Modi’s Visit to Tokyo: A Snapshot of Japan-India Relations

By Kota Takahashi |

Japanese Prime Minister Shinzo Abe has been working fervently to strengthen ties with countries outside of its direct neighborhood while relations with China and South Korea remain cool. A recent highlight of his diplomacy is newly-elected Indian Prime Minister Narendra Modi’s five-day visit to Japan from 30 August to 3 September. This visit was significant in multiple ways. Not only was it the longest visit by an Indian leader to Japan in years, but it was Modi’s first visit to states outside of its direct neighborhood since his elevation to Prime Minister in May. Prior to his visit, Modi’s official Twitter account even tweeted in eloquent Japanese, which received warm responses from the Japanese public. These episodes symbolize India’s willingness to reach out to Japan and underscore the mutually beneficial relationship between the two countries. However, a closer look at what came out of Modi’s visit shows that the reality is not so simple; there is a significant gap in the extent of bilateral cooperation in economics and security.

Modi’s visit brought about important outcomes to facilitate the underdeveloped economic relationship between Tokyo and New Delhi. According to the Japan External Trade Organization, bilateral trade between Japan and India amounted to only about 5% of that between Japan and China, and Japanese direct investment to India was only about one-fifth of that to China.  Abe’s announcement of his intention to pour in a total of USD$32.4 million in public and private investment and financing to India in the next five years was targeted to boost this lagging interaction.  Another important accomplishment in the economic dimension is investment projects directed to Indian infrastructure. India’s poor infrastructure—in which half of all roads are unpaved and 300 million people (roughly the same size as the U.S. population) live without access to electricity—is estimated to cost India as much as 2% of its GDP annually. On the flipside, accelerating the export of infrastructure has been the central agenda of Japan’s economic growth strategy, as seen in its ambitious goal of tripling infrastructure export totals by 2020. This match of supply and demand resulted in the agreement in which Japan will transfer USD$463.3 million to the India Infrastructure Finance Company Limited, along with around USD$144.6 million for the Guwahati Sewerage Project in Assam.

Compared to these accomplishments in the economic sector, progress in the strategic and security dimensions remained at best symbolic. Though its negotiation was reignited in May last year, a nuclear cooperation deal between Japan and India is still yet to be signed. The bilateral framework between Japanese and Indian foreign and defense ministers (2+2) was not elevated to the ministerial level from the current vice-ministerial level. After months of prolonged negotiations—one Indian media source reported that “Japan is close to signing an agreement to supply amphibious planes to India” as early as May last year—talks about the Indian purchase of ShinMaywa US-2 amphibious aircraft from Japan remain inconclusive.

One of the rationales behind this is the difference between the two states in their relations with China. Japan’s relationship with China has been rocky due to territorial rivalry and historical animosity, so much so that their heads of state have not had a summit since they both came to power about two years ago. On the other hand, despite Modi’s swipe at China prior to meeting with Abe, New Delhi has few reasons to frustrate Beijing by forming an anti-Chinese coalition with its regional rival. Beijing was quick to grasp the opportunity to improve China-India relations, sending its Foreign Minister to India promptly after Modi’s electoral victory. Though India and China had a border spat in the same region last year, their relationship was relatively stable at the time of Modi’s trip to Japan. There has been little development in the Chinese “String of Pearls” strategy that some in the defense industry argue is intended to militarily encircle India. And most significantly, since Japan cannot unilaterally satisfy all of India’s investment demands, India needs stronger ties with China to accelerate economic development further. In short, there is a significant disparity between the two countries in how they assess the Chinese threat and its economic power.

Of course, this does not mean that Japan and India cannot cooperate to achieve their national interests or that their ties are insignificant. There are numerous issues where the goals of both countries overlap and there is no doubt that Modi’s visit was a positive development. But the fact that both countries share certain values and interests does not directly translate into a strong political coalition between Japan and India, especially on critical and sensitive issues such as their relations with China. In this context, the recent standoff between India and China in the disputed region near Aksai Chin could work as a catalyst for bolstering Japan-India relations, but it remains to be seen how that will play out.