In the wake of Prime Minister Modi's impending visit to Japan and the India-Japan summit, which is scheduled to take place before the end of the year, it is important to assess the overall bilateral economic and security cooperation.

What is the current level of cooperation between India & Japan?

If the current level of cooperation is compared to 2000, when Prime Minister of India Vajpayee and Prime Minister of Japan Mori signed the "Global Partnership," the cooperation has developed manifolds, with over 45 working committees addressing concerns from sustainable development to space. The two countries are today "special strategic partners" and are working at the regional level on both security and development dimensions.

However, bilateral trade is still somewhat achieving its potential. Despite the 2011 Comprehensive Economic Partnership Agreement (CEPA), which aimed to eliminate tariffs on over 90 per cent of goods, businesses on both sides cite regulatory bottlenecks, lack of awareness, and logistical challenges as barriers to greater trade.

One of the most high-profile collaborations between India and Japan is the Mumbai-Ahmedabad High-Speed Rail (MAHSR) project, popularly known as the 'bullet train'

As pointed out by a leading expert on Japanese investment in India, Srabani Roy Choudhury, Professor, Centre for East Asian Studies, School of International Studies at Jawaharlal Nehru University, "If one is to assess this relationship based on trade and investment, the cooperation has not yielded the result as envisaged when CEPA was signed in 2011. Southeast Asian competition undermines Indian exports. Japan has slipped from the 13th position in 2021 to the 18th position in 2024."

Japan's bilateral trade with India totalled $22.85 billion during FY2024. Exports from Japan to India during FY24 were $17.69 billion, and imports were $5.15 billion. Japan's exports to India were 2.62 per cent of India's total imports, and India's exports to Japan were 1.18 per cent of India's total exports during FY24.

Concerning investment, Japan is the fifth most significant partner, and its investment is spread over sectors in which Japan has a competitive advantage. What is the trend now? Srabani, in her assessment, revealed the trend, explained, "In the period 2001-2015, Japan's investment showed upward progress, but over-competition in the sector, for example, automobiles, has put Japan's investment on the back foot. It is time for Japan to look at first how to get a competitive edge and second look at other sectors where there is compatibility with the Indian industry and get into a partnership."

The Bullet Train Project: A Symbol of Partnership

One of the most high-profile collaborations between India and Japan is the Mumbai-Ahmedabad High-Speed Rail (MAHSR) project, popularly known as the "bullet train." Funded largely by a soft loan from the Japan International Cooperation Agency (JICA), the $17 billion project is a symbol of the growing Indo-Japanese partnership.

While technology transfer and infrastructure development are seen as game-changers for India's transportation sector, the project has faced repeated delays due to land acquisition issues and pandemic-related disruptions. Still, both countries remain committed, and the project is expected to be operational by 2026–27.

In fact, the bullet train has reignited a new wave of business propositions for the Japanese investors who looked a different direction for their coveted and measured investment.

In recent years, India and Japan have been strengthening their bilateral defence ties, a partnership seen as a crucial strategic counterbalance to China's growing influence in the Indo-Pacific region

Srabani echoes a similar sentiment in her observation, pointing out, "The bullet train showcases the relationship. It has been delayed because of land acquisition issues and infrastructure delays. In 2020, it reached a point where the project would be disbanded."

She further confirmed that "with both parties going back to the drawing board, problems were addressed, the road map was recalibrated, and now the project looks towards a finishing line."

Opening defence cooperation with India

In recent years, India and Japan have been strengthening their bilateral defence ties, a partnership seen as a crucial strategic counterbalance to China's growing influence in the Indo-Pacific region. A new milestone in this relationship has been marked with the recent India-Japan agreement on the "Unicorn Masts" technology. This development is not only a testament to the expanding defence cooperation between the two nations but also holds significant geopolitical implications.

The Indian Navy will induct these advanced systems with additional elements, which are co-developed by Bharat Electronics Limited (BEL) in India with Japanese collaboration. Defence ties are moving a bit in the ambit of strategic collaboration, but it remains limited.

On the defence front, India and Japan have deepened cooperation through joint military exercises like "Dharma Guardian" and naval drills in the Indo-Pacific. Both are members of the QUAD alliance (with the US and Australia), emphasising the importance of a free and open Indo-Pacific.

Despite Japan's recent shift from a pacifist defence posture to a more assertive one, actual defence industrial cooperation with India is still in its nascent stages

However, defence collaboration has largely remained symbolic, with limited defence exports or joint production initiatives. Despite Japan's recent shift from a pacifist defence posture to a more assertive one, actual defence industrial cooperation with India is still in its nascent stages.

As Srabani further looks at the possibility of defence exchanges in terms of arms and systems, she affirmed, "Japan's defence cooperation must navigate how much its constitution permits it to engage. Abe had pushed the envelope to allow for arms deals, on which India-Japan cooperation in the defense sector has found a platform. However, Japan's entry into this sector is late, and they often lose out in bidding."

India-Japan summit

Prime Minister Modi's visit to Japan and the India-Japan summit are scheduled to take place before the end of the year. It is speculated that the visit and summit will reignite the potential cooperation in areas which are required to push on the bilateral agenda.

While the summit is planned at the apex level but it has yet to take off with any substantial takeaways. India and Japan agreed upon a yearly summit meeting in 2006, where the venue would alternate between nations. The first time one erred was in 2019 when Assam was the venue, and because of the CAA crisis, it was called off. Subsequently, with COVID-19, the summit meeting was compromised to online or on the sidelines of other forums. In 2022, Kishida visited India, and a summit meeting was held. He also declared the New FOIP in ICWA. But the visit, while highly important, could not stand up to the mark as expected.

"No statement was made. There have been meetings on the sidelines of other meetings, but no bilateral summit meetings have been held. Thus, the 2025 meeting is much in order, Srabani recalls.

Then what is expected now at the juncture where the geopolitics is more polarised and riddled with conflicts? What will be the key agenda?

"Issues would stem from global leadership concerns," Srabani puts forth her expectation, adding, "No doubt, the Indo-Pacific will be discussed, and Taiwan's concern will find a place."

Srabani also highlights the contentious issues on that table, which could include Myanmar and Bangladesh. It is also pertinent that Ukraine and North Korea should figure in the discussion.

Some of the key potential areas where India and Japan can speed the collaboration includes Space, AI, the health sector, and the education sector. Japan might add people-to-people exchange, especially addressing the skill workers from India. Japan's woes for a shrinking workforce are well noted.

"Infrastructure connectivity is part of Japan's Indo-Pacific vision, and my understanding is that more capital will be promised. However, this will come as a loan and a Public-Private Partnership," opined Srabani Roy Choudhury. Additionally, both countries will reinforce their commitment to climate change, sustainable development goals (SDG), and alternate energy.

Ultimately, one waits to see what prefix or suffix will be added to "Special India Japan Strategic Partnership.

 

Manish Kumar Jha is a Consulting & Contributing Editor for SP's Aviation, SP's Land Forces and SP's Naval Forces and a security expert. He writes on national security, military technology, strategic affairs & policies.