Amidst all the frenzy surrounding the government’s decision to withdraw all Rs 500 and Rs 1000 notes from the system, the Modi government went on a mission to fulfil a significant foreign policy initiative late last week. Prime Minister Narendra Modi visited Japan to sign a landmark civil nuclear cooperation deal with his Japanese counterpart Shinzo Abe.
The deal would allow Japan to export nuclear technology to India, making it the first non-Non-Proliferation Treaty (NPT) signatory to have such a deal with Tokyo. The agreement also went on to cement bilateral economic and security ties as the two countries warm up to counter an assertive China. Relations between the two Asian giants have witnessed a surge under this administration. In a complete realignment of New Delhi’s foreign policy framework, Modi’s first visit to a country outside India’s immediate neighbourhood was Japan after taking over as Prime Minister.
Personal bonhomie aside, the ever-growing presence of China in the region on land and sea has compelled both leaders to align their strategic interests. In Modi, Abe has found a leader who shares his vision for the continent. The upswing in ties with Japan has arrived with a sharp slump in relations with China. Beijing has provided no assurances of dropping its resistance to UN sanctions against Pakistan-based terror mastermind Maulana Masood Azhar, who India holds responsible for the attacks in Pathankot and Uri. While the Jaish-e-Mohammed had been listed as a terrorist organisation since 2001, the group’s chief and motivator has suffered no sanctions. China also opposes India’s application for membership of the Nuclear Suppliers Group (NSG).
Although Beijing's argument based on procedural reasons is valid (India is not a signatory to the NPT), it is no secret that their actions come from a desire to support Pakistan, which has also applied for membership. China’s decision is an apparent attempt to scuttle India’s chances. The international community will never let Pakistan become a member of NSG, owing to its poor record on nuclear proliferation. China is well-aware that Pakistan’s nuclear program is India-centric. On Tuesday, China maintained its stand on the issue and called for a two-step “non-discriminatory” solution to admit non-NPT members into the 48-member elite grouping.
For Japan, meanwhile, Chinese coast guard vessels were seen near the disputed islands in the East China Sea. Abe’s decision to reach out to India also stems from fears that the United States of America, under a Donald Trump Presidency, may disengage from its commitments in East Asia. Throughout his election campaign, Trump asserted that the US should withdraw from protecting its traditional allies in the NATO and East Asia, and save precious American military resources. This sense of uncertainty among US allies in the region has strengthened the argument for close India-Japan ties to counter the growing Chinese influence in the Indo-Pacific region.
During Modi's recent visit, New Delhi expressed its “appreciation for Japan’s readiness to provide its state of the art defence platforms such as US-2 amphibian aircraft”. Early into his tenure, Japan was inducted as a permanent member of the annual trilateral (India-US-Japan) Malabar naval exercise held in the Bay of Bengal. In this time of uncertainty over America’s foreign commitments, Japan is looking to strengthen bilateral cooperation with India to protect their interests.
Of course, no diplomatic visit by the Indian Prime Minister is complete without a call for greater investments. Japan ranks among the top five sources of foreign direct investment in India. Reports indicate that Japanese firms have heavily invested in state-backed infrastructure projects. Amid India's efforts to woo investors, Japanese industry has sought early passage of the amended Land Acquisition Bill and further relaxation of "restrictions" on foreign financing in certain sectors to ensure "free and smooth" corporate business for its companies, reported Press Trust of India.
Both sides also continue to fall short on fulfilling their trade potential. The value of bilateral trade between Japan and India — Asia's second and third-largest economies — were $14.5 billion in 2015-16 as against $70.7 billion between India and China. A lot more work needs to be done in this regard.
However, it is the civil nuclear deal, which caught the eye of many observers. When India conducted its nuclear tests in 1998, Japan took serious offence and snapped all diplomatic ties and announced economic sanctions. One only has read a little modern history to understand its disappointment. Sanctions were finally lifted three years later, and in 2009, both sides began their annual strategic dialogue process.
In signing this nuclear deal, the Government of India seeks to diversify India’s energy stock into non-fossil fuel sources. For nuclear plants in India, this deal would allow Japanese firms to produce the latest reactor technology. “The nuclear deal will help India build up its clean energy reservoir and is expected to provide some relief to Japanese firms reeling under financial distress in a post-Fukushima world,” according to a recent editorial in Mint. However, there are several riders to this deal. Japan can terminate this deal if India ends its voluntary moratorium on nuclear weapons testing, which has been in place since 2008. This deal will have to be approved by Japan’s Parliament. There has been stiff political resistance in Japan against a nuclear deal with India, particularly after the disaster at the Fukushima Nuclear Power Plant in 2011.
Despite India’s track record, doubts persist among broad sections of the Japanese media whether the deal will guarantee that New Delhi will not resume nuclear weapons testing. Defence Minister Manohar Parrikar’s recent comments, where he had expressed personal doubts about India’s nuclear no-first-use policy, may not have helped India’s case. It was no surprise that the Ministry of Defence soon issued a clarification that these comments were personal and did not reflect the government’s stand.
“The clock is ticking, and Mr. Abe must bring the deal to Parliament in early 2017 to ensure that the commercial agreement for Westinghouse’s (owned by Toshiba) six reactors in Andhra Pradesh that is due in June 2017 comes through,” according to an editorial in The Hindu.