ODA-funded infrastructure-related projects as the “main” ODA projects in India in FY 2010: the Delhi-Mumbai Industrial Corridor/Dedicated Freight Corridor (DMIC/DFC) projects189, the Bangalore Metro, Yamuna Action Plan Project (III)190, Bihar National Highway Improvement Project, Madhya Pradesh Transmission System Modernization Project, Micro, Small and Medium Enterprises Energy Saving Project, Andhra Pradesh Rural High Voltage Distribution System Project, and the New and Renewable Energy Development project. 191 Additionally, Japan’s ODA includes several technical cooperation projects including the Visionary Leaders for Manufacturing (VLFM) program, the Project for Capacity Development for Non-Revenue Water Reduction, and various information technology projects.192 In addition to its benevolent aims, Japan’s ODA policy thus aspires to improve Indian infrastructure, thereby creating a risk-reduced investment environment to keep up with the steady rise in private Japanese direct investment and capital flow into the Indian market.193

188 See K.S. Chalapati Rao and Biswajit Dhar, “India’s FDI Inflows: Trends and Concepts,” ISID, Working Paper No. 2011/01, February 2011, http://isid.org.in/pdf/WP1101.PDF. The authors provide analysis that demonstrates that Japanese investors were not exceptions to the global FDI inflow trends into India. 189 Phase 2 of this project (launched in FY 2010 with JPY 1.616M is concerned with funding the engineering services necessary for the main construction portion of the 552km-long segment forming part of the western corridor of 1,500km total. The entire railroad is envisaged to be 2800km. 190 This project aims to “rehabilitate and improve existing sewerage systems and carry out activities to raise public awareness in the National Capital Territory of Delhi.” See, “Japan’s Main ODA Projects in FY 2010 (including projects ongoing from previous year),” Ministry of Foreign Affairs of Japan. http://www.mofa.go.jp/policy/oda/region/sw_asia/india_o.pdf. 191 “Japan’s Main ODA Projects in FY 2010 (including projects ongoing from previous year),” Ministry of Foreign Affairs of Japan, http://www.mofa.go.jp/policy/oda/region/sw_asia/india_o.pdf. 192 “Japan’s Main ODA Projects in FY 2010 (including projects ongoing from previous year),” Ministry of Foreign Affairs of Japan. 193 It should be noted that the Japanese government does state other goals in its ODA program for India including poverty reduction within the framework of the Millennium Development Goals, and “enhancing human exchanges between Japan and India” with the goal of building stronger bilateral relations. Out of its list of four stated goals, two mention improving bilateral relations with India overtly, and one mentions driving Japanese investment in India.

Asia’s Democratic Bulwark

ii. Beyond ODA: Japanese perceptions of promises and challenges in India.

In absolute terms, despite all advances, Japan and India are nowhere near the top of each others’ list of foreign trade partners. As of 2011, India’s total share of Japanese international trade is a mere 0.9% and Japan’s total share of Indian trade is a paltry 2.2%.194 However, beginning in 2005, the rate of growth has been impressive. Given the previous analysis of Japan’s ODA policy towards India, and the growing economic engagement that preceded it, one must ask what drove Japanese firms and investors to steadily engage India, even prior to the SGP. Fundamentally, observers note that the early 2000s was when Japanese firms took note of a number of attractive traits in India including: 1) impressive growth across multiple industries,195 2) massive domestic consumer demand, 3) projections of a working class population expansion in India, 4) evidence of successful Indian integration with ASEAN states, and 5) a geographically advantageous location for production and export to emerging markets in the Middle East and Africa. 196 This supports a liberal hypothesis of strategic convergence. There is little evidence to support the notion of Japanese manufacturers “hedging” their general overreliance on China prior to the SGP in 2006—especially given that Japan and China only expanded their economic relations in this era. In fact, it is only after the 2010 Senkaku boat collision incident, and a de facto Chinese embargo of rare earth metals, 197 that Japanese manufacturers begin to factor that sort of reasoning into their plans for expansion into India. We will return to this argument in more detail later in this chapter.

194 Embassy of India in Japan, “Japan-India Relations: Economy,” A Brief Provided to the Author by Ambassador Akitaka Saiki on December 21, 2011 in New Delhi, India. 195 This grew more impressive in the latter part of the decade due to the relatively turbulence-free navigation in India of the global financial crisis of 2008. 196 Sanjana Joshi, “India-Japan Relations: It’s Economics All The Way,” Institute of Foreign Policy Studies, February 5, 2011, http://www.caluniv.ac.in/ifps/5th_February_2011.pdf. 197 Although officially denied by the Chinese government, several Japanese manufacturers reported that Chinese exports of rare-earth metals were halted immediately after the 2010 Senkaku boat collision incident. See, Mari Yamaguchi, “China rare earth exports to Japan still halted,” Associated Press, October 21, 2010, http://www.businessweek.com/ap/financialnews/D9J02PF01.htm.

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Despite the long list of perceived advantages, Japanese firms have also had significant obstacles in their economic engagement with India— particularly on the regulatory front. It is thanks to these difficulties that the Japan Chamber of Commerce and Industry (a locally-based advocacy group for Japanese business interests) in India has continuously lobbied policymakers at the Japanese Ministry of Foreign Affairs and the Indian government for increased bilateral cooperation on economic matters.198 The Japanese Chamber of Commerce demonstrates strong evidence of private Japanese interests feeding directly into high-level government policies—supporting liberal and neoliberal explanations of convergence. In particular, the financing of infrastructure projects in India, such as the Delhi-Mumbai Industrial Corridor (DMIC) project, has been a major source of regulatory frustration for Japanese financial institutions (FIs).199 The Japanese have criticized several capital regulations enacted by the Reserve Bank of India (RBI) that impede business for Japanese FIs. Examples relating to the these regulatory problems include: the RBI’s policy under Master Circular No.9/2011-2012 that external commercial borrowings and trade credits are not permitted for end-uses for on-lending or investment in capital markets or acquiring a company, for the real estate sector, for working capital, and for repayment of existing Rupee loans200; the Foreign Exchange Management Act of 1999 that states that foreign banks are permitted to borrow in foreign currency from the head office or branch or correspondent outside India, but only up to 50 percent of the unimpaired Tier 1 capital or 10 million USD201; and under the RBI’s Master Circular on Priority Lending, foreign banks are required to lend more than 32% of their available loan capital to the priority sector (defined as agriculture, small enterprises, micro credit, education loans, housing loans).202 In the context of streamlining private

198 Sanjana Joshi, in an interview with the author. 199 Internal brief provided to the author at the Ministry of Foreign Affairs of Japan in Tokyo, Japan. 200 Reserve Bank of India, Master Circular, No.9/2011-12, “Master Circular on External Commercial Borrowings and Trade Credits,” July 1, 2011, http://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=6501. 201 “Foreign Exchange Management Act,” Reserve Bank of India, http://www.rbi.org.in/scripts/Fema.aspx. 202 Reserve Bank of India, Master Circular, No.2008-09/69, “Master Circular on Lending to the Priority Sector,” July 1, 2008, http://www.cgap.org/gm/document- 1.1.6125/Master%20Circular%20on%20Lending%20to%20the%20Priority%20Sector,%202009.pdf.

Asia’s Democratic Bulwark sector funding and investment in the DMIC project, the Japanese government has strongly pushed for deregulation of the aforementioned restrictions on capital use by foreign FIs in India. 203 Such path dependencies in Japanese transgovernmental engagement with India demonstrate the growing importance of transnational advocacy from the private sector, and are evidence of interdependence. Despite these hurdles, the picture of economic relations between India and Japan demonstrates a clear upward trend with plenty of change from the early 2000s to 2012. As of February 2012, it was reported that on top of the 800-some Japanese firms operating in India (up from 248 in 2005), an additional “200-300” Japanese firms are actively looking to enter the Indian market directly. 204 Regarding this recent surge in investment interest from the Japanese side, Masaki Ida, Chief Director- General, Japan External Trade Organization (JETRO) said “Most of the Japanese companies are now interested in the Indian market, because it is a big country and they see a huge potential for the future. Previously, the investment climate was not as good, but now, the Indian Government is trying to relax some policies.”205 The fact that the Indian government, which has been noted by observers as historically recalcitrant towards foreign economic interests, 206 has begun to accommodate Japanese activity corroborates liberal and neoliberal predictions of strategic convergence. Additionally, in early March 2012, Japan’s Toyota Tsusho Corporation announced that it was ready to begin rare earths production in India by April 2012—a straightforward indicator that Japanese manufacturers are beginning to take India’s potential as a substitute for traditionally Chinese inputs seriously. 207 Furthermore, the economic

203 When asked about obstacles to Japanese economic interests in India, the author’s Japanese interlocutors almost unanimously mentioned such regulatory hurdles. Ambassadors Doumichi and Hirabayashi cited the Government of Japan’s interest in seeing such regulations relaxed. 204 Roudra Bhattacharya, “Japanese Firms See New Sunrise in India,” The Hindu, February 5, 2012, http://www.thehindubusinessline.com/industry-and-economy/article2863378.ece. 205 Bhattacharya, “Japanese Firms See New Sunrise in India.” 206 Suma Athreye and Sandeep Kapur analyze this in some detail. See Suma Athreye, and Sandeep Kapur, “Private Foreign Investment in India’ Pain or Panacea,” The World Economy, Vol. 24, No. 3, March 2001, 399 – 424. 207 Ajoy K. Das, “Japanese company to start rare earths production in India,” Mining Weekly, March 1, 2012, http://www.miningweekly.com/article/japanese-company-to-start-rare-earth-production-in-india-2012-03- 01.

Ankit Panda interest does not flow in a single direction. Analysts have remarked that Japan may soon face a shortage of expertise in its information service industry and Indian information technology (IT) companies that have already set up branches in Japan are poised to remedy this potential malady.208 A particular feature of private Japanese engagement in India has been a marked preference for joint ventures with Indian partners.209 The most famous example of this phenomenon is that of Maruti-Suzuki, which at one time had its ownership stakes diluted between the Indian government, Suzuki Motor Corporation, and Indian private interests.210 Additional ventures of this sort have included the telecommunications venture Tata-Docomo, which became the first to launch 3G cellphone services in India,211 Hero-Honda, a motorcycle manufacturer with 50% marketshare,212 and Ranbaxy—once among India’s largest multinational pharmaceutical firms—which was acquired by Daiichi and continues to operate successfully.213 Imm Jeong-Seong, a business analyst focused on the Indian market for foreign companies, notes that “the consensus among Japanese firms is that a joint venture with an Indian partner is a must for a foreign business, given the difficult of negotiating with an Indian government riddled with bureaucracy and corruption, pioneering a local market, and getting payment from Indian clients.”214 Imm also notes risk aversion in Japanese companies as an impediment to earlier

208 K.V. Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” ORF Occasional Paper, http://www.observerindia.com/cms/export/orfonline/modules/occasionalpaper/attachments/india_japan_1275 545633112.pdf. 34 - 36. 209 See Jeong-Seong Imm, “Why do Japanese companies go for joint ventures in India?” POSRI Chindia Quarterly, Spring 2011, 73 – 77. 210 Maruti-Suzuki market share has hovered at around 50% for the past few years. See “Maruti charts plan to retain its 50% market share,” Maruti-Suzuki, http://www.marutisuzuki.com/Maruti-charts-plan-to-retain-its- 50-market-share.aspx. 211 “The Indian Telecom Services Performance Indicators,” Telecom Regulatory Authority of India, April 29, 2011, http://www.trai.gov.in/WriteReadData/trai/upload/Reports/54/Indicator_Report_Dec-10.pdf. 212 Imm, “Why do Japanese companies go for joint ventures in India?” 74. 213 Khomba Singh, “Ranbaxy: Less aggressive, more Japanese and more healthy after 3 years under Japan's Daiichi,” The Economic Times, December 8, 2011, http://articles.economictimes.indiatimes.com/2011-12- 08/news/30490322_1_atul-sobti-japan-s-daiichi-malvinder-singh. 214 Imm, “Why do Japanese companies go for joint ventures in India?” 73.

Asia’s Democratic Bulwark engagement in the Indian market.215 Referring to Japanese joint venture strategy in South Korea and the US in the 1970s and 1980s, Imm argues that this is an indication of Japanese companies slowly easing into an unknown and risk-laden market. 216 From a liberal perspective, the Japanese government, through strategic convergence with India, can better engage the Indian government on these issues in ways that ensure private parties in each country can find mutual benefit. Economic interests in both Japan and India had broadly defined the crux of their bilateral relations prior to the nuclear tests in 1998, but the post-2000 political engagement between the two countries has led to several paradigmatic shifts in the economic sphere. As far as trade, investments, and Japanese corporate operations in India go, the SGP in 2006, the Joint Declaration of Security Cooperation in 2008, and the slow-but-sure growth of ODA to India reinforced the already-positive perceptions about India as an economic destination. This was reflected, when in 2009, Japanese FDI in India (approximately 5,220 million USD) surpassed its FDI in China (3,650 million USD).217 Additionally, Japan demonstrated a strong stake in India’s economic well-being, and a desire to project its economic clout onto the Asian stage when PM Yoshihiko Noda agreed to a 15 billion USD currency swap in late 2011 to help appreciate the Indian Rupee after a 16% decline in its value after the European sovereign debt crisis. 218 Conventional economic interests certainly have been an immense driver of Japan’s strategic interest in India, and India, in return, has engaged Japan likewise. This analysis presents compelling evidence that liberal and neoliberal drivers have caused strategic convergence between the two countries.

215 “Japanese companies’ preference for joint ventures stems from their tendency to avoid risk. Geert Hofstede’s uncertainty avoidance index for Japan is 92, much higher than Korea’s 85 and the US’ 46. Most Japanese companies chose to form joint ventures when they went to Southeast Asia and the US in the 1970s and 1980s.” See Imm, “Why do Japanese companies go for joint ventures in India?” 74. 216 Imm, “Why do Japanese companies go for joint ventures in India?” 74 – 77. 217 Walter C. Ludwig, “Looking east 2: East Asia and Australasia/Oceania,” Handbook of India’s International Relations (Routledge: London 2011), 148. 218 Aki Ito, and Unni Krishnan, “Japan, India Seal $15 Billion Currency Swap Arrangement to Shore Up Rupee,” Bloomberg, December 28, 2011, http://www.bloomberg.com/news/2011-12-28/japan-india-seal-15- billion-currency-swap-arrangement-to-shore-up-rupee.html.

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iii. India Looks East and the East Looks Back: Effects of the Comprehensive Economic Partnership Agreement (CEPA)

An additional indicator that economic interests have strongly driven the strategic convergence of India and Japan is the watershed Comprehensive Economic Partnership Agreement (CEPA) between the two states that came into effect on August 1, 2011 (after being signed between PM Kan and PM Singh on October 25, 2010). The CEPA is, in itself, an importance example of strategic cooperation, but is also evidence that transgovernmental interests see mutual gains in such an agreement. At the time of this writing, the India-Japan CEPA has been in effect for a mere six months and, therefore, it is difficult to evaluate how effective it has been in bolstering the partnership. In India, most observers view the CEPA as the inevitable consequence of Japan’s economic relationship with China, and some have even argued that its successful conclusion reflects a strong Japanese desire to outperform South Korea in the Indian market. For example, Pravakar Sahoo of the Institute of Economic Growth in India has described the CEPA as a “strategic move given the over dependence of Japan on China for trade in goods and the recent uneasiness in their relation due to [the] arrest of Chinese sailors by Japan.”219 Additionally, he cites a rising cost of production in China and a Japanese desire to “bring Japanese investors and traders on an equal footing with South Koreans, [which has] already signed a comprehensive economic partnership with India,” as reasons for the India-Japan CEPA. 220 On the Indian side, the CEPA promises to make Indian exports more competitive in Japan,221 and facilitate Japanese cooperation with Indian firms in research and development. 222 Japan agreed to immediately eliminate tariffs on 87% of its tariff lines for Indian exports, working towards a 97% elimination by 2021; in return, India eliminated

219 Pravakar Sahoo, “India-Japan CEPA: A strategic move,” East Asia Forum, November 12, 2010, http://www.eastasiaforum.org/2010/11/12/india-japan-cepa-a-strategic-move/. 220 Sahoo, “India-Japan CEPA: A strategic move.” 221 Biswajit Dhar, “All that the India-Japan CEPA Promises,” The Financial Express, September 9, 2011, http://www.financialexpress.com/news/all-that-the-indiajapan-cepa-promises/843865/0. 222 Sahoo, “India-Japan CEPA: A strategic move.”

Asia’s Democratic Bulwark

17.4% of its tariffs on Japanese exports immediately, with an aim of 86% elimination by 2021.223 All in all, the agreement is expected to result in an annual trade volume exceeding 20 billion USD by 2020.224 CEPA is thus likely to result in a substitutionary effect where trade volume between Japan and India increases at a quicker rate than each of their trade volumes with China over the next decade. While Indians applaud Japan’s economic engagement, several interlocutors with this author indicated that Indians continuously voice their frustrations about these Japanese complaints in India by juxtaposing it with South Korea’s relative success in the same market. 225 Both Rajaram Panda at the Institute for Defense Studies and Analysis and Sanjana Joshi, an economic consultant at the Indian Council for International Economic Relations (ICRIER) cite the lengthy and numerous CEPA negotiation rounds with the Japanese as a continued indicator of regulatory incompatibilities proving an impasse to expanded Japanese economic engagement in India.226 The South Korean CEPA was the first for India with an OECD nation and was concluded after four rounds of talks in three years—a far cry from the fourteen rounds over three years227 that India pursued with Japan.228 The South Korean CEPA took effect on January 1, 2010229, while the Japanese CEPA came into effect over a year later in August 2011. It was indicated to this author over the course of multiple interviews in New Delhi that policymakers and businessmen use India’s economic engagement with South Korea as a benchmark for its engagement with Japan. For instance, a mere 10 months after the signing

223 Biswajit Dhar, “All that the India-Japan CEPA Promises.” 224 Sanjana Joshi, “India-Japan Relations: It’s Economics All The Way.” 225 This view was indicated primarily by Rajaram Panda of the Institute of Defence Studies and Analyses (IDSA), and Sanjana Joshi, an economic consultant for the Indian Council for Research on International Economic Relations (ICRIER) during interviews with the author in New Delhi, India on December 19 and 20, 2011. 226 Interviews with the author in New Delhi, India. 227 “Japan-India Economic Partnership,” Ministry of Foreign Affairs of Japan, June 2011, http://www.mofa.go.jp/policy/economy/fta/india.html. 228 Sandip Kumar Mishra, “Negotiating the CEPA with South Korea,” Institute of Peace and Conflict Studies, July 30, 2007, http://www.ipcs.org/article/south-asia/negotiating-the-cepa-with-south-korea- 2341.html. 229 Find the full India-South Korea CEPA here: http://www.aepcindia.com/files/INDIA-KOREA-CEPA- Website.pdf.

Ankit Panda of the CEPA with South Korea, trade volume between the two countries had jumped 70%.230 While the CEPA between India and Japan is likely to increase mutual interdependence between the two nations, and therefore create a more profound strategic connection in a liberal and neoliberal sense,231 it also contains provisions that will strengthen cultural exchange between India and Japan. The CEPA will additionally result in a rapid increase of people-to-people exchanges between the two countries, including an increase in the number of Indian citizens in Japan and vice versa.232

iv. A Struggle Between Pragmatism and Idealism: The Nuclear Hurdle

With the conclusion of the CEPA negotiations, the single most important bilateral economic negotiation process that Japan and India are engaged in (as of this writing) is the civil nuclear cooperation (CNC) agreement. The possibility of even engaging in such relations with India would have been unthinkable in the early 2000s, but given India’s moratorium on nuclear weapons testing,233 its 123 Agreement on civil nuclear cooperation with the United States,234 and cooperative demeanor with Japan on global issues since the SGP, the Democratic Party of Japan (DPJ) government under Naoto Kan agreed to explore the possibility of Japanese technology being used for civil nuclear purposes in India. Current Japanese PM Yoshihiko Noda expressed hopes that the deal would be finalized soon during his December 2011 visit to India.235 The

230 Rajaram Panda, interview with the author in New Delhi, India. 231 Under the neoliberal thought of thinkers like Robert Keohane and Joseph Nye, states seek to maximize absolute gains through a game theoretical approach to bilateral relations in which the possibility of mutual wins is maximized. One way to do this is to create economic institutions, which are mutually profitable. In the India-Japan case, CEPA certainly fulfills this role. 232 Sahoo, “India-Japan CEPA: A strategic move.” 233 “Nuclear Weapons’ Comprehensive Test Ban Treaty,” The United States Navy Department Library, June 2, 2005, http://www.history.navy.mil/library/online/nucweps%20test%20ban.htm. 234 “Joint Statement Between president George W. Bush and Prime Minister Manmohan Singh,” For Immediate Release Office of the Press Secretary of the White House, July 18, 2005, http://georgewbush- whitehouse.archives.gov/news/releases/2005/07/20050718-6.html. 235 “Visit to India by Prime Minister Yoshihiko Noda and Mrs. Noda (Summary and Assessment),” Ministry of Foreign Affairs of Japan, December 29, 2011, http://www.mofa.go.jp/region/asia- paci/india/pmv1112/summary.html.

Asia’s Democratic Bulwark successful conclusion of a civil nuclear cooperation deal with Japan would allow Japanese suppliers, such as GE-Hitachi and Toshiba- Westinghouse, to legally enter the Indian market for nuclear reactors. Estimates of the economic activity that would be generated following such a deal range from 40 billion USB to 250 billion USD.236 Normatively, the governments of India and Japan could not be farther apart on the ideological spectrum regarding nuclear weapons. India has famously refused to sign the Nuclear Non-Proliferation Treaty (NPT)—a treaty that the Japanese view as sacrosanct to global peace. Additionally, a cornerstone of Japan’s nuclear policy is are its Three Non- Nuclear Principles, which are non-possession, non-production, and non- introduction of nuclear weapons.237 Current Japanese regulations allow exports of nuclear technology “only to states that unlike India are either a party to the NPT or allow the International Atomic Energy Agency to safeguard all its nuclear facilities.” 238 Furthermore, the societal implications of nuclear technology are received very differently in each country: Japan being the only nation to have witnessed the brutality of nuclear weapons first-hand, and India relying on its second-strike capability to deter an increasingly unstable Pakistan. Even though the CNC negotiations focus on uses of Japanese-owned nuclear technology for peaceful development and energy purposes, both sides have treaded carefully during negotiations. Additionally, the tragedy at the Fukushima Daiichi reactor following the events of March 11, 2011, jarred Japanese thinking about nuclear technology and safety. When interviewed, Japanese and Indian diplomats alike that CNC negotiations had effectively been stalled post-Fukushima.239 Given my conversations with Japanese officials on the matter, it was clear that Japan did not decide to engage in these negotiations with

236 During interviews with negotiators on both the Indian and Japanese side, many estimates of the economic benefits were presented. It is clear that the economic boon to India will be massive. 237 Takenori Horimoto, “The Japan-India Nuclear Agreement: Enhancing Bilateral Relations?” Asia Pacific Bulletin, No. 107, April 15, 2011. http://www.eastwestcenter.org/fileadmin/stored/pdfs/apb107.pdf 238 Harsh V. Pant, “Why and India-Japan nuclear deal is essential,” Rediff News, August 27, 2010, http://www.rediff.com/news/column/why-an-india-japan-nuclear-deal-is-essential/20100827.htm. 239 One Japanese diplomat made the point that Japanese FM Koichiro Gemba is a native of Fukushima prefecture in Japan; after the crisis at Fukushima Daiichi, he has personally become a skeptic of safe nuclear energy.

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India enthusiastically—if this were the case, the negotiations might have concluded many months ago. Several factors led the Japanese to entertain the possibility of a CNC deal with India just 12 years after sanctioning the country for its nuclear tests. Firstly, given the alignment of Japanese and US foreign policy in Asia, the 2005 US-India deal assuaged concerns about India’s actual proliferation record and reliability as a recipient of nuclear technology. The fact that Britain, Russia, and France had also signed similar agreements with India also helped. 240 Secondly, the Nuclear Suppliers Group (NSG) waiver for the US-India deal allowed for a perambulatory debate in Japan on India’s proliferation risk.241 On the strategic front, the rhetoric shared between both sides after the SGP in 2006, and especially the Declaration on Security Cooperation in 2008, made negotiations more likely. Third, the accession of a new DPJ government with promises of a more independent foreign policy allowed for this window of opportunity for India. Finally, there is significant domestic pressure by Japanese nuclear suppliers for the conclusion of a CNC agreement with India, particularly because India’s CNC agreements with French and American suppliers require Japanese technology for realization.242 For example, Toshiba is a 77% stakeholder in Westinghouse Electric Company—a major supplier of nuclear technology.243 General Electric-Hitachi additionally is a joint Japanese- American venture in the nuclear power plant industry.244 GE-Hitachi and Toshiba-Westinghouse have been major supporters of a CNC deal and have lobbied the Japanese bureaucracy to continue negotiations with India. One further motivator for the Japanese have been the plans for

240 According to Harsh V. Pant, India has also signed agreements with Kazakhstan, Namibia, Angola, and Canada. See, Pant, “Why and India-Japan nuclear deal is essential.” 241 “The Nuclear Suppliers Group approved the US-India nuclear pact in 2008 in which Japan went with the consensus that India's nuclear record warrants its support for the deal. There has been a gradual evolution in the Japanese approach towards the Indian nuclear capability. It refused to view the US-India nuclear pact as a danger to the global non-proliferation framework and was not an obstacle in the decision of the NSG to amend its guidelines enabling India to trade in nuclear technology and fuel.” writes Harsh V. Pant; see, Harsh V. Pant, “Why and India-Japan nuclear deal is essential,” Rediff News, August 27, 2010, http://www.rediff.com/news/column/why-an-india-japan-nuclear-deal-is-essential/20100827.htm. 242 Pant, “Why and India-Japan nuclear deal is essential.” 243 Kentaro Hamada, “Toshiba in talks over Westinghouse stake: source,” ABS-CBNnews.com, September 6, 2011, http://www.abs-cbnnews.com/business/tech-biz/09/06/11/toshiba-talks-over-westinghouse-stake- source. 244 “About Us,” GE-Hitachi Nuclear Energy Ltd., http://www.hitachi-hgne.co.jp/en/about/index.html.

Asia’s Democratic Bulwark reduced greenhouse gas emissions in India which would require it to produce 20,000 gigawatts of nuclear-generated energy by 2020. 245 Without Japanese approval on CNC, several vendors will be unable to allow India to sufficiently substitute its energy needs to nuclear sources by the given date. The controversial nature of these negotiations has stirred a great debate in both India and Japan. Criticism of the negotiations has been especially strong in Japan, which has a very strong non-proliferation lobby. The Citizens Nuclear Information Center (CNIC), a Tokyo- based non-proliferation advocacy NGO, issued a statement: If Japan concludes a nuclear cooperation agreement with India on the grounds that other countries – including the United States, Russia, and France – have done so, or because it is in Japan’s commercial interest to do so, it will become impossible to prevent nuclear proliferation. We will be doomed to repeat the tragedy of Hiroshima and Nagasaki. … It is impossible to completely separate military and civilian workers, education, technology, and equipment within a single country.246 The CNIC views Japan’s decision to negotiate a CNC agreement with India as a betrayal of its values.247 This is a significant position because it demonstrates one of few areas in where domestic dissent exists in regards to relations between India and Japan. Diplomats and scholars in India, including former Indian Ambassador to Japan H.K. Singh, and Japan scholar K.V. Kesavan, have claimed that India-Japan relations are unique in that domestic forces in each country are in favor of closer relations— the CNC agreement is the exception. 248 In an effort to preserve its conventional ideological stance on India’s nuclear weapons, FM Katsuya Okada has stated that Japan would cease any cooperation with India were

245 245 Takenori Horimoto, “The Japan-India Nuclear Agreement: Enhancing Bilateral Relations?” 246 CNIC cited in Masaaki Fukunaga, “Why India-Japan Nuclear Coopreation Must be Stopped,” DiaNuke.org, August 19, 2011, http://www.dianuke.org/why-india-japan-nuclear-cooperation-must-be- stopped-masaaki-fukunaga/. 247 “NGO hits Japan-India Nuclear Negotiations,” PantOrient News, July 6, 2010, http://www.panorientnews.com/en/news.php?k=160. 248 Both Ambassador H.K. Singh and K.V. Kesavan mentioned this during interviews with the author in New Delhi.

Ankit Panda it to break its moratorium on testing, and has also strongly urged India to sign the CTBT.249 Masaaki Fukunaga, a scholar at Gifu University whose work focuses on India, has been an outspoken critic of the CNC negotiations. He is critical of the Japanese government for proceeding with the negotiations with India without any real attempt to engage in public discourse. He writes that after the government decided to enter negotiations “without the people’s consent, … there was no more public discussion in Japan, and no more than the government’s announcement of what had already been decided in closed quarters.” 250 Fukunaga correctly points out that the decision to enter negotiations with India is contrary to Japan’s famous support for the NPT regime. After the crisis at Fukushima Daiichi, PM Kan suspended bilateral talks on CNC with India with the intention of steering Japan away from nuclear power.251 Fukunaga is skeptical that this will permanently damage the negotiations. According to him, “fear of lagging behind in global nuclear competition will most likely force Japanese bureaucrats and diplomats to negotiate a new, favorable nuclear policy.”252 The shock of the Fukushima crisis has certainly slowed down negotiations that were otherwise proceeding smoothly prior to March 11, 2011. In my conversations with diplomats on both sides of the negotiations, the tragedy was cited as a massive inhibitor. However, even after the Fukushima crisis, many in India are optimistic about the prospects of an agreement. Rajaram Panda, a Senior Fellow at the Institute for Defense Studies and Analysis in New Delhi, claims that the mere fact that India and Japan continue to negotiate is reassuring.253 Even after talks were suspended in July 2011, Japan demonstrated greater readiness to continue with negotiations when it dropped seven Indian

249 While the FM has said this, Ambassador Akitaka Saiki indicated to this author that the Japanese recognize India’s pragmatic concerns, and have no expectations that India will sign the CTBT anytime soon. 250 Masaaki Fukunaga, “Why India-Japan Nuclear Coopreation Must be Stopped,” DiaNuke.org, August 19, 2011, http://www.dianuke.org/why-india-japan-nuclear-cooperation-must-be-stopped-masaaki-fukunaga/. 251 P.S. Suryanarayana, “Japan to suspend civil nuclear talks with India: report,” The Hindu, July 17, 2011, http://www.thehindu.com/news/international/article2233662.ece. 252 Masaaki Fukunaga, “Why India-Japan Nuclear Coopreation Must be Stopped,” DiaNuke.org, August 19, 2011, http://www.dianuke.org/why-india-japan-nuclear-cooperation-must-be-stopped-masaaki-fukunaga/. 253 Rajaram Panda, in an interview with the author in New Delhi, India.

Asia’s Democratic Bulwark companies from its restricted foreign end users list, allowing these notable Indian firms to “enter into transactions involving sensitive dual- use equipment, technology, and software.”254 This was another reassuring sign that Japan was ready to approach India on sensitive issues in high technology transfer, including nuclear technology.255 The Democratic Party of Japan, which came to power in 2009 after gaining a majority in the Japanese Diet, is ideologically committed to Japan’s core principles on nuclear disarmament. This has particularly caused some friction in Japan’s cooperation with the United States on certain nuclear issues. For example, the DPJ’s rigid commitments to disarmament principles differ “from U.S. policies that allow for some flexibility, such as the 2005 atomic energy agreement between India and the United States.”256 However, while DPJ party rhetoric on disarmament and non-proliferation has been as vociferous as ever, CNC negotiations with India have continued, demonstrating that economic interests supersede ideological considerations. In line with liberal theory, the pressure being exerted by GE-Hitachi and Toshiba-Westinghouse on the Japanese MOFA has had real effects on policy (as seen with the continued negotiations, even after Fukushima) despite ideological barriers.

v. Economic Ties: A Tale of Interests Leading to Interdependence

Economic engagement between India and Japan has grown spectacularly in the 21st century. Japanese perceptions of great benefits in the Indian market, along with a desire to invest in India’s local industry, drove trade, investment, and economic activity from Japan to India. This

254 “Japan drops seven more Indian companies from restricted list,” The Hindu, September 1, 2011, http://www.thehindu.com/news/national/article2417353.ece. 255 It is notable that in this instance, at least six out of the seven companies that were removed from Japan’s foreign end users list were also removed from the United States Department of Commerce’s entity list earlier in 2011. This demonstrates another instance where the United States’ policy towards India, and Indian entities, conditions Japanese policies. 256 Weston S. Konishi, “The Democratic Party of Japan: Its Foreign Policy Position and Implications for U.S. Interests,” Congressional Research Service, August 12, 2009, http://assets.opencrs.com/rpts/R40758_20090812.pdf.

Ankit Panda in turn caused the Japanese government to take note and reflect India’s growing importance to the Japanese private sector in its ODA policy, which increased Yen Loans to India while decreasing loans to an increasingly self-sufficient China. Neoliberal theory captures this rapprochement in the economic realm—India and Japan perceive ‘mutual wins’ emerging from increasing economic cooperation and have built institutions to this effect. The decision to enact a CEPA demonstrates a desire to extend economic engagement, and recognition that the relationship is undercapitalized. It is also an indicator of strategic convergence emerging out of transnational and transgovernmental economic cooperation. Additionally, while the CNC negotiations represent a significant hurdle for the Japanese government, they are emblematic of deeper interdependence allowing for the consideration of questions that would have been unthinkable prior to 2006. Additionally, constructivist theory would predict that Japan, which values the norms established by the NPT and CTBT nuclear regimes, would not engage in negotiations with India on CNC. However, this has not been the case, demonstrating a triumph of pragmatic interests over ideas and identities, and thus, a triumph of liberalism over what constructivism might predict.

II. ANALYSIS OF THE INDIA-JAPAN SECURITY CONVERGENCE

Security cooperation between Japan and India has grown enormously since 2000, and is based in common interests and identities. In 1998, Japan-India relations were at an all time low, and Japan had strongly condemned India and issued economic sanctions after the Pokhran-II tests; in a matter of a decade, the two had issued a declaration of security cooperation as part of their global strategic partnership. The Japan-India Joint Declaration on Security Cooperation (JDSC) was the first such agreement for India with a developed nation, and only Japan’s second security cooperation declaration (after its declaration with

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Australia).257 It is in this examination of driving factors behind security cooperation between India and Japan in the past decade that neorealist and constructivist hypotheses are relatively more useful. Under neorealist lens, it is no coincidence that security cooperation between India and Japan has been developed at a time that China’s rise has continued to raise questions about the future structural stability of Asia at large.258 The strategic nexus of Indo-Japanese security cooperation is overwhelmingly in the maritime realm: the two nations are maritime powers with stakes in secure sea-lanes of communication (SLOCs). Peter Lehr offers a neorealist analysis of bilateral maritime security cooperation that provides explanatory power for the security convergence between India and Japan even without reference to China’s rise. 259 From a constructivist perspective, the political identities of India and Japan, their democratic values, and their strategic culture all contribute to a natural security alignment. 260 Neoliberalism still offers explanatory power, particularly neoliberal institutionalism, given the proliferation of regional institutions in East Asia since the end of the Cold War, including “APEC (the Asia- Pacific Economic Cooperation forum); the ASEAN Regional Forum (ARF); ASEAN+3; the East Asia Summit (EAS); an expanding network of bilateral military-to-military talks; and an even wider array of quasi- official track-2 security dialogues involving scholars, analysts, and

257 Brahma Chellaney, “India-Japan relationship: Shared values to shared interests,” The Economic times, December 29, 2011, http://articles.economictimes.indiatimes.com/2011-12-29/news/30568722_1_india- japan-japan-and-india-comprehensive-economic-partnership-agreement. 258 This assertion, while it has been vehemently, and understandably, denied overtly by Indian and Japanese officials, is a strategic conjecture that has gained significant following among scholars and observers. Officials have been absolutely insistent that greater security cooperation between these two countries is not influenced in any way, or directed at, the People’s Republic of China. See, Siddharth Varadarajan, “India, Japan say new security ties not directed against China,” The Hindu, October 23, 2008, http://www.hindu.com/2008/10/23/stories/2008102355661200.htm. 259 See Peter Lehr, “The Challenge of Security in the Indian Ocean in the 21st Century: Plus ça change…?,” Heidelberg Papers in South Asian and Comparative Politics, Working Paper No. 13, November 2002, http://archiv.ub.uni-heidelberg.de/volltextserver/volltexte/2003/4124/pdf/hpsacp13.pdf. In undertaking the basic assumptions of neorealism, Lehr claims that if states are unitary rational actors, give priority to improving their security, and are part of an international system marked by anarchy, then they have incentives to cooperate. In a reconciliation of neoliberal and neorealist thought, Lehr incorporates Keohane’s functionalist understanding of state cooperation to argue that “through cooperation, the classical result of the famous prisoner’s dilemma would be broken.” (8) In this sense, cooperation between India and Japan in the maritime front is very likely. 260 Indeed, Indian strategist Brahma Chellaney has written extensively about this ‘natural’ alliance in Asia.

Ankit Panda bureaucrats from countries in the region.”261 Amidst this ever-growing network of regional interdependency and exchange, India and Japan have seen an opportunity to expand their cooperation on bilateral and regional affairs. The analysis in this section is chronological, focusing primarily on developments in India-Japan security cooperation since their joint declaration in 2008. Security cooperation between India and Japan is best conceptualized at three levels: bilateral, regional, and global. Each level contains a set of unique concerns for each country as stakeholders. Bilateral security cooperation has mostly revolved around maritime cooperation, high-level defense talks, and exercises. In the regional realm, the primary area of Indo-Japanese security cooperation is in the area of maritime security—particularly in ensuring the security of vital sea-lanes in the Indo-Pacific. On the global level, India and Japan have similar stakes in managing international peace and security, reforming the United Nations Security Council, thwarting terrorism, and nuclear non- proliferation. While this catalogue of cooperative plans and actions between India and Japan may seem diverse, prior to the SGP in 2006 and the JDSC in 2008, there was virtually no meaningful security cooperation between the two countries. This chapter begins, however, by outlining Japan’s new security outlook post-9/11, which has significant bearing on its decisions to pursue security cooperation with India.

i. India’s place in Japan’s new security outlook

From the Japanese perspective, the convergence with India in the 21st century demonstrates behaviors coherent with the idea that Japan is seeking to establish itself as a “normal” military power.262 As Brahma Chellaney notes, Japan went from “practicing passive, cheque-book

261 Aaron L. Friedberg, “The Future of U.S.-China Relations: Is Conflict Inevitable?” International Security, Vol. 30, No. 2, Fall 2005, 7–45. 262 This argument is described and explored in great detail by Christopher Hughes. See: Christopher W. Hughes, Japan's Security Agenda: Military, Economic, and Evnironmental Dimensions (Boulder, CO: Lynne Rienner Publishers, 2004), 119 – 120; and Christopher W. Hughes, Japan’s Re-emergence as a ‘Normal’ Military Power, Adelphi Paper (New York: Oxford University Press, 2004).

Asia’s Democratic Bulwark diplomacy,” to being “intent on influencing Asia’s power balance.”263 This trend in Japanese security policy became more pronounced after 9/11, particularly under PM Koizumi.264 It is important to contextualize Japan’s growing security interest in India in terms of the important domestic debate surrounding ‘normalizing’ Japanese military power. It was Koizumi that, in a landmark decision, deployed the Maritime Self-Defense Force (MSDF) to deliver supplies as part of Operation Enduring Freedom.265 Additionally, he also called on the Air Self-Defense Force (ASDF) to run transport missions to Diego Garcia and Guam.266 Additionally, in December 2003, Koizumi decided to deploy up to 600 troops from the Ground Self-Defense Force in Samawah, Iraq for peacekeeping and reconstruction processes.267 For a nation, whose foreign policy had become caricatured as overwhelmingly pacifist, these actions were small steps towards a ‘normal’ understanding of the role of the JSDF in Japanese foreign policy. Koizumi had thus set a precedent for Japan conducting military operations outside of its immediate geographic vicinity. As Daniel M. Kilman discusses, another important feature of Koizumi’s security policy decision-making was his willingness to circumvent the Japanese government’s normal foreign policy procedures. 268 For instance, Christopher W. Hughes outlines how the core executive in Japan’s kantei (cabinet) under Koizumi was able to use top-down leadership tactics to expand the JSDF’s role in Japan’s foreign policy.269 Much of Koizumi’s activist security policies were intended to demonstrate Japan’s commitment to its alliance with the United States, but some scholars

263 Brahma Chellaney, “Powering a dynamic, multipolar Asia,” December 30, 2009, http://www.hindu.com/2009/12/30/stories/2009123051481000.htm. 264 Purnendra Jain, “Japan’s New National Security Networks,” EAI Background Brief No. 430, February 19, 2009, http://www.eai.nus.edu.sg/BB430.pdf. 265 Dan Blumenthal, “The Revival of the US-Japanese Alliance,” American Enterprise Institute, February 25, 2005, http://www.aei.org/article/foreign-and-defense-policy/regional/asia/the-revival-of-the-us-japanese- alliance/. 2. 266 Dan Blumenthal, “The Revival of the US-Japanese Alliance,” 3. 267 Nao Shimoyachi, “Koizumi Oks SDF deployment plan,” The Japan Times, December 19, 2003, http://www.japantimes.co.jp/text/nn20031219a2.html. 268 Daniel Kilman, Japan’s security strategy in the post-9/11 world: embracing a new realpolitik (Washington, DC: Center for Strategic International Studies, 2006). 82 – 86. 269 Christopher W. Hughes, Japan’s Re-emergence as a ‘Normal’ Military Power, Adelphi Paper (New York: Oxford University Press, 2004), 62 – 66.

Ankit Panda have argued that the post-9/11 experience helped ease Japan into security cooperation with other countries, particularly Australia and India. 270 Outside of its treaty alliance with the United States, which has driven Japanese security policy since the Second World War, Japan signed security declarations with Australia in March 2007 and India in October 2008.271 Fifty years after its treaty with the United States, Japan formally entered into low-level security cooperation with another country. The security declaration with Australia is, however, less remarkable given its status as a stalwart US ally. The security declaration with India is more surprising, not least because Japan had, just a decade prior, strongly condemned India for its nuclear tests. The two declarations share important similarities and differences; the Indian declaration is certainly based on Japan’s agreement with Australia, but some key differences include a lack of references to the United States, omission of the North Korean problem, and no acknowledgement of common security interests with the United States in the Indian declaration. 272 The Japanese declaration with India is “broad and general,” and does not, unlike the Australian declaration, make any reference to “working together, and with others, to respond to new security challenges and threats, as they arise.”273 The first decade of the 21st century has been transformative for Japanese security policy. Not only did Koizumi’s experience after 9/11 help transform Japanese military activism outside the greater Sea of Japan area, but the subsequent historic transition from LDP to DPJ leadership also ushered in a new era of Japanese strategic thinking about the JSDF’s role in Japan’s power projection.274 Additionally, the Japanese military

270 Purnendra Jain, “Japan’s New National Security Networks,” EAI Background Brief No. 430, February 19, 2009, http://www.eai.nus.edu.sg/BB430.pdf 271 Purnendra Jain, “Japan’s New National Security Networks,” i. 272 Jain, “Japan’s New National Security Networks,” 4. 273 Jain, “Japan’s New National Security Networks,” 4. 274 For examples of these changes, see Yoshihide Soeya, “DPJ’s foreign policy raises hopes … and worries,” East Asia Forum, November 18, 2009, http://www.eastasiaforum.org/2009/11/18/dpjs-foreign-policy-raises- hopes-and-worries/; Tobias Harris, “Japan: The DPJ’s quiet revolution,” East Asia Forum, October 14, 2009, http://www.eastasiaforum.org/2009/10/14/japan-the-dpjs-quiet-revolution/; Hitoshi Tanaka, “Japan under the DPJ,” East Asia Forum, September 24, 2009, http://www.eastasiaforum.org/2009/09/24/japan-under-

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‘normalization’ debate has been healthy and growing, and scholars such as Hughes prognosticate that a multitude of factors, such as changing public opinion, the rise of China, and strong-willed leadership, will propel Japan towards a renewed status as a normal military power in East Asia.275 In 2007, Shinzo Abe upgraded the Defense Agency to a Ministry of Defense for the first time since World War II.276 The DPJ, in the run up to its 2009 electoral victory, concerned many observers with its calls for an “equal US-Japan alliance.”277 The DPJ’s ascent in the Japanese Diet also reinvigorated the national foreign policy debate, with former LDP Prime Minister Aso accusing the DPJ of being a “dangerously radical and untrustworthy” party given their differences with the LDP on Japan’s relationship with China and the US.278 Understanding what drove India and Japan to greater security and defense cooperation over this decade requires an understanding of the major changes in Japan’s understanding of the role of the JSDF in its foreign policy. The process of ‘normalization’ is far from complete, and the time where Japanese leaders can speak openly about overt militarization is still distant. Nonetheless, this change in Japan’s 21st century strategic thought is significant, especially with regard to its convergence with India.

ii. Buds of Security Convergence: Japanese concerns about South Asian stability

Security cooperation between India and Japan was relatively sparse prior to their security declaration in 2008. Nonetheless, after the Pokhran-II tests, the rapprochement process for the two nations resulted in slow but steady developments in the security realm. In 1998, soon after

the-dpj/; Tobias Harris, “Japan: More realism from the DPJ,” East Asia Forum, July 27, 2009, http://www.eastasiaforum.org/2009/07/27/japan-more-realism-from-the-dpj/. 275 Christopher W. Hughes, Japan’s Re-emergence as a ‘Normal’ Military Power, Adelphi Paper (New York: Oxford University Press, 2004), 62 – 66. 276 “Japan now has a Ministry of Defense,” Global Research, January 10, 2007, http://www.globalresearch.ca/index.php?context=va&aid=4397. 277 Tobias Harris, “Japan: More realism from the DPJ,” East Asia Forum, July 27, 2009, http://www.eastasiaforum.org/2009/07/27/japan-more-realism-from-the-dpj/. 278 Harris, “Japan: More realism from the DPJ.”

Ankit Panda the tests, Japan saw fragility in the South Asian region, which was increasingly perceived as the most likely locus of a thermonuclear war at that time. PM Ryutaro Hashimoto’s government attempted to promote dialogue between India and Pakistan repeatedly on the Kashmir issue, urging a peaceful resolution within the framework of the Shimla Agreement.279 There were additionally reports that PM Hashimoto had attempted to urge Pakistan to cease nuclear tests in exchange for Japan, as a future sitting member of the UNSC, bringing the Kashmir issue on the agenda. 280 Hashimoto’s successor, Keizo Obuchi, continued to offer Japanese assistance in mediating the Kashmir issue. The Kargil War in 1999 did nothing to assuage Japanese concerns about South Asian stability. Japan’s approach towards India immediately after the Pokhran-II tests troubled several observers in India.281 At the same time, Japan’s attitude toward security in South Asia was seen as paternalistic and did not interest the Indian government. A brief reprieve came in 2000, prior to PM Mori’s visit, when Indian Defense Minister George Fernandes282 met with Japanese Foreign Minister Yohei Kono for a brief meeting on June 8th where the two discussed security issues, especially issues of nuclear disarmament. Most significantly, Fernandes conceded that India’s signing of the CTBT was a “matter of time.”283 Additionally, Fernandes requested confirmation that regular security dialogues between and India and Japan would be established in order to restore bilateral

279 Sanjana Joshi, “Prospects for Security Cooperation Between India and Japan,” Institute for Defense Studies and Analysis, May 3, 2001, http://www.ciaonet.org/olj/sa/sa_may01jos01.html. 280 Joshi, “Prospects for Security Cooperation Between India and Japan.” 281 See Subhash Kapila, “Japan-India Strategic Cooperation – A Perspective Analysis,” South Asia Analysis Group, June 6, 2000, http://www.southasiaanalysis.org/%5Cpapers2%5Cpaper126.html; and Sanjana Joshi, “Prospects for Security Cooperation Between India and Japan,” Institute for Defense Studies and Analysis, May 3, 2001, http://www.ciaonet.org/olj/sa/sa_may01jos01.html. Both authors recognize Japan’s trend towards a more activist post-Cold War security policy, and see India as a logical destination for Japanese regional cooperation. 282 Curiously, George Fernandes is notable for being a staunch supporter of the notion that China was India’s most significant security threat as early as the mid-1990s. There is no evidence to indicate that Kono or Mori were eager to meet with him for this reason. 283 See “Signing CTBT ‘a matter of time’,” The Hindu, June 7, 2000, http://www.hindu.com/2000/06/08/stories/01080006.htm.

Asia’s Democratic Bulwark relations to their pre-1998 state.284 This dialogue set the tone for much of the bilateral security interactions between Japan and India in the early 2000s. Prime Minister Mori’s visit two months later would further cement this tone and set the relationship on course for the eventual strategic global partnership. Mori’s visit to India is significant in terms of demonstrating the evolution of mutually convergent approaches to regional and global security in Japan and India. Mori’s Indian counterpart, Vajpayee, had particularly interested the Japanese. Vajpayee’s political thought, and that of the Bharatiya Janata Party (BJP), departed from India’s Nehruvian heritage and adopted a “realpolitik alternative.”285 It was Vajpayee that touted unilateral nuclear tests during his electoral campaign.286 When Mori and Vajpayee met in August 2000, the security dialogue alluded to broader cooperation in the future. Mori’s immediate concerns were related to non-proliferation and the CTBT. Bilateral security cooperation was not discussed. On a global level, Mori expressed interest in cooperating with India in reforming the UNSC such that both India and Japan would be awarded permanent seats.287 Additionally, the US, in particular, the Bush Administration, had transformed the conventional American understanding of India as a foil to Pakistan, engaged in perpetual conflict over Kashmir.288 Additionally, Bill Clinton’s visit to India in 2000 also helped the Japanese warm up to India. Harsh V. Pant writes:

284 “Meeting between Minister for Foreign Affairs Yohei Kono and the Indian Minister of Defence (Summary and Evaluation),” Ministry of Foreign Affairs of Japan, June 8, 2000, http://www.mofa.go.jp/region/asia- paci/india/meet0006.html. 285 For a complete analysis of how A.B. Vajpayee and the Bharatiya Janata Party transformed India’s Nehruvian heritage in foreign policy, see Sreeram Chaulia, “BJP, India’s Foreign Policy and the “Realist Alternative”to the Nehruvian Tradition,” International Politics, Vol. 39, June 2002, 215 – 234, http://sreeramchaulia.net/publications/BJP.pdf. 286 Chaulia, “BJP, India’s Foreign Policy and the “Realist Alternative”to the Nehruvian Tradition,” 231. 287 The Japanese Ministry of Foreign Affairs offers a full summary of the meeting. See “Japan-India Summit Meeting (Summary),” Ministry of Foreign Affairs of Japan, August 23, 2000, http://www.mofa.go.jp/region/asia-paci/pmv0008/india_s.html. 288 Former US Secretary of State Condoleeza Rice argued that “there is a strong tendency conceptually [in the United States] to connect India with Pakistan and to think only of Kashmir or the nuclear competition between the two states.” See, Condoleeza Rice, “Promoting the National Interest,” Foreign Affairs 79, No. 1 (January/February) 2000. 56.

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…the Bush administration, from the very beginning, refused to look at India through the prism of nonproliferation and instead viewed it as a natural and strategic ally. The administration went further in its new India policy, declaring that its goal was “to help India become a major world power289 in the 21st century.”290 This US approach to India was certainly noted by the Japanese, as was indicated to this author during multiple interviews with Japanese diplomats and scholars. The US’ recognition of India’s strategic importance resonated with the Japanese. This eased Japanese reservations about India and enabled them to see India as a potential partner in security matters in Asia, and deepened the relationship beyond its economic roots. Despite the advances in overall bilateral relations in 2000, the prospects of expanding security cooperation between Japan and India were limited from 2000 to 2004. The Vajpayee government’s decision to test a nuclear-warhead capable ballistic missile in January 2001 that again drew condemnation from the Japanese, but did not result in consequences similar to those following the nuclear detonations in 1998. However, in almost every instance of high-level bilateral interaction between India and Japan, the Japanese continued to insist on the CTBT and the NPT. Urging India to accede to these frameworks was a serious objective for Japanese diplomacy in South Asia for at least the first half of the decade. Former Japanese Ambassador Hiroshi Hirabayashi noted that during his tenure in New Delhi, Tokyo had a certain hesitation to escalate its security cooperation with India as the nuclear issue was seen as an unsurpassable roadblock.291 Nonetheless, during the Mori-Koizumi era, Japan expanded its dialogue with India. The bilateral Comprehensive Security Dialogues were established in 2001 between Vajpayee and Koizumi. As K.V. Kesavan notes, this had real consequences for military- to-military interactions, including “Japan's participation in the

289 Robert D. Blackwill, “The Quality and Durability of US-India Relationship,” Speech by the US Ambassador to India, India Chamber of Commerce, Calcutta, November 27, 2002. 290 Harsh V. Pant, “India Comes to Terms with a Rising China," in Asia Responds to its Rising Powers: China and India, ed. Ashley J. Tellis et al. (Seattle: The National Bureau of Asian Research, 2011). 121. 291 Ambassador Hirabayashi, in an interview with the author.

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International Fleet Review held in Mumbai in February 2001” and “the visit of a Maritime Self-defense Force (MSDF) squadron to Chennai in May 2001.”292 Vajpayee and Koizumi did nod at the potential for India and Japan as maritime partners: at their December 2001 summit, the two leaders “confirmed the importance of active cooperation between their coast guards and related agencies in such areas as anti-piracy and search and rescue operations.”293 Given the critical nature of secure SLOCs for both nations, and their reliance on oil exports from the Persian Gulf, which have to traverse the Strait of Hormuz (and in Japan’s case, the Strait of Malacca), it was unsurprising that they would focus on maritime issues. This demonstrated a neoliberal desire to reduce the risk of loss through functional cooperation. There is limited evidence that perceptions of a rising threat from an increasingly economically powerful and militarizing China were a consideration in talks between India and Japan in this era. In an op-ed for The Hindu, Indian strategist, C. Raja Mohan, offered a realist analysis of the 2003 meeting between India’s vocally anti-China defense minister under Vajpayee, George Fernandes, and Shigeru Ishiba, 294 Director General of the Japanese Defense Agency (analogous to a defense minister). He claimed that this interaction was symptomatic of “the changing dynamics of the Asian balance of power.”295 This meeting came in the wake of a visit made by Fernandes to Beijing. Mohan argued that the content of Indo-Japanese security cooperation intends to tackle the problems of “China, North Korea and the proliferation of nuclear weapons and missiles.” 296 Mohan also presciently identified the

292 K.V. Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” ORF Occasional Paper, http://www.observerindia.com/cms/export/orfonline/modules/occasionalpaper/attachments/india_japan_1275 545633112.pdf. 293 “Japan-India Joint Declaration,” Ministry of Foreign Affairs of Japan, December 10, 2001, http://www.mofa.go.jp/region/asia-paci/india/joint0112.html. 294 Christopher W. Hughes notes that Ishiba was “an advocate of stronger independent Japanese defense capabilities, enhanced alliance cooperation (with the US), an end to the ban on Japanese weapons exports, the upgrading of the JDA to full ministerial level and the possibility of a preemptive-strike doctrine.” See, Christopher W. Hughes, Japan’s Re-emergence as a ‘Normal’ Military Power, Adelphi Paper (New York: Oxford University Press, 2004), 52. 295 C. Raja Mohan, “After China, Fernandes warms up to Japan,” The Hindu, April 29, 2003, http://www.hindu.com/2003/04/30/stories/2003043003811200.htm. 296 Mohan, “After China, Fernandes warms up to Japan.”

Ankit Panda importance of the security of oil supply from the Strait of Hormuz to both Japan and India—an issue that became even more pronounced in early 2012 with the new U.S. sanctions of Iran. Liberal theory would predict that given Fernandes’ suspicions about China, he might have influenced India’s policy towards Japan at this time. The evidence is thin, but not negligible. Despite Koizumi’s desire to normalize Japanese military power across the board (within the alliance framework), and Vajpayee’s desire to project Indian power after the nuclear tests, the nature of security cooperation between India and Japan was not driven by any clear realist agenda for either country. Additionally, while there were strategic elements to cooperation (for example, Koizumi found it valuable to have a partner such as India in the Indian Ocean given the JSDF’s PKO and US coalition deployments in the region), it should not be overstated in this analysis. The evidence indicates that prior to Koizumi’s interactions with Manmohan Singh, security cooperation between India and Japan was mostly superficial and consisted of exercises in non-conventional maritime threats. While the ‘maritime partners’ rhetoric was present, it was muted. This explanation is consistent with the analysis of the economic partnership between the two countries, which does not begin to pick up until 2004-2005. Indian strategist, and long-time proponent of a strong Japan-India security relationship, Brahma Chellaney argues that just like most successful “economic partnerships in the world … have been built on the bedrock of security collaboration,” so did India and Japan perceive value in increasing their security cooperation with one another. 297 However, the evidence is more indicative of meaningful security collaboration appearing as a consequence of increased economic interdependence. The most convincing IR theory in describing this period of minor security convergence between India and Japan seems to be liberal theory given the influence of individual domestic actors such as Mori, Vajpayee, Fernandes, and Koizumi. Neoliberal considerations are present in that maritime cooperation was envisaged along the lines of protecting mutual

297 Brahma Chellaney, “Asia’s Natural-Born Allies,” Project Syndicate, December 28, 2011, http://www.project-syndicate.org/commentary/asia-s-natural-born-allies.

Asia’s Democratic Bulwark interests (SLOCs, oil from the Strait of Hormuz through Malacca, etc.). Neorealism is hardly present—with the exception of the tenuous evidence regarding Fernandes’ possible external balancing. Certainly Indian desire to increase relative power was a consideration for Vajpayee who openly touted his views about power projection and great power ambition. However, Vajpayee never employed this rhetoric in his bilateral interactions with Mori and Koizumi.

iii. The Manmohan Doctrine and the Eightfold Initiative

There was clear evidence as early as 2000 that were India and Japan to become important collaborators on security issues, they would do so primarily in the maritime realm. The 2004 national elections in India resulted in Manmohan Singh and the Congress Party replacing Vajpayee and the BJP. While Vajpayee was interested more in real power projection and realpolitik, Manmohan Singh walked in the wake of a more Nehruvian liberal understanding of the role of security in India’s foreign policy. The “Manmohan Doctrine” took the Nehruvian view that “ultimately, foreign policy is the outcome of economic policy.”298 As a respected economist, former governor of the RBI, and Finance Minister during India’s market liberalization in the early 1990s, it was unsurprising that Singh would base his foreign policy around India’s economic growth. Koizumi, the Japanese Prime Minister to hold the office for the longest period in the past decade, also was the only Japanese PM to engage India under both Vajpayee and Singh. Given Koizumi’s experience after 9/11, and certainly during Operations Enduring Freedom and Iraqi Freedom, he saw the long-term value of increasing security cooperation with the largest maritime power in the Indian Ocean. The Eightfold Initiative put forth by Koizumi and Singh in 2004 featured security cooperation very prominently. The two “instructed the Maritime Self Defence Force of Japan and the Indian Navy to enhance their cooperation, including through exchange of views, friendship visits

298 C. Uday Bhaskar, “Manmohan Doctrine and India’s External Relations,” Institude for Defense Studies and Analyses, March 16, 2005, http://www.idsa.in/idsastrategiccomments/ManmohanDoctrineandIndiasExternalRelations_CUBhaskar_160 305.

Ankit Panda and other similar activities.”299 The Indian Ocean tsunami in late 2004 also resulted in the Indian, Japanese, and US forces collaborating in search and rescue, and disaster relief missions. 300 These interactions represented practical advances, but hardly demonstrated strategic convergence. However, constructivist theory (and to an extent neorealism) aids our understanding of the Eightfold Initiative: the focus on security issues in this initiative was pursuant to important ideological claims. Koizumi and Singh openly discussed a ‘New Asian Era’ in which Japan and India would “strive to develop closer dialogue and collaboration to secure peace, stability, and prosperity in Asia, promote democracy and development, and explore a new architecture for closer regional cooperation in Asia.”301 This sort of posturing necessarily contradicts China’s ambitions and is evidence of Indo-Japanese security cooperation emerging out of a mutual desire to maintain a status quo understanding of Asia’s structural power arrangements. The bilateral rhetoric certainly permits an understanding of constructivist compatibilities driving realist thinking about Asia’s normative future, but the importance of economic cooperation should not be understated in the Koizumi era. A statement between India and Japan pledging to “secure peace”—without clearly demarcating the means—is compatible with external balancing theory. Nevertheless, actual maritime security cooperation in the Koizumi era is explained neither by neorealist nor neoliberal variables. There is no evidence to suggest that security dilemma perceptions drove the two nations together practically; additionally, economic interdependence was still very limited prior to 2005-2006. Security exchange and cooperation between India and Japan during Koizumi’s tenure was quite ad hoc and lacked the vertical trajectory seen in the maritime realm after the SGP.

299 “Eight-fold Initiative for Strengthening Japan-India Global Partnership,” Ministry of Foreign Affairs of Japan, http://www.mofa.go.jp/region/asia-paci/india/partner0504.html. 300 Rajaram Panda and Victoria Tuke, “India-Japan-US trilateral Dialogue: A Promising Initiative,” IDSA Issue Brief, Institute for Defence Studies and Analyses, November 22, 2011, http://www.idsa.in/system/files/IB_India-Japan-US.pdf, 3. 301 “Eight-fold Initiative for Strengthening Japan-India Global Partnership,” Ministry of Foreign Affairs of Japan, http://www.mofa.go.jp/region/asia-paci/india/partner0504.html.

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iv. The Quadrilateral Initiative and the Confluence of the Two Seas (the Abe-Fukuda-Aso-era)

From 2006 to 2009, Japan’s leadership was in a state of flux. After Koizumi, three Prime Ministers held the position for approximately a year each: Shinzo Abe, Yasuo Fukuda, and Taro Aso (who was also Abe’s foreign minister). However, unlike Koizumi, neither Abe, Fukuda, nor Aso enjoyed the level of public support the Japanese public had afforded to Koizumi, particularly regarding security policy; this had some important implications for these Prime Ministers and their engagement with India.302 Abe, Fukuda, and Aso each brought a different perspective to the table with India. Abe is a notable Japanese Prime Minister for his relatively strong right-wing nationalism which long enamored him with India. In his speeches in India, he would refer to historic 303 and civilizational ties with India, referring even to Japan’s war-era support to Indian freedom fighters such as Subhas Chandra Bose, and Judge Radhabinod Pal’s dissenting opinion at the Tokyo Tribunal.304 Fukuda had a more limited engagement with India, but was particularly challenged in the foreign policy realm by the MSDF’s refueling mission in the Indian Ocean.305 Aso’s engagement with India was largely in the context of the “Arc of Freedom and Prosperity” initiative he had launched while serving as Abe’s FM, which outlined a vision for a new form of Asian multilateralism under “value oriented diplomacy.”306 As a

302 Andrew Lee Oros and Yuki Tatsumi, Global Security Watch – Japan, (Santa Barbara: Library of Congress Cataloguing-in-Publication Data, 2010), 145. 303 Nobusuke Kishi, the first Japanese PM to visit India, was also Shinzo Abe’s grandfather. 304 See Norimitsu Onishi, “Decades After War Trials, Japan Still Honors a Dissenting Judge,” The New York Times, August 31, 2007, http://www.nytimes.com/2007/08/31/world/asia/31memo.html?_r=1; and D. S. Rajan, “Shinzo Abe is an admirer of India,” Rediff News, August 22, 2007, http://www.rediff.com/news/2007/aug/22guest.htm. 305 See Richard Tanter, “Japan adrift in the Indian Ocean,” Asia Times Online, October 2, 2008, http://www.atimes.com/atimes/Japan/JJ02Dh01.html. 306 See “Speech by Mr. Taro Aso, Minister for Foreign Affairs on the Occasion of the Japan Institute of International Affairs Seminar "Arc of Freedom and Prosperity: Japan's Expanding Diplomatic Horizons",” Ministry of Foreign Affairs of Japan, November 30, 2006, http://www.mofa.go.jp/announce/fm/aso/speech0611.html.

Ankit Panda generally hawkish leader, Aso was also known for being particularly skeptical of Chinese militarization.307 Abe, with Aso at his side as FM, made some extraordinary advances with India. Notwithstanding signing the SGP in 2006, Abe was a strong proponent of a values-based quadrilateral initiative among the United States, Japan, India, and Australia to ensure structural stability and peace in Asia.308 This idea generated a great deal of debate in these four countries, and certainly in China, who expressed overt opposition309 to any such initiative, perceiving it as a clear threat to its ambitions in East Asia.310 On August 22, 2007, Abe delivered a speech before the Indian Parliament entitled “Confluence of the Two Seas” in which he noted, “as maritime states, both India and Japan have vital interests in the security of sea lanes. It goes without saying that the sea lanes to which I refer are the shipping routes that are the most critical for the world economy.”311 Abe’s rhetoric was sharply in favor of a values-based security architecture for Asia that would preserve a status quo understanding of the region—what he and Aso dubbed the Arc of Freedom and Prosperity. Abe and Aso, during this post-SGP era, demonstrate a strong burst of normative thinking driving Japan’s foreign policy towards India. Liberalism predicts the strategic convergence occurring under these pro- India leaders, and constructivism predicts their contribution to strategic convergence given their draw towards ‘value-based diplomacy.’ By the middle of this era, the SGP had come into effect and the security relationship reflected this. US President George W. Bush’s visit to India had also resulted in an increased US interest in India. In April 2007, the US, India, and Japan conducted a joint trilateral maritime

307 Aso has said that China was “a neighbour with one billion people equipped with nuclear bombs and has expanded its military outlays by double digits for 17 years in a row, and it is unclear as to what this is being used for. It is beginning to be a considerable threat." See, “Japan alarmed by Chinese ‘threat’,” BBC World News, 22 December, 2005, http://news.bbc.co.uk/2/hi/asia-pacific/4551642.stm 308 K.V. Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” ORF Occasional Paper, 13. 309 Siddharth Varadarajan, “Four-power meeting drew Chinese demarche,” The Hindu, June 14, 2007, http://www.hindu.com/2007/06/14/stories/2007061410501500.htm. 310 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 13. 311 “"Confluence of the Two Seas" - Speech by H.E. Mr. Shinzo Abe, Prime Minister of Japan at the Parliament of the Republic of India,” Ministry of Foreign Affairs of Japan, August 22, 2007, http://www.mofa.go.jp/region/asia-paci/pmv0708/speech-2.html.

Asia’s Democratic Bulwark exercise off the Boso Peninsula.312 In September 2007, India and Japan participated in a major multilateral maritime exercise known as Malabar 2007. The exercise included 25 vessels from the United States, India, Japan, Australia, and Singapore, and took place in the Bay of Bengal. Indian Commodore Sarabjeet Singh Parmar, who coordinated and led the Indian Navy at the Malabar 2007 exercise, indicated to this author that the Malabar exercises were particularly significant because they allowed the Japanese and Indian navies to experience operational collaboration on tackling non-conventional maritime tasks such as piracy, search and rescue, humanitarian assistance, disaster relief, counterterrorism, and coast guard-to-coast guard relations.313 Incidentally, this exercise also included an anti-submarine warfare, maritime interdiction, and air combat exercises as well. 314 A month prior to Malabar 2007, the Shanghai Cooperation Organization (SCO) had held its largest war games yet with approximately 6000 ground troops from China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan, and Uzbekistan.315 To a neorealist observer, the juxtaposition between these two exercises and their participants comes as no accident. By this point, however, economic relations between India and Japan were on the rise, and China was the most important economic partner for both India and Japan. These exercises are the strongest evidence in favor of external balancing behavior by both India and Japan. Although no Indian or Japanese diplomat would overtly acknowledge any hint of a possibility that concerns about China have prompted maritime exercises (especially ones where anti-submarine and surface-to-air combat—not the usual domains for maritime pirates, or other non-state maritime actors—are incorporated), they represent strong evidence of defensive capacity building and cooperation along realist lines.

312 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 13. 313 Commodore S.S. Parmar, in an interview with the author in New Delhi, at the Institute for Defence Studies and Analyses. Commodore Parmar was a commanding officer in the Indian Navy and was present at Malabar 2007. He is currently a Visiting Fellow at IDSA. 314 Commodore S.S. Parmar, in an interview with the author in New Delhi, at the Institute for Defence Studies and Analyses. 315 See “Shanghai Cooperation Organization Holds Biggest War Games Ahead of Leaders Summit,” Voice of America News, August 7, 2007, http://www.voanews.com/english/news/a-13-2007-08-07-voa11- 66721832.html.

Ankit Panda

The United States’ role in urging India and Japan towards closer security cooperation is apparent in 2007. K.V. Kesavan notes that the US-Japan Security Consultative Committee (2+2) resulted in a statement that expressed interest in greater trilateral understanding with India;316 the report read noted that India’s “continued growth is inextricably tied to the prosperity, freedom and the security of the region.”317 Additionally, an independent trilateral dialogue consisting of the Center for Strategic and International Studies in Washington, the Japan Institute of International Affairs in Tokyo, and the Confederation of Indian Industry in New Delhi, “recommended that close trilateral relationships would serve each nation’s interests and the cause of peace and stability in Asia” 318 The Second Richard Armitage Report also made a similar recommendation, noting that trilateral cooperation with India is essential for the US-Japan alliance.319 India’s cooperation with the US post-9/11, the Indo-US 123 Agreement on nuclear cooperation, and the Indo- Japanese SGP reinforced trilateral thinking and increased security linkages between the three states. PM Aso and PM Singh signed the JDSC in 2008, which opened a new era of security cooperation between India and Japan. The JDSC seemed to finally realize the vision that Mori, Koizumi, Vajpayee, and Fernandes had envisioned earlier in the decade. The declaration was significant in that it emphasized bilateral cooperation in regional and global affairs; it called for cooperation within multilateral fora such as the EAS, the Regional Cooperation Agreement on Combating Piracy and Armed Robbery Against Ships in Asia (ReCAAP) and the ARF. The JDSC, as its final clause, called for an action plan—this would find realization a year later under PM Hatoyama and the DPJ. The three years from 2006 to 2009 heralded major developments in the Indo-Japanese partnership. This was the time when the economic engagement between the two nations began to finally boom, and India became the top recipient of Japanese ODA. Abe, Fukuda, and Aso

316 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 14. 317 Full text of the Joint Statement of the US-Japan Security Consultative Committee dated 1 May 2007 is found in, http://state.gov/r/pa/prs/ps/2007/may/84084.htm. 318 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 14. 319 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 14.

Asia’s Democratic Bulwark oversaw major strategic developments. India marked a major strategic victory after receiving de facto approval for its civil nuclear ambitions after its agreement with the United States. The trilateral maritime exercises and Malabar 2007 demonstrate that Abe and Aso’s desire for a values- driven security partnership in East Asia did not fall on deaf ears. While security dilemma perceptions regarding China continued to remain a muted feature of the India-Japan partnership, the growth of security cooperation during this era is perhaps best attributed to constructivist complementarities. The exercises had taken place between India and the United States prior to 1998, but the inclusion of Japan in 2007 was caused by the increased normalization of the MSDF, Abe’s interests in cooperation with India and the US, and the US’ long-term strategy for maritime security in the Indo-Pacific region. It should be noted that with the fall of Aso and the LDP from power, the Japanese have significantly reduced the use of the ‘Arc’ rhetoric, although observers note that it “remains in the thoughts of current Japanese diplomatic strategy.”320

v. 2009 to 2012: A Clearer Security Dilemma?

After the JDSC, and the ascent of the DPJ to the helm in 2009, India and Japan continue to remain strong partners economically and in the security front. As a corollary, their relationships with China have become increasingly strained. Any analysis of burgeoning security cooperation between Asia’s largest democratic powers must acknowledge China’s structural impact. Yukio Hatoyama’s tenure as Prime Minister could likely have resulted in a downgrading of bilateral relations between India and Japan, because the DPJ’s primary foreign policy platforms emphasized “rebalancing relations with Washington and improving ties with China.”321

320 For a complete treatment of this brief episode in Japanese grand strategy, see Yuichi Hosoya, “The ‘Arc of Freedom and Prosperity’ and the Future Asian Order,” Asia-Pacific Review, Vol. 18, No. 1, 15 July 2011, 13 – 24. 321 Victoria Tuke, “India-Japan Ties Blossom,” The Diplomat, January 2, 2012, http://the- diplomat.com/new-leaders-forum/2012/01/02/india-japan-ties-blossom/.

Ankit Panda

Nonetheless, Hatoyama demonstrated enthusiasm 322 in continuing the LDP’s trajectory with India, demonstrating that the Japan’s stakes in India were not a controversy dependent on party lines.323 Kesavan notes that Hatoyama’s visit to India was remarkable because it occurred very early in his tenure as PM324 and at a time when Japan’s foreign policy agenda was transforming.325 Hatoyama’s visit resulted in the Action Plan that had been envisaged by Abe and Aso. The action plan cemented strategic security cooperation in areas such as defense, maritime security, safety of transport, disaster relief, and cooperation at multilateral fora, globally and regionally. The action plan also introduced the 2+2 dialogue mechanism, which Japan also incorporated in its security declaration and action plan with Australia in 2007. Indian strategist Brahma Chellaney notes, “the structure and even large parts of the content of the three security agreements — between Japan and Australia, India and Japan, and India and Australia — are alike.”326 By 2009, given this mutually reinforced troika of bilateral security declarations, information flow on strategic security matters between these three countries had increased. It is this very development that concerned Chinese observers, and drove perceptions of a values-based Indo-Pacific coalition against China. While there was no immediate official-level commentary on the Indo- Japanese declaration, China Radio International, in coordination with the China International Institute of Strategic Studies, broadcast a report (captioned “Japan and India forge military alliance, to attack China both from front and rear”) in which it scrutinized the declaration, and argued that it represented the beginnings of even deeper military cooperation between India and Japan, represented the realization of Abe and Aso’s ‘Arc’ against China, and even de facto realized the quadrilateral

322 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 15. 323 Indeed, K.V. Kesavan, Ambassador Hideaki Doumichi, and Ambassador H.K. Singh indicated during interviews that the India-Japan relationship has been entirely uncontroversial domestically in Japan and India alike. 324 Kesavan also notes that the Japanese media “almost in one voice complimented Hatoyama for his decision to visit India.” 14. 325 Kesavan, “India and Japan Changing Dimensions of Partnership in the post-Cold War Period,” 15. 326 Brahma Chellaney, “Powering a dynamic, multipolar Asia,” December 30, 2009, http://www.hindu.com/2009/12/30/stories/2009123051481000.htm.

Asia’s Democratic Bulwark initiative.327 Similarly, Li Hongmei, a People’s Daily columnist, in an op- ed entitled “India's ‘Look East Policy’ means ‘Look to encircle China’?” strongly criticized the close rapprochement between the two democratic powers, arguing that it would serve only to destabilize Asia in the long run.328 She writes: India is viewed by Japan as an ideal partner to establish the strategic cooperation in security, based on the assumption that both of them are being threatened by China's military assertiveness in East China Sea as well as in the Indian Ocean. On this basis, Japan and India have both placed high expectations upon each other in combining strengths to counterbalance China.

Perceptions certainly matter in international relations, and can drive reality. While India and Japan might insist that their ever-growing security and defense cooperation is not directed against China, their actions suggest otherwise to Chinese observers. This also suggests security convergence was driven to an extent by external balancing behavior in both states. Independently, there is evidence that perceptions of a security dilemma have grown in both Japan and India—both of whom experienced particularly turbulent relations with China in these years, and made strides to bolster both their unilateral defense capabilities and their bilateral cooperation on security matters. From 2007 to 2011, India became the largest arms buyer in the world, accounting for 10% of all purchases—a period when its relationship with China degraded significantly.329 Also in 2007, Japan upgraded its Defense Agency to a Defense Ministry for the first time since World War II. In the latter half of the decade, the notion that China is constructing a ‘string of

327 D.S. Rajan, “Beijing: Suspicions on Japan-India Security Declaration targeting China,” South Asia Analysis Group, November 3, 2008, http://www.southasiaanalysis.org/%5Cpapers30%5Cpaper2912.html. 328 Li Hongmei, “India's ‘Look East Policy’ means ‘Look to encircle China’?,” People’s Daily Online, October 27, 2010, http://english.peopledaily.com.cn/90002/96417/7179404.html. 329 Hari Kumar, “Why has India become the world’s top arms buyer?,” The New York Times, March 21, 2012, http://india.blogs.nytimes.com/2012/03/21/why-has-india-become-the-worlds-top-arms-buyer/.

Ankit Panda pearls’330—a network of strategic bases to expand its sphere of influence— became “a matter of conviction for many Indian strategists331.”332 This perception was corroborated through China’s attempt to block an Indian loan application at the Asian Development Bank,333 its attempt to block the US-India civil nuclear cooperation pact at the NSG, its “obstructionist” posturing regarding terror attacks in India, and its general lack of understanding regarding India’s security interests in the Indian Ocean. 334 Additionally, in late 2011, ahead of PM Yoshihiko Noda’s visit to China, the Japanese coast guard arrested the captain of a Chinese fishing vessel that had entered Japanese territorial waters near Nagasaki and was fishing illegally—a development that echoed the Senkaku collision of 2010 and came in the wake of “large-scale war games in southern Japan that were aimed at fending off a possible attack from the People’s Liberation Army navy.”335 Finally, while India and Japan had conducted several multilateral exercises within the Malabar framework, they had never conducted large-scale bilateral exercises. This changed in November 2011, when Indian Defense Minister A.K. Antony announced that the Indian Navy and the MSDF would conduct joint

330 It should be noted that the concept of a ‘string of pearls’ strategy emerged from a reported drafted by Booz Allen Hamilton, a consulting firm, for the US Department of Defense in 2005. Neither the Chinese government, nor strategists, refer to any Chinese strategy to this effect. James R. Holmes notes that the term was popularized by Bill Gertz, a reporter for the Washington Post. Since this time, the expression has gained significant traction among Indian strategists. 331 See G. Khurana, ‘China’s String of Pearls in the Indian Ocean and its Security Implications’, Strategic Analysis, Vol. 32, No. 1, January 2008; and . Rehman, ‘China’s String of Pearls and India’s Enduring Tactical Advantage, IDSA Comment, 8 June 2010. 332 James R. Holmes, “Looking south: Indian Ocean,” Handbook of India’s International Relations (Routledge: London 2011), 160. 333 “China Blocked India’s ADB Plan over Arunachal, Confirms Krishna,” Indian Express, July 10, 2009. 334 For a detailed exposition of how India’s relationship with China has degraded in the latter half of the 00s, see Harsh V. Pant, “India Comes to Terms with a Rising China," in Asia Responds to its Rising Powers: China and India, ed. Ashley J. Tellis et al. (Seattle: The National Bureau of Asian Research, 2011). Pant concludes: “Sino-Indian ties have entered turbulent times, and they are likely to remain there for the foreseeable future” 128. Additionally for an exposition of Indian interests in the Indian Ocean, see David Brewster, “An Indian Sphere of Influence in the Indian Ocean?,” Security Challenges, Vol. 6, No. 3 (Spring 2010), 1 – 20. 335 Willy Lam, “China-Japan ties encounter severe turbulence in advance of Noda’s upcoming visit,” World Tribune, November 17, 2011, http://www.worldnewstribune.com/2011/11/17/china-japan-ties-encounter- severe-turbulence-in-advance-of-noda%E2%80%99s-upcoming-visit/.

Asia’s Democratic Bulwark exercises for the first time in 2012.336 PM Noda stressed the importance of these exercises in securing vital SLOCs for both nations—"As Asian maritime nations, we share vital interests concerning maritime security, including the safety of sea lanes [in the Indian Ocean],” he pronounced during his December 2011 visit to India.337 Observers have noted that these exercises will inevitably place pressure on China and its ambitions in the Indian Ocean. While relations with Beijing have soured in New Delhi and Tokyo, both countries still engage China both politically and economically. The evidence for neorealist forces driving security convergence is far stronger in these more recent years. Another driver of security cooperation between India and Japan in the late 2000s was the United States, and its interest in trilateral understanding between the three maritime powers in the Indo-Pacific.338 The three states had engaged in joint maritime exercises as early as 2007, but in late 2011, the three met for the first trilateral dialogue on strategic cooperation in Washington DC. 339 The Indian media particularly emphasized this dialogue as a symbol of India’s growing place as a relevant actor in the broader Asian security architecture—suggesting that Indian cooperation with Japan and the US is a natural part of its rise as a major world power.340 The trilateral further cemented a constructivist understanding of a values-based security contingent in Asia—indeed, one US official noted that “The amazing thing about our governments is that

336 “India and Japan Tweak Up Defence Ties and Finalize Debut Bilateral Naval Exercise,” Defence Now, November 4, 2011, http://www.defencenow.com/news/357/india-and-japan-tweak-up-defence-ties-and- finalize-debut-bilateral-naval-exercise.html. 337 Yoshihiro Kiyonaga, “Japan, India agree to boost maritime security cooperation,” Daily Yomiuri Online, December 30, 2011, http://www.yomiuri.co.jp/dy/national/T111229005248.htm. 338 See Rajaram Panda and Victoria Tuke for a more complete assessment of the trilateral engagement; see Rajaram Panda and Victoria Tuke, “India-Japan-US Trilateral Dialogue: A Promising Initiative,” IDSA Issue Brief, November 22, 2011, http://www.idsa.in/system/files/IB_India-Japan-US.pdf. Additionally, see H.K. Singh, and Karl F. Inderfuth, “An Indo-Pacific Triangle of Consequence,” ICRIER Issue Brief, Vol. 1, Issue 2, December 20, 2011. 339 “India, Japan, US meet today with China on minds,” Times of India, December 19, 2011, http://articles.timesofindia.indiatimes.com/2011-12-19/india/30533569_1_maritime-security-trilateral- dialogue-south-china-sea. 340 See “India, Japan, US meet today with China on minds,” Times of India, December 19, 2011, http://articles.timesofindia.indiatimes.com/2011-12-19/india/30533569_1_maritime-security-trilateral- dialogue-south-china-sea; “U.S. to host first India-Japan-US trilateral on Dec 19,” The Hindu, December 6, 2011, http://www.thehindu.com/news/national/article2692077.ece; “First US-Japan-India trilateral meeting,” Hindustan Times, December 20, 2011, http://www.hindustantimes.com/world-news/Americas/First-US- Japan-India-trilateral-meeting/Article1-784695.aspx.

Ankit Panda we really have shared values. That’s the foundation of it all. That’s the glue that binds us together.”341 Assistant Secretary of State for East Asia Kurt M. Campbell, who is known for his support for closer US-Japan and India-Japan ties, led the US delegation to this trilateral summit.342 Given the US desire to engage India on strategic matters, Japan has also felt comfortable expanding its relationship with India.343 vi. Security Cooperation: Realpolitik or a consequence of growing economic interdependence?

There is little evidence prior to 2008 that lends credence to a straightforward neorealist understanding of strategic rapprochement between India and Japan. There appears to be a limited focus on structural problems relating to an off-base balance of power in the bilateral relationship. Rather, given the prior economic analysis, the rapprochement between India and Japan on both economic and security terms, is better explained by turning to neoliberal theory, particularly complex interdependence, and liberal theory, given the wealth of evidence for private sector interests and individual leaders driving cooperation. Indo-Japanese security cooperation did begin in the maritime realm, but began with a focus on unconventional, non-state threats such as piracy, natural disasters, search and rescue, etc. Each of

341 Josh Rogin, “Inside the first ever US-Japan-India trilateral meeting,” December 23, 2011, http://thecable.foreignpolicy.com/posts/2011/12/23/inside_the_first_ever_us_japan_india_trilateral_meeting. 342 Campbell testified: “One of the most significant and consequential developments over the past ten years has been the strengthening of the U.S.-India relationship. Our efforts have been complemented and supported by Japan. Under the leadership of both the LDP and DPJ government, Japanese-Indian relations have strengthened and become more robust.” See Kurt M. Campbell, “US-Japan Relations for the 21st Century,” Testimony, Statement before House Armed Services Committee, July 27, 2010, http://www.state.gov/p/eap/rls/rm/2010/07/145191.htm. 343 It bears noting that following US sanctions on Iranian oil in early 2012, India and Japan, who along with China buy almost half of Iran’s crude exports, have reacted differently. India has been almost entirely non- compliant with sanctions, and has continued to engage Iran, transacting without the use of US dollars. Japan initially had trouble complying, given its post-Fukushima energy situation, but has since been granted an exemption by the United States and is now cooperative. The initial Indian and Japanese responses to these sanctions certainly demonstrate that trilateral differences persist. See “Japan to cut Iran oil imports after exemption from US sanctions,” Japan Today, March 21, 2012, http://www.japantoday.com/category/politics/view/u-s-to-exempt-japan-10-european-nations-from-iran- sanctions; and “Japan, US close to reaching broad agreement on Iran sanctions: Minister,” Platts, March 1, 2012, http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7304611; and Erika Kinetz, “India defies sanctions, won’t cut Iran oil imports,” Boston.com, January 31, 2012, http://articles.boston.com/2012-01- 31/business/31009464_1_oil-imports-iranian-oil-iran-exports.

Asia’s Democratic Bulwark these areas of cooperation is directed at ensuring that threats to interstate commerce, and exchange are minimized. This is also coherent with our understanding of the Manmohan Doctrine, which contextualized India’s foreign and security policies in the context of its economic growth. Neorealists pessimistic about Japan’s immediate security environment may point to any form of security cooperation Japan engages in as a form of external balancing—particularly given over 50 years of exclusive security dialogue with the United States. China’s rapid growth and militarization, the fragility of the Korean peninsula, and the Taiwan question, were all contentious points for Japanese strategy in the early 2000s. However, under the LDP, and even under Koizumi’s more activist foreign policy, Japan demonstrated no real interest in pursuing a security relationship with India for tangible power gains. Additionally, as Christopher W. Hughes has argued, many trends in Japanese foreign policy, domestic governance, and leadership suggest that Japan is seeking to normalize its position as an assertive power with real security stakes— beyond the chequebook diplomacy that characterized its ODA program.344 Japan’s Mutual Cooperation and Security Treaty with the US provided a de facto hedge for any immediate regional threats, but it may not be taking this for granted. Thus, neorealist explanations for the security convergence between India and Japan, at least in the earlier part of the decade, are unconvincing. Neorealist explanations of Japan’s sharp security convergence with India after the SGP in 2006 are, however, more credible. In both India and Japan, after 2006, there has been growing suspicion of Chinese militarism, particularly in the South China Sea, but also around the greater Indo-Pacific. The emergence of a de facto trilateral axis of cooperation between India, Japan, and Australia (each of whom share reciprocal bilateral security cooperation agreements) also is reconcilable under a neorealist understanding. From a constructivist perspective, the fact that India and Japan are committed to liberal understandings of good governance, democracy, human rights, and the rule of law also explains

344 See Christopher W. Hughes, Japan's Security Agenda: Military, Economic, and Evnironmental Dimensions (Boulder, CO: Lynne Rienner Publishers, 2004); and Christopher W. Hughes, Japan’s Re- emergence as a ‘Normal’ Military Power, Adelphi Paper (New York: Oxford University Press, 2004).

Ankit Panda their convergence. Shinzo Abe and Taro Aso certainly maintained this position, especially with their ‘Arc of Freedom and Prosperity’ and Quadrilateral initiatives. Strategists such as Michael J. Green in the United States, Brahma Chellaney in India, and Shinzo Abe in Japan have all called for greater India-Japan security cooperation precisely along the lines of promoting a status quo understanding of Asian balances of power, and additionally to strengthen multilateral fora.345

345 See Michael J. Green, “Japan, India, and the Strategic Triangle with China," in Asia Responds to its Rising Powers: China and India, ed. Ashley J. Tellis et al. (Seattle: The National Bureau of Asian Research, 2011); Michael J. Green, and Daniel Twining, “Democracy and American Grand Strategy in Asia: The Realist Principles Behind an Enduring Idealism,” Contemporary Southeast Asia, Vol. 30, No. 1, (April 2008), 1 – 28; Brahma Chellaney, “India-Japan relationship: Shared values to shared interests,” The Economic times, December 29, 2011, http://articles.economictimes.indiatimes.com/2011-12-29/news/30568722_1_india- japan-japan-and-india-comprehensive-economic-partnership-agreement; Brahma Chellaney, “Powering a dynamic, multipolar Asia,” December 30, 2009, http://www.hindu.com/2009/12/30/stories/2009123051481000.htm; “Abe bats for India-Japan-US Cooperation,” Maritime Security, September 20, 2011, http://maritimesecurity.asia/free-2/maritime-security- asia/abe-bats-for-india-japan-us-cooperation/.

Asia’s Democratic Bulwark

CHAPTER V: IMPLICATIONS AND CONCLUSIONS

I. TOWARDS A COMPREHENSIVE UNDERSTANDING OF THE INDO-JAPANESE STRATEGIC PARTNERSHIP IN THE 21ST CENTURY

This thesis tested the following hypotheses in explaining the strategic convergence between India and Japan in the 21st century:

H3: Common values, identities, norms, a sense of shared history, and mutually compatible visions for Asia have led India and Japan to converge in the 21st century. (Constructivism)

If the analysis above allows us to conclude anything with certitude, it would be that no single theory can account for the multiplicity of forces that drove convergence between India and Japan (the dependent variable). Rather, liberalism, neoliberalism, neorealism, and constructivism all explain the convergence differently, and with varying degrees of credibility. In the introduction, it was hypothesized that nonetheless, if any theories of international relations could offer the most convincing set of independent variables for this convergence, it would be liberal and neoliberal theory. Hypothesis H1, that India and Japan experienced an alignment of transgovernmental and transnational economic interests that led to their convergence; and that leaders in both countries demonstrated political will in rapprochement, is certainly powerful in explaining their convergence. Economic and security relations between India and Japan offer numerous examples where private actors, state economic interests, and

Ankit Panda individual leaders have driven convergence. Firstly, the ‘Manmohan Doctrine,’ which prioritizes India’s economic development, is consistent with India’s convergence with Japan, and is a classic example of neoliberal state behavior—India strives to converge with Japan to increase the probability of short-term and long-term absolute gain. Secondly, liberalism predicts the complex transnational advocacy of various Japanese private sector agents, and neoliberalism predicts the shift in Japanese ODA policy after FDI to India increases. Additionally, high- level leadership in both countries demonstrated strong political will to draw the two states together, albeit for different ideological purposes: Vajpayee, the anti-Nehruvian, was drawn to Japan seeking a strong commercial partner in Asia after the Look-East Policy, Singh, the neo- Nehruvian, was drawn to Japan because he thought convergence would help India’s long-term growth; Mori, Koizumi, Abe, Aso, Hatoyama, and, most recently, Noda, have all demonstrated great interest in the relationship as well. Complex interdependence also predicts strategically convergent institutions such as the CEPA after the SGP. The evidence presented in this thesis presents a persuasive case for the triumph of liberalism and neoliberalism as the most parsimonious explanations for convergence between India and Japan. However, the neorealist (H2) and constructivist (H3) hypotheses also fill in crucial gaps where liberal and neoliberal theories do not suffice. For instance, neorealist theory certainly accurately describes many aspects of security cooperation between India and Japan, especially after 2008, when their relations with China deteriorate. While the evidence for a clear-cut security dilemma driving Indo-Japanese rapprochement is sparse, the trend towards trilateral cooperation between India, Japan, and the US, and India, Japan, and Australia, demonstrates growing strategic linkages in the Indo-Pacific that are perceived by China as threatening. Constructivism’s contributions to our understanding of India-Japan relations are important, despite how obvious they might seem. H3’s major limitation is the lack variation in its independent variables over the entire time period—no paradigmatic shifts occur in normative factors in either country, with the exception of the CNC talks. The ‘Manmohan Doctrine’ and Abe and Aso’s ‘Arc’ represent brief ideological themes, but neither gains the necessary empirical traction to explain convergent events. Most observers of India and Japan acknowledge their ideational compatibility, and their Prime Ministers and Foreign Ministers consistently refer to their civilizational and historical links, pointing to

Asia’s Democratic Bulwark the transfer of Buddhism from India to Japan, and, unlike a majority of the Indo-Pacific region, India’s conflict-free history with Japan. With the exception of their understanding of climate change cooperation and the NPT/CTBT nuclear regime, India and Japan overlap in their belief in democracy, human rights, the rule of law, and the status quo in the Asia- Pacific. Under the Manmohan Doctrine, India’s priority has been its economic development, and its military capabilities have grown commensurate with its economic clout. While Japan’s foreign policy, and certainly its security policy, has become increasingly more multifaceted and independent in the 21st century, the vision for its relationship with India has consistently rested on a belief that India and Japan are partners ripe for values-based cooperation. Certainly Abe and Aso shared this belief. Table 5.1 (an update of Table 1.1) demonstrates the extent to which the various independent variables, after empirical analysis, caused convergence between India and Japan, prior to and after the SGP in 2006.

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Table 5.1: Cause-Effect Analysis Framework for Convergence Between India and Japan Causes for Interstate Convergence (IV) India-Japan Convergence (DV) Pre-SGP Post-SGP (++) / (+) / N (++) / (+) / N H1: Liberal and Neoliberal Liberal Economic interests of private Indian + ++ actors Economic interests of private Japanese ++ ++ actors Political will of leaders in India + ++ Political will of leaders in Japan ++ ++ Neoliberal Economic interests of the Indian ++ ++ government Economic interests of Japanese + ++ government Complex interdependence N ++ H2: Neorealist Threat perception from China in India + ++ Threat perception from China in Japan N + External balancing strategy in India N + External balancing strategy in Japan N + Indian desire to increase relative power + ++ Japanese desire to increase relative power N + H3: Constructivist Perceptions of normative compatibility in India + + Perceptions of normative compatibility in Japan + +

Given the analysis in Chapter 4, the original argument in this thesis, that H1 and liberal neoliberal theory best describe the rapprochement between India and Japan, carries the most weight. Stated succinctly, liberal and neoliberal theory, in contrast to neorealist theory, emphasizes that states, whose interactions occur on transnational and transgovernmental levels, cooperate to gain absolute gains rather than relative gains in an international order that may be quasi-anarchic. Both prior to and post-SGP, India and Japan perceived massive absolute gains emerging from economic cooperation, and their leaders demonstrated the political will to follow through. As early as Mori’s visit, it was evident that the vision set forth for the Strategic Global Partnership in the 21st Century tacitly and explicitly recognized the complementarities between Japan’s matured (and stagnant) economy, and India’s booming economy.

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Non-state agents in both states corroborated this belief when Japanese private investment began to flow into India, driving increased Japanese ODA. India’s receptiveness to Japanese engagement is evident with its political response—the passage of CEPA, the annual Prime Ministerial summits, and other high-level talks have certainly driven its engagement. Perhaps the strongest paradigmatic shift in India-Japan relations in the 21st century was a transition from transgovernmental engagement to transnational engagement—non-state actors such as multi-national corporations, and other private sector agents (such as the Japan Chamber of Commerce) certainly drove convergence. The analysis offered above suggests that an exclusively liberal and neoliberal understanding, privileging economic partnership and complex interdependence, may be too simplistic. Neorealism has its place in our understanding of India-Japan relations—especially after the SGP and JDSC. The single development that has had the greatest impact on both the reality and perceptions of a structural shift in Asia is the rise of China, and its rising ambitions. It is therefore unreasonable to claim that this has not conditioned Indo-Japanese convergence—another important structural shift. Japan and India have repeatedly pledged to strengthen the regional multilateral framework within such institutions as the ARF, ReCAAP, and the EAS. There exists a form of zero-sum institutionalism in the Indo-Pacific where India and Japan perceive any weaknesses in Asian multilateralism as gains in Chinese bilateralism— China’s preferred mode of negotiation, especially on issues such as disputes in the South China Sea and Taiwan.346 This has created strong stakes for India and Japan in Asia’s regional institutions. This thesis also reveals important independent variables that were neglected in the initial hypotheses and in broader literature on the subject. Particularly, the role of the United States’ policy and strategic thinking towards India has conditioned Japan’s policies towards India. This is evident particularly in the civil nuclear cooperation negotiations, which would likely not exist were it not due to the Bush Administration’s

346 Kun-Shuan Chiu, “China’s Multilateral Diplomacy in ASEAN and Implications for Relations Across the Taiwan Strait,” Paper draft prepared for the Third Global International Studies Conference, August 17-20, Porto, Portugal, http://www.wiscnetwork.org/porto2011/papers/WISC_2011-737.pdf.

Ankit Panda landmark decision to court India as a nuclear partner, and American support for India at the NSG. Additionally, the military exercises that took place under US auspices, such as the 2007 Pacific Ocean exercise and Malabar 2007, set the stage for the bilateral exercises that have been announced for later in 2012. Another significant finding of this thesis is that the India-Japan strategic partnership is largely an uncontroversial issue in the domestic politics of either country (civil nuclear cooperation being the exception). Finally, while constructivist compatibilities certainly make inter-state cooperation more likely, they are particularly invariant between India and Japan, and therefore do not explain any change in the dependent variable. Thus, H3 cannot be the strongest explanation for convergence. On the contrary, as analysts such as Brahma Chellaney have noted, the normative compatibility between the two states allowed for a decade-long transition from ‘shared values’ to ‘shared interests.’

II. IMPLICATIONS AND PROJECTIONS

While the above analysis emphasizes the importance of economic synergies in driving the convergence between India and Japan, it should not be understated that both states have much to gain from deepening their economic engagement. As it currently stands, trade with China continues to dwarf their reciprocal engagement. Japan has demonstrated a desire to hedge its reliance on China by moving manufacturing— particularly that of rare-earth metals— to India. Nonetheless, given the conclusion of CEPA, both governments should make a comprehensive effort to increase trade and investment. The CEPA, and the potential conclusion of the CNC talks, have the potential to exponentially increase transnational commerce and engagement. The relationship has certainly been undercapitalized, even as the strategic partnership has grown. India’s slow-but-sure development is steadily reassuring risk-averse Japanese investors to move to India. Political uncertainties with China are additionally driving private actors towards India.

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In the security cooperation realm, the most promising opening for India and Japan as aspirants for regional leadership is tri-lateral cooperation with the United States. Numerous strategists, including Michael J. Green, 347 Brahma Chellaney, Rajaram Panda, Hiroshi Hirabayashi, 348 Takenori Horimoto, 349 Shinzo Abe, 350 and others, see great value in preserving Asian multipolarity and multilateralism through a strong India-Japan-US axis. Additionally, institutionalists see this trilateral strengthening regional fora such as the ARF, EAS, and ReCAAP. This trilateral values-based cooperation comes with one strong caveat: it may aggravate China which has the options of reacting defensively against perceptions of encirclement by a ‘Concert of Democracies,’ or adopting accommodating strategies.351 Nonetheless, any structural arrangement intended to preserve peace in Asia, must incorporate China, and despite their differences, India and Japan are cognizant of this. Table 5.2 presents a framework for analyzing the impacts of the cooperation between India and Japan on stability in Asia, with a focus on China.

347 See Michael Green and Daniel Twining, “Why aren’t we working with Japan and India?” The Washington Post, http://www.washingtonpost.com/opinions/why-arent-we-working-with-japan-and- india/2011/07/18/gIQAIs6gMI_story.html. 348 See Hiroshi Hirabayashi, “Japanese Perspective on the Rise of China and India,” The Japan-India Association, May 2, 2011, http://www.japan-india.com/english/news/view/74. 349 Horimoto has engaged Chellaney in an intereview on many of these issues. See “Japan’s leading foreign affairs journal interviews Brahma Chellaney,” from “Japan-India Links Critical for Asia-Pacific Peace and Stability,” Gaiko Forum, Fall 2007, Vol. 7, No. 2, http://chellaney.net/2007/11/10/japans-leading-foreignaffairs-journal-interviews-brahma-chellaney/. 350 See “Abe bats for India-Japan-US cooperation to secure sea lanes,” Deccan Herald, 20 September 2011, http://www.deccanherald.com/content/192252/abe-bats-india-japan-us.html. 351 While the focus is mostly on US policy in East Asia, Thomas J. Christensen offers some analysis of China perceives India and Japan in Asian affairs, and possible Chinese responses to such regional developments; see Thomas J. Christensen, “Fostering Stability of Creating a Monster? The Rise of China and U.S. Policy toward East Asia,” International Security, Volume 31, Number 1, Summer 2006, 81 – 126.

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Table 5.2: Effects of India-Japan Cooperation on Peace in Asia

Factors Influencing Peace in Asia Results of India-Japan Cooperation ( + = stabilizing / – = destabilizing) Liberal Indicators Economic Integration and Interdependence High (+) / Low (–) International Institutions (Regional) Robust (+) / Weak (–) International Institutions (Global) Robust (+) / Weak (–) Democratization in China Promoted (+) / Ignored (–) Realist Indicators Security Dilemmas Aggravated (–) / Muted (+) Chinese Power Ambition Expansionary (–) / Contained (+) Overall Stability Indicator Stabilizing / Destabilizing

In the context of a world where the continuance of US hegemony into the 21st century has come under widespread doubt, and prospects of an ambitious and assertive China are on the rise, observers of Asian affairs should turn to India and Japan as potential guardians of stability in the region. Ultimately, a strategic partnership aimed at preserving peace and stability forged between Asia’s largest democracy and Asia’s richest democracy creates a formidable bulwark against destabilizing forces, and for the preservation of democratic values across the region. India and Japan stand for common values, share common interests, and are both closer to Washington than they are to Beijing. While they continue to engage Beijing, particularly on economic matters, they certainly fear its regional hegemony. They believe that they can serve as guarantors of a prosperous and peaceful regional order based on the status quo structural equilibrium.

III: CONCLUSION

This thesis examined the complete gamut of the bilateral relationship between India and Japan leading up to, and beyond, their strategic global partnership, and argued for a tripartite understanding of their rapprochement in the 21st century through liberal and neoliberal, neorealist, and constructivist lenses. It demonstrated that forces predicted by liberalism and neoliberalism best explain the strategic convergence between India and Japan. Neorealists and constructivists prevail where liberals and neoliberals do not. The vitalization of this relationship after 2000 is a function of political will, economic interests, and, to a lesser extent, realist considerations. Ideological compatibilities have broadly

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Asia’s Democratic Bulwark existed for most of their relationship and supported the bilateral convergence throughout the 2000s. While the theoretical analysis in this thesis demonstrates strong forces driving cooperation between India and Japan, it should be noted that this does not mean that the relationship has an unlimited potential for strategic growth. Economic cooperation has the potential to increase the most, given Japan’s undercapitalization of opportunities in India, and the relatively recent CEPA. However, the future of security cooperation rests on important exogenous factors such as the United States’ approach to India, and China’s posturing in the Indo-Pacific. It is evident that Japan is normalizing its thinking about the use of force in its foreign policy, and India continues to militarize while an increasingly unstable Pakistan and a belligerent China continue to drive its national security thinking. As long as their interests align, India and Japan will continue to strategically cooperate for mutual benefit and regional stability as Asia’s two greatest democracies.

* * *

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