Prime Minister Narendra Modi
and his Japanese counterpart Shinzo Abe hugging each other last week should go
down as a defining moment in India-Japan relations. Traditionally, the Japanese
are not known to be demonstrative or even to encourage physical contact but if
the enthusiastic reception accorded to Modi during his five-day trip to Japan
his first bilateral trip outside the Indian sub-continent is any indication, New
Delhi and Tokyo are all set to transform geo-politics in Asia. There are arise
question why Modi's Japan visit was a watershed, cementing Asia's new democratic
axis and co-opting Tokyo as an important partner in India's development and a
collaborator on mutual security.
India and Japan are to cooperate on defense technology, maritime security and
military preparedness, including on how to deter aggression and ensure a
favorable balance of power in Asia.
For long, with major powers aggressively courting India to get a slice of its
rapidly growing market, New Delhi measured success of its diplomacy by how many
billions of dollars worth of contracts it doled out at a bilateral summit.
It made little effort reciprocally to secure lucrative contracts for Indian
industry. As a consequence, India is the only major global economy that remains
import-dependent, rather than being export-oriented, and thus relies largely on
domestic consumption to fuel its economic growth.
Modi, however, is committed to change that by making India stronger and more
robust by reviving slumbering economic growth. He knows there cannot be a better
and more reliable partner in India's development than Japan, especially if his
government is to significantly strengthen the country's manufacturing base,
upgrade its rickety infrastructure, create a network of new 'smart' cities, and
introduce bullet trains.
Japanese technology and investment can help make Modi's plans a reality. That is
why Modi laid emphasis on his 'no red tape, only red carpet' message in Japan,
saying he is striving to make India more hospitable for corporate activity.
'Some people say there is thick red tape in India, but I would like you to
believe there is a red carpet in India,' he told Japanese businessmen.
Japanese Prime Minister Shinzo Abe's $35 billion pledge in private and public
investment and financing over the next five years is indeed huge. This funding
will be used to improve Indian manufacturing and skills, create 'smart cities'
and electronics industrial parks, build high-speed rail lines and urban subways,
clean up the Ganges, produce clean energy, and accelerate rural development.
But if this $35 billion assistance is to make a major difference, India must
address its gaping current account deficit. India's monthly trade deficit is now
running at $11.76 billion.
The massive trade imbalance with China, which has soared from $1 billion in 2002
to $30 billion in 2013, is at the root of India's serious current account
deficit as the figure available for the most recent month (July) shows.
By importing raw materials from India but exporting finished products to it,
China has effectively turned asymmetrical trade into an instrument to prevent
India's rise as a peer competitor. China, India's largest source of imports, is
also leveraging its trade and financial clout -- including its role as a major
supplier of power and telecom equipment and its emergence as a lender to
financially troubled Indian companies -- to dissuade New Delhi from assertively
countering Chinese strategic encirclement.
Modi recognizes that New Delhi must strategically collaborate with Tokyo to
prevent the rise of a Sino-centric Asia, or else India's world-power aspirations
will be stymied for good.
Asia's balance of power will be determined principally by events in two key
regions: East Asia and the Indian Ocean. According to the 'Tokyo Declaration for
India-Japan Special Strategic and Global Partnership' unveiled during Modi's
visit, these two leading maritime democracies in Asia have agreed to 'upgrade
and strengthen' their defence relations and work together on advancing security
in Asia and the wider Indo-Pacific region, marked by the confluence of the
Indian and Pacific Oceans.
As energy-poor countries heavily dependent on oil and gas imports, India and
Japan are naturally concerned by China's mercantilist efforts to assert control
over energy supplies and transport routes as well as by its claim to more than
80 percent of the South China Sea, one of the world's busiest and most-strategic
waterways.
The new Indo-Japanese axis is pivoted on a mutual recognition that such an
alliance can potentially shape Asian geopolitics in much the same way as China's
rise or America's 'pivot' to Asia.
Together, Japan and India can impose discreet checks on China's propensity to
flex its muscles and to assert revanchist territorial and maritime claims.
Not surprisingly, Indian and Japanese strategic policies have started evolving
in parallel.
Long used to practicing passive, checkbook diplomacy, Japan under Abe is now
pursuing a strategy of 'pro-active contribution to peace' by looking beyond its
security ties with the US and building strategic partnerships with militarily
capable democracies in the Indo-Pacific region.
India, for its part, has progressed from doctrinaire nonalignment to
geopolitical pragmatism, the hallmark of Modi's foreign policy.
After many rudderless years, India and Japan have a prime minister with a sense
of purpose and direction. This has not only injected new-found energy in their
foreign policy but also is aiding the return of economic confidence in the two
countries.
Such a trend holds long-term strategic implications. For example, India's GDP
growth in three years could potentially overtake that of China, which faces the
specter of a slowing economy.
To be sure, Modi sees the United States as equally important to Indian economic
and security interests. Eager to restore momentum to India's relationship with
America, he has shaken off the visa-related humiliations heaped on him by
Washington for over nine years and is scheduled to visit the White House on
September 30.
The US has still not expressed regret for revoking his visa over unproven
allegations that he connived in Hindu-Muslim riots in 2002, when he was chief
minister of Gujarat. Yet Modi has decided to place national interest above
personal umbrage.
Modi is also reaching out to Beijing in the hope that he can co-opt a cash-rich
China as a partner in his mission to economically transform India. But this
approach is not without significant risks: For China, trade and economic
cooperation is about raking in profits, not about building political bridges.
So, booming trade has been no hurdle to its increasing territorial
assertiveness.
Yet Modi's overture appears predicated on the belief that growing economic
engagement will make Beijing more amenable to a peaceful settlement of border
and other disputes.
What makes India's relationship with Japan special is that it has none of the
military and trade tensions that bedevil its ties with China or the political
and commercial frictions that jar its relations with America. Between India and
Japan, according to Modi, 'There is only goodwill and mutual admiration.'
Abe has gone to the extent of saying that Japan-India relations hold 'the
greatest potential of any bilateral relationship anywhere in the world.'
With the economic and security interests of the two countries dovetailing
nicely, the process to significantly tap that potential is to be accelerated.
Modi urged Abe that the two countries should 'strive to achieve in the next five
years their relationship's unrealised potential of the last five decades.'
He added that there are 'no limits' to cooperation between the two nations and
that their actions will help shape the 21st century for Asia
Modi trip has helped cement the India-Japan alliance, with the Tokyo Declaration
calling the visit's outcome 'the dawn of a new era' in relations between 'Asia's
two largest and oldest democracies.'
This partnership will strengthen maritime security in the Indo-Pacific region -
the world's leading trade and energy seaway - and shape healthy and stable Asian
power equilibrium, with India serving as the southern anchor and Japan the
eastern anchor of this power balance.