This week’s state visit by Japan’s Emperor Akihito and Empress Michiko to India is historic, and can become strategic on many counts. The seven-day visit, which started on November 30, is the first by a Japanese emperor to South Asia. It comes 53 years after Emperor Akihito and Empress Michiko first visited India as the crown prince and princess in 1960. At the time, they were hosted by the first leaders of independent India – President Rajendra Prasad, Vice President Sarvepalli Radhakrishnan, and Prime Minister Jawaharlal Nehru.
An economic partnership is the most important component of the India-Japan bilateral relationship. On the itinerary of the royal couple is a visit to Chennai, which has become a hub of Japanese auto companies supplying to markets in South Asia and Southeast Asia. The investment by Japan is being supplemented by $130 million in aid to Tamil Nadu for developing roads, power, and water distribution systems.  Japanese aid contributed to developing the Delhi metro rail, and similar assistance is now being extended to the Chennai and Bangalore metro railways. 
What makes the relationship especially strategic is Japan’s commitment to work with India on infrastructure, urban planning, and financial markets – the most challenging sectors of the economy. The Delhi-Mumbai Industrial Corridor (DMIC) is not only a case of foreign investment, but also of ambitious planning and effective coordination across multiple states, industry sectors, and stakeholders. Japan is involved in the development of smart grids, smart urban transportation, water and waste recycling, in addition to the freight corridor and the investment zones. 
The $50 billion currency swap agreement between Indian and Japan in September 2013 was a timely gesture that gave immediate relief to the rupee when our currency was falling precipitously.  The recently-announced joint initiative between Japan and India to develop an Asia-wide LNG pricing and trading hub could become another important step towards ensuring fair pricing and better procurement conditions for all Asian consumers. 
This geoeconomic engagement between the two countries has been underpinned by a largely trouble-free but not very intensive, till recently, geopolitical relationship. India has no bilateral disputes with Japan. The only major unhappy interlude between the two countries, in recent history, was Japan’s strong denunciation of India’s nuclear tests in 1998. At the time, yen-loans to India were frozen, the Japanese Ambassador to India was recalled, and Japan supported, with unseemly gusto, the UN’s sanctions against India. India was disappointed with Japan’s harsh position, especially as it clearly disregarded India’s support to an even more isolated Japan as the sole dissenter against the charges of war crimes by the Allied countries after World War II.
Now, of course, Japan is on the cusp of supporting India’s entry to the Nuclear Suppliers Group, which will promote nuclear energy for civilian use. Not only will that pave the way for American companies to invest in India’s nuclear energy industry, it will also enable Japanese companies keen on foreign markets, since the disaster at Fukushima in 2011 wound up Japan’s own nuclear energy plans.
Many of Japan’s recent overtures are paralleled by the assertiveness of a rapidly-rising China. China disputes Japanese ownership of the Senkaku islands, which Japan has administered since 1971 in the East China Sea. China’s announcement of its air defence zone in the area to overlap with Japan’s existing claim has added another military element to the rising nervousness.
The massive economic expansion, long physical contiguity, expansive maritime borders, and aggressive moves by China have destabilised Asia, especially South Asia and East Asia, forcing countries to seek alliances with similarly-affected nations. Japan already has a defence agreement with the U.S. Other countries, such as the Philippines and Vietnam, are gradually seeking closer alignment with the U.S. and Japan, though they recognise Japan’s imperial aggression during World War II.
As a consequence of these developments, a pacifist Japan may gradually resurrect its own military prowess. It already has the fifth largest defence budget in the world, technically superior warfare capabilities, and is famously said to be only a screwdriver away from a nuclear weapons capability.
As the rise of China polarises Asia, India too may be drawn into the realignments. Given the economic benefits of the partnership with Japan and the existing border disputes with China, many Indians feel inclined towards Japan. Yet, many efforts in the past have been largely futile. China reacted strongly to the quadrilateral naval exercises between India, Japan, Australia, and the U.S., and the trilateral exercises involving the U.S., derailing the plans of the working groups.
It is important for India to measure and work on its approach to Japan in a manner that does not adversely impact India’s important relationship with China. At the same time, India need not be constrained by self-imposed restraints regarding Chinese sensitivities.
One way to transcend the geopolitical complexities on the ground is to build virtual links between India and Japan, based on technical cooperation and financial integration. To achieve this, a momentum in the bilateral relationship will have to be maintained by both countries. The growing convergence of interests and the visit to India by the Japanese emperor can propel this momentum. Japanese Prime Minister Shinzo Abe’s visit to India next month as the chief guest at the Republic Day parade is likely to further consolidate the emergent dimensions of the bilateral relationship.
Neelam Deo is Co-founder and Director, Gateway House: Indian Council on Global Relations; She has been the Indian Ambassador to Denmark and Ivory Coast; and former Consul General in New York.
Akshay Mathur is Head of Research at Gateway House: Indian Council on Global Relations.
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