• India and Japan have agreed to promote financial cooperation and strengthen bilateral relations at the second India-Japan Finance Dialogue in Tokyo.

• The Indian delegation was led by Economic Affairs Secretary Ajay Seth while Atsushi Mimura, Vice Minister of Finance for International Affairs, Japan led the other side.

• The participants exchanged their views on the macroeconomic situation in both countries.

• The participants were also joined by representatives of Japan’s financial services industry for a session to discuss various financial regulatory issues towards further expansion of investment in India.

India-Japan Bilateral Relations

• Friendship between the two countries has a long history rooted in spiritual affinity and strong cultural and civilisational ties. 

• The Japan-India Association set up in 1903 is the oldest international friendship body in Japan.

• After World War II, India did not attend the San Francisco Conference but decided to conclude a separate Peace Treaty with Japan on April 28, 1952, marking the beginning of diplomatic relations. Since then, the relations have matured over the years to cover a wide range of areas of cooperation.

• India-Japan relations were elevated to ‘Global Partnership’ in 2000, ‘Strategic and Global Partnership’ in 2006, and ‘Special Strategic and Global Partnership’ in 2014.

• Japan has joined India-led initiatives such as International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI) and Leadership Group for Industry Transition (LeadIT). 

• India and Japan are also cooperating under Quad framework (Japan, Australia, India & US) and India-Japan-Australia Supply Chain Resilience Initiative (SCRI).

• Apart from the annual summits, regular exchanges take place at other high levels including foreign minister, defence minister, and National Security Adviser.

• India-Japan Defence and Security partnership has steadily deepened, showcasing both bilateral and multilateral cooperation through key military exercises and strategic engagements.

• The ‘Dharma Guardian’ exercise is a significant bilateral military training operation between the armies of India and Japan. It focuses on counter-terrorism operations in different terrains and promotes mutual understanding and interoperability between the two forces.

• Japan’s inclusion as a permanent member in the Malabar naval exercises in 2015, alongside India and the United States, highlights the growing strategic collaboration. This annual exercise focuses on enhancing naval cooperation, improving coordination, and fostering security in the Indo-Pacific region, particularly in response to China’s growing presence.

• Japan’s first-time participation in the MILAN naval exercise marks another milestone in the evolving defense relationship. MILAN is a multilateral naval exercise hosted by India, aimed at enhancing professional interaction, sharing best practices, and strengthening maritime cooperation among participating nations. Japan’s involvement underscores the growing trust and collaboration between the two nations, particularly in securing maritime routes in the Indo-Pacific.

• The agreement concerning Reciprocal Provision of Supplies and Services between the Self-Defence Forces of Japan and the Indian Armed Forces was signed in September 2020.

• Established in December 2017, the ‘Act East Forum’ aims to provide a platform for India-Japan collaboration under the rubric of India’s ‘Act East Policy’ and Japan’s ‘Vision of a Free and Open Indo-Pacific’.

• Agreement on Cooperation in the Peaceful Uses of Nuclear Energy was signed in November 2016. 

• The Bill came into force in July 2017 with the completion of internal procedures on both sides. This facilitated participation of Japanese companies in the Indian nuclear energy sector.

• India-Japan Comprehensive Economic Partnership (CEPA) came into effect from August 1, 2011.

• Bilateral trade totalled $21.96 billion during FY 2022-23. Exports from Japan to India during this period were $16.49 billion and imports were $5.46 billion. 

• India’s primary exports to Japan are petroleum products, organic chemicals, electrical machinery and equipment, non-metallic mineral ware, fish & fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn, fabrics and machinery etc. 

• India’s primary imports from Japan are machinery, electrical machinery, iron and steel products, plastic materials, non-ferrous metals, parts of motor vehicles etc.

• India-Japan Energy Dialogue was set up in December 2006 to promote cooperation in the energy sector in a comprehensive manner.

• The first High Speed Rail (HSR) corridor is being implemented from Mumbai to Ahmedabad with technical and financial assistance from government of Japan.

• Six Metro Rail projects are being implemented with technical and financial support from government of Japan.

Roadblocks to strengthening India-Japan ties

• China is actively working to block the rise of both India and Japan, particularly by increasing military pressure on them and opposing their bids for permanent membership in the UN Security Council. China views stronger ties between India and Japan as a threat to its regional dominance and influence, which complicates their bilateral relations.

• The growing rivalry between China and the US is contributing to instability in the Indo-Pacific region.

• The militarisation of the region, including arms races, military exercises, and manoeuvres in disputed waters (e.g., the South China Sea), poses security challenges for both India and Japan. The rivalry can lead to heightened tensions, complicating efforts to foster peace and prosperity in the region.

• Japan is currently experiencing a significant domestic debate on revising its national security and defense strategies. The evolving security policy has implications for its foreign relations, including with India.

• Additionally, Japan is adjusting to the legacy of former Prime Minister Shinzo Abe, a key figure in fostering strong India-Japan ties. His absence could create uncertainty or delays in progressing certain bilateral initiatives, particularly in defense and strategic cooperation.

(The author is a trainer for Civil Services aspirants.)