Prime Minister Narendra Modi visited Japan in October 2018 to participate in the annual Indian-Japan summit with his Japanese counterpart Shinzo Abe. This was the fifth annual summit between the two leaders and their 12th meeting since 2014. Besides bilateral issues, they deliberated on a range of regional and global issues of mutual interests including the situation in the Indo-Pacific region. The discussions between the two leaders reaffirmed the traditional bonds of friendship between the two countries and strengthened their multi-faceted cooperation in diverse fields. The visit also advance the vision of both countries to work together to promote peace and prosperity in the Indo-Pacific region and beyond.

Prior to Modi’s visit, the Japanese envoy to India Kenji Hiramatsu had observed that strengthening of defence and trade ties shall top the agenda. As it transpired, strengthening maritime cooperation, including the signing of the Mutual Logistical Support Agreement was one of the main agenda. Japan has evinced greater cooperation between the navies of the two countries in the field of maritime domain awareness and maritime security. Both sides also agreed to have greater defence equipment and technology cooperation, including joint research activities with regard to unmanned vehicles and robotics. For the first time the armies of the two counties are currently engaged in two weeks long joint military drill in Mizoram, and Japan will be an observer in ‘Cope India’, an Air Force drill between India and the US.

On the issue of defence procurement, India has expressed interest to procure the Soryu-class submarine from Japan. At present, the Japanese government is discussing this possibility with the private sector and there is no final decision on collaborating with India for the project yet. With regard to US-2 amphibious aircraft, both sides are discussing and some progress is expected in due course.

One of the drivers of the expanding cooperation in the defence and maritime domain between India and Japan is China’s increasing military footprint in the Indo-Pacific region and the perceived threat to the sovereignty of smaller neighbouring countries. The fear of disturbing regional stability because of China’s assertiveness on regional issue, including global commons, is drawing other countries that respect global rules of law and freedom of navigation closer.

Japan’s role is critical in managing an assertive China and joining hands with India could help to balance China’s growing regional influence and military assertiveness. It is quite plausible that Shinzo Abe may have discussed with Narendra Modi the issue of the Chinese assertiveness as also issues that he had discussed with Chinese President Xi Jinping during hs recent summit meeting in Beijing. This is so due to the fact that India and Japan enjoy mutual trust. There are no negatives in the relationship but only opportunities, which is why India-Japan partnership has been fundamentally transformed, making it robust in the form of ‘special strategic and global partnership’.

The bonhomie that Abe and Modi share has also helped in lifting the relationship further. It may be recalled Modi chose Japan among the first nations to visit after taking power four years ago. He has been urging countries in the Indo-Pacific region to unite against protectionism and cross-border tensions. Interestingly, the three major Asian nations – China, Japan and India – have come under American President Donald Trump’s protectionist onslaught, providing an opportunity for the three to work on their own economic strategies that would be in mutual interests. In particular, Trump’s policies have targeted mostly China with tariff. Trump has also accused Japan and other nations of unfair trade practices, which indirectly is pushing India and Japan to promote economic ties.

Abe has made bolstering and opening the nation’s economy central to his policies called “Abenomics”, and has encouraged trade, foreign investment and tourism. Although the US has remained Japan’s main ally, especially in defence, Abe is also courting other ties. He has also been vocal about free trade, which runs counter to Trump’s moves to raise tariffs. This background provides an ideal opportunity for Japan to expand and deepen economic cooperation by increasing investment in Indian projects. Japan’s assistance in building a super-fast railway system may be seen in this light too.

The two major take-away from Modi’s visit are : (a) agreeing to initiate 2+2 dialogue involving foreign and defence ministers; and (b) entering into a $75 billion bilateral currency swap agreement. While upgrading the institutional framework from Secretary to Ministerial level shall help in building a robust mechanism on the Indo-Pacific strategy, the currency swap agreement is expected to bring stability in foreign exchange and capital markets in the country. Being one of the largest swap arrangements in the world, it reflects the depth of the economic relationship between the two countries.

Dr Rajaram Panda is currently Lok Sabha Research Fellow, Parliament of India.