Stirrings in India’s Asian Relations

By GovernanceToday
In Cover Story
October 8, 2014
0 Comments
559 Views

The Modi government has moved fast on engaging key Asian powers. Whereas Modi’s visit to Japan was heavy on strategic content, Xi Jinping’s visit to India was marred by border stand offs. In the rapidly changing Asian power game, India needs to play its cards carefully in order to defend its interests.

ModiTHE MONTH of September has been quite significant for Indian foreign policy as the new government has reset the equations with key Asian states of Japan and China and with Australia. Needless to say, Japan and China are key elements to Indian interests in Asia, because of historical reasons. Japan has been India’s closest friend in East Asia, whereas China has been a complex issue for India’s foreign policy, thanks to hostile border problem and yet, very high and lopsided trade. And since Japan and China are not best of neighbours among themselves, India’s relation with each has an impact on its relation with the other. As such, Modi’s visit to Japan and Xi Jinping’s visit to India present a complex foreign policy landscape which needs careful calibration in Indian overtures to both these Asian powers.

Economically, each country is at a unique point of its evolution. India is home to the largest number of poor people in the world, whereas Japan was the first developed Asian country

THE CONTEXT OF VISITS
These visits have taken place in an emergent and uneasy East Asian environment. China has territorial disputes with many countries in the region and these disputes are get ting increasing hostile as militaries are coming ever closer to blows. Domestically, each of these countries has
got new leadership and is still crystallizing its foreign policy in light of domestic realities. Economically, each country is at a unique point of its evolution. India is home to the largest number of poor people in the world, whereas Japan was the first developed Asian country. China, on the other hand, has taken long strides economically and militarily over last three decades and is itching to regain its lost glory, which explains its new found assertiveness.

As for Japan and India, both Abe and Modi have come to power with a mandate to fight the economic morass that these countries were facing. Both countries were finding their prestige dwindling in global affairs. Finally, both countries are locked in bitter territorial tussle with a rising China; India has a festering border dispute with China in Arunachal Pradesh and Ladakh, whereas Senkaku has led to many near skirmishes between Japanese Self Defense Forces and Chinese PLA over last year or so. So, a distressful domestic environment and troublesome neighborhood encourages Abe and Modi to see strategic partnership as logical extension of relationship. China, on the other hand, is interested in keeping India out of Japan’s and US’ influence. It would wants to increase the economic relation with India to such an extent that a strategic angle to the relation could emerge in future. However, its border dispute is a deterrent which throws a spanner in any such effort.

MONEY TALKS
It is a well known fact that Indian growth story is withering, to a large part, because of lack of proper infrastructure and that India needs multi-
billion dollar investments to sustainably grow at a decent rate. This explains why PM Modi hard sold India as an investment destination during his Japan visit. For all the policy flip flops and lethargy of last half decade, this was a tough task indeed to lure Japanese who are known to be
very cautious investors. By promising a special cell in his PMO to look after Japanese investment issues, he tried to underscore that India would
lay out a ‘red carpet’ instead of ‘red tape’ for Japanese investment.

China has also expressed interest in India’s rail projects and is expected to bid aggressively for other infrastructure projects such as Delhi- Mumbai corridor and smart city projects which India is contemplating.

On its part, Japan promised to double Japanese foreign direct investment (FDI) and the number of Japanese companies operating in India over the next five years. It also assured to invest $35 billion investment during this time period. As India prepares to launch rapid transit systems in over a couple dozen cities, long-distance Japanese shinkansen technology would be a front runner to construct those systems. China has also expressed interest in India’s rail projects and is expected to bid aggressively for other infrastructure projects such as Delhi-Mumbai corridor and smart city projects which India is contemplating. Not to be left behind in Indian infrastructure business race, it has committed investment worth $20 billion over next five years. It has also agreed to set up industrial parks in Gujarat and Maharashtra and give more market access to India.

Modi-International-relation

Japanese on the other hand, have expressed interest in areas of clean energy, roads and highways and healthcare. Over last few years, as China has allowed protestors to become more vocal and threatening to Japanese business interests in that country, Japan has been looking to diversify its export basket. Considering the fact that exports to India is a tiny 1.2 per cent of total Japanese exports while China accounts for 20 per cent, the potential of Indian market is not lost on Japanese government and this explains the urgency to court India aggressively.

DEFENSE AND NUCLEAR TRADE WITH JAPAN
Japan under Abe has been inching towards being a normal country, shedding its pacifist shackles which were imposed by the American drafted constitution after World War II. A clear example of this move is the gradual beefing up Japanese Self Defense Forces. In fact, this process
of “normalization” which means a more robust military stance has been the cornerstone of Abe’s leadership. Keeping in tune with this stance, Japan has indicated to sell US-2 amphibian aircrafts to India, which could be Japan’s first military export in about half a century. As India is
looking to boost its defense after years of moribund stasis, Japan would be naturally seen as a source of advanced defense equipment and technology. The two countries have also decided for Japan to continue participating in the annual USIndia drills off the coast of Malabar, in
which Japan has been participating for last three years.

It is a well known fact that Indian growth story is withering, to a large part, because of lack of proper infrastructure and that India needs multi-billion dollar investments to sustainably grow at a decent rate. This explains why PM Modi hard sold India as an investment destination during his Japan visit.

As for civil nuclear trade, even though Indian Foreign Minister Sushma Swaraj had made much effort to push for a deal during PM Modi’s Japan visit, it could not come through during the visit. Considering the sensitivity of Japan on this issue, it would be safe to expect that the progress on this front would be slow. The kind of guarantee that Japan seeks from India on nuclear testing front would be too tough for India to commit.  Further, nuclear equipment manufacturers such as Toshiba and Hitachi are not buying into the tough Indian nuclear liability clauses. Finally, Japanese reluctance to grant India the right to reprocess spent fuel is hard for India to agree upon. As such, a nuclear deal still remains a work in progress.

BEYOND BUSINESS
While business is the overt interest that makes for good pictures in media, at a deeper level, all of these countries are recalibrating their stance in the great Asian power game which is evolving fast. Over last one decade, as the US, the paramount guarantor of stability in Asia, is seen to be gradually receding despite its “Pivot to Asia” policy and as China is looking increasingly aggressive, there is stirring for geopolitical realignment
in the region. The bonhomie between India, Japan and Australia and the explicit US blessing for this closeness indicate how the military equations in the region are slowly shaping up. On the other hand, the successful Silk Route initiative of China with Sri Lanka and Maldives has also generated substantial interest in strategic circles.

The increasingly alignment of Indian stance with that of Japan was displayed when Modi opined against the efficacy of “expansionist” designs of the 18th century during his visit to Japan. It was largely seen as a reference to China’s dispute with Japan over the Senkaku Islands. On its part, Japan elevated the relationship to a Special Strategic and Global Partnership, which though falls short of an alliance, but underscores increasing cooperation on strategic and defense issues.

The rising China factor has been a big variable in Asian strategic calculus for some time now. The Indo-Japanese defence cooperation is also being seen in this light. With Japan gradually emerging from its pacifist mores and taking greater responsibility of its security, any  military cooperation would inevitably be seen as a counter to China. The American efforts to engineer newer coalitions in Asia are also seen in the same light.

Many experts feel that after the civil nuclear agreement between India and Australia, the decade old QSD (Quadrilateral Security Dialogue) initiative, a brainchild of Japanese PM Abe and which has been in embryonic stage for long, could gain traction.

By deciding to continue with Japan’s involvement in annual Indo- US naval exercise, India and Japan have attempted to forge an even closer trilateral collaboration with the US. This confirms to the new trend in American security architecture in Asia wherein trilateral agreements with Asian countries underpin the “hub and spokes” model of security alliance. Further, many experts feel that after the civil nuclear agreement between India and Australia, the decade old QSD (Quadrilateral Security Dialogue) initiative, a brainchild of Japanese PM Abe and which has been in embryonic stage for long, could gain traction.

The strategic angle of Indo-China relations is more delicate. Because of the festering border dispute, India has little trust on China. On the other
hand, China sees India inclined towards forging an alliance with Japan and the US to “contain” it. Another disturbing aspect of relationship was seen when during President Jinping’s visit, the standoffs in Ladakh region did not improve indicating that Chinese are willing to allow border
problems to continue regardless of its impact on relationship. This can, however, allow relationship to grow only to a level and not beyond.

In international relations, there are multiple dimensions of relationships, and often their dynamics are at odds with each other. India, Japan
and China understand the importance of each other in economic sphere, but at strategic level, all of them are not on the same plane as all dyadic relations are not aligned. This conflicting interest paradigm throws up unique challenges for each country.

As far as India is concerned, it has played its cards well by moving closer to Japan on strategic plane, but making sure that it is not antagonizing
China. As for India-China relations, the multiple economic agreements during Xi Jinping’s visit show that the two sides have managed to isolate the border issue for the time being. But the two countries would not have a peaceful relation till the time a credible solution to the border issue is reached.

Moving forward, the challenge for Indian government would be to enhance the strategic cooperation with Japan and Australia on one hand and to send China clear signal that increasing trade would not prevent it from defending its territory. On a broader level, the Asian century is unfolding in a complex game of economic and geopolitical nature. India needs to play its cards carefully.