RSIS Monograph No. 23 INDIA-JAPAN RELATIONS RELATIONS INDIA-JAPAN INDIA-JAPAN RELATIONS DRIVERS, TRENDS AND PROSPECTS Arpita Mathur RSIS Monograph No. 23 Arpita Mathur RSIS MONOGRAPH NO. 23 INDIA-JAPAN RELATIONS DRIVERS, TRENDS AND PROSPECTS Arpita Mathur S. Rajaratnam School of International Studies Copyright © 2012 Arpita Mathur Published by S. Rajaratnam School of International Studies Nanyang Technological University South Spine, S4, Level B4, Nanyang Avenue Singapore 639798 Telephone: 6790 6982 Fax: 6793 2991 E-mail: [email protected] Website: www.rsis.edu.sg First published in 2012 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the S. Rajaratnam School of International Studies. Body text set in 11/14 point Warnock Pro Produced by BOOKSMITH ([email protected]) ISBN 978-981-07-2803-8 TABLE OF CONTENTS Chapter 1 Setting the Stage: India and Japan in History 1 Chapter 2 The Post-Cold War Turn 16 Chapter 3 The Drivers 33 Chapter 4 Strategic and Political Relations 50 Chapter 5 Economic Linkages 70 Chapter 6 Non-Traditional Security: Building Bridges 92 Chapter 7 Conclusion 118 About the Author 130 ACKNOWLEDGEMENTS This monograph is the outcome of my research in the South Asia Programme of the S. Rajaratnam School of International Stud- ies (RSIS). I am indebted to Dr. Rajesh Basrur, Senior Fellow and Head of the Programme, for providing me the opportunity to work on a subject I have always been interested in exploring. The monograph would not have been possible without his patience, encouragement and valuable inputs. A note of thanks is also due to all my colleagues at RSIS. The study was greatly enriched by my field visits to New Delhi and Tokyo, where I could interact with and gain insights from my interviews and meetings with several academicians, policy makers and members of the diplomatic circles. I would like to thank Professor Takenori Horimoto, Professor Takako Hirosei, officials of the Embassy of India in Japan and the Ministry of For- eign Affairs, Japan, Dr. Eiichi Katahara and Ms. Marie Yoshioka Izuyama (National Institute for Defense Studies), Dr. Masahashi Nishihara (President, Research Institute for Peace and Security) and Dr. Masanori Kondo and Ms. Rika Sasaki (Japan Institute of International Affairs). I would also like to thank Ambassador Arjun Asrani (former Indian Ambassador to Japan), Professor Sujit Dutta (Jamia Milia Islamia, New Delhi), officials of the Ministry of External Affairs (India) and the Embassy of Japan in India, Mr. Pritam Banerjee (Confederation of Indian Industry), Professor Purnendra Jain and Professor K. V. Kesavan (Observer Research Foundation, New Delhi). The RSIS Monograph Series Monograph No. Title 1 Neither Friend Nor Foe Myanmar’s Relations with Thailand since 1988 2 China’s Strategic Engagement with the New ASEAN 3 Beyond Vulnerability? Water in Singapore-Malaysia Relations 4 A New Agenda for the ASEAN Regional Forum 5 The South China Sea Dispute in Philippine Foreign Policy Problems, Challenges and Prospects 6 The OSCE and Co-operative Security in Europe Lessons for Asia 7 Betwixt and Between Southeast Asian Strategic Relations with the U.S. and China 8 Fading Away? The Political Role of the Army in Indonesian Transition to Democracy, 1998–2001 9 The Post-Tsunami Reconstruction of Aceh and the Implementation of the Peace Agreement 10 Post-Suharto Civil-Military Relations in Indonesia 11 People’s ASEAN and Governments’ ASEAN 12 Forgetting Osama Bin Munqidh, Remembering Osama bin Laden The Crusades in Modern Muslim Memory The RSIS Monograph Series Monograph No. Title 13 Do Institutions Matter? Regional Institutions and Regionalism in East Asia 14 Population Movements and the Threat of HIV/AIDS Virus at the Bangladesh-India Border 15 Collaboration under Anarchy Functional Regionalism and the Security of East Asia 16 Pandemic Preparedness in Asia 17 The 2008 Mumbai Terrorist Attacks Strategic Fallout 18 Islamic Education in Malaysia 19 Practising Strategic Foresight in Government The Cases of Finland, Singapore and the European Union 20 A Decade of Combating Radical Ideology Learning from the Singapore Experience (2001–2011) 21 From ‘Boots’ to ‘Brogues’ The Rise of Defence Diplomacy in Southeast Asia 22 ASEAN-China Free Trade Area Challenges, Opportunities and the Road Ahead 23 India-Japan Relations Drivers, Trends and Prospects CHAPTER 1 SETTING THE STAGE INDIA AND JAPAN IN HISTORY s a region located at the cusp of anarchy, competition and inter-dependence all at the same time, Asia presents an inter- esting locale of great and emerging power competition. More Aimportantly, the region assumes critical significance as a chessboard with multiple consequential and vital players—each with its own stra- tegic posture and outlook towards its rightful place in the international arena. Perhaps the most noteworthy development in this regard is the emergence of India and China which combines (somewhat uncomfort- ably at times) with the presence of Japan and the external influence of the United States. It is, therefore, only natural that the three major regional powers—India, Japan and China have to devise strategies to have a balanced response to all three contradictory but intertwined trends. There is also the presence of players like a resurgent Russia and ASEAN countries, which have become a potent power in themselves, especially in regional organisations. The core aim of this monograph is to undertake a study of the strate- gic, political and economic aspects of India-Japan relations as they have evolved over the years. The idea is to identify drivers bringing the two sides together as well as issues of common concern which could be built on to strengthen ties. It will conclude by highlighting the opportunities and challenges the two sides are likely to face in the process of building relations. The central research question is to decipher whether the rela- tionship that has started building up after a period of benign neglect is just a balancing act in response to the stimulus of China’s ascendance in 1 RSIS Monograph No. 23 India-Japan Relations: Drivers, Trends and Prospects the region or whether there is enough substance and rationale behind it to sustain ties in the future. The study is policy relevant because it identifies the weak links that need to be strengthened and maps out the relatively uncharted territories the two sides could consider joining hands in. A literature survey on India-Japan relations reveals that very little and fragmented work has been done on the subject.1 The current analysis will make a significant contribution in being based on the application of the power transition theory. Considering that China’s rise is one of the major concerns both sides face, this study hopes to make a significant and a novel contribution to the previous work on the subject, especially in considering the shifting power dynamics in Asia pushing both sides together. The study reveals that albeit the rise of China and resultant power shift in Asia becomes a primary driver bringing Tokyo and New Delhi together, there is much more substance to the relationship which has grown by leaps after 2001. Therefore, mere maintenance of balance of power vis-à-vis China is not the sole driver of foreign policy and bilateral relations between India and Japan. There are other forces like functional need, inter-dependence and simply the prospects of mutual gain, which shape relations between the two sides, even though these have not been fully realised and exploited. The economic aspect of the relationship remains strong in the Official Development Assistance (ODA) domain, but much needs to be done to realise the full potential of trade and for- eign direct investment. A number of key areas of possible cooperation can be identified for the future and built upon—in certain cases even improved to provide more muscle to relations. Of these, environment, nuclear energy, bio-technology and other non-traditional issues like prevention of climate change are probable areas of convergence. The study will begin by providing a brief overview of a historical backdrop to the development of bilateral relations. This might not appear to have a direct bearing on the overall pattern of the relationship as it stands now, but requires a prominent mention to underscore the fact that despite such rich cultural and historical linkages, India and Japan remained aloof from each other for much of post-war history. Of course, today these linkages are recognised, valued and factored in as a positive input in evaluation of relations. The study will go on to show that the end 2 Chapter 1 Setting the Stage: India and Japan in History of the Cold War which coincided with the promulgation of India’s “Look East” policy and the nuclear tests conducted by India in 1998 proved to be the two prominent turning points in the development of relations. The following section aims to decipher what drives the bilateral relationship today and whether the relationship is growing solely due to a stimulus arising out of the rise of China in Asia. The bilateral relationship will be studied in all its hues—political, strategic and economic—to paint a complete picture of ties. A unique paradox has defined India-Japan ties. On the one hand is the absence of any major dispute; on the other, the richness in relations has not been fully exploited for many years. Looking back in time, the post-Second World War period saw both countries share intellectual dis- cussion and a common vision of Pan Asianism. Japan also held a special place in being a prominent support base for members of the Indian revo- lutionary freedom struggle.