Relationship between India and Japan is makes good strategic sense as they bring together Asia’s largest and Asia’s richest democracies. It brings together two states who share a similarly strained relationship with China: economic dependence combined with strategic distrust. For India, Japan is a critical source of capital and commercial technology and see Japan as a natural and indispensable partner in our quest for stability and peace in the vast” Indo-Pacific region.

For a politically rising Japan that is beginning to shed its pacifist blinkers, India is central to both its economic-revival and security-building strategies. After prolonged economic stagnation, Japan faces difficult challenges, including a shrinking population, a spiraling public debt, a fundamentally deflationary environment, and a security dilemma compounded by constraints arising from the U.S.-imposed, post-war Constitution.

History

The tragedy of Cold War great power politics kept the two countries apart through the latter half of the 20th century, and on the economic front, things were timed poorly–Japan’s bubble burst just as India liberalized its economy. Late-1990s proved transformative in Japan’s relationship with India. After the Pokhran-II nuclear tests in May 1998, Japan condemned India and participated in the international sanctions regime against it. The relationship entered its contemporary phase of growth and normalization beginning with Prime Minister Yoshiro Mori’s visit to India in 2000.

Political Relations

The importance of Japan for India can be gauged by the fact that Japan is the only Asian country and second in the world – Russia being the other one – with which India has an institutionalized system of annual summits since 2006. (With Russia, India has been having annual summits since 2000).

Abe’s return to the helm boded quite well for India; he is known to be quite fond of India, and a strong proponent of improved strategic ties with the country. His strategic vision of the Asia-Pacific imagines India and Japan at the “Confluence of the Two Seas” bridging the Indian and Pacific Oceans. Indeed, negotiations on a nuclear deal resumed this year, but are still a long way from concluding.

The Civil Nuclear Cooperation agreement will ultimately work out for India and Japan. Much of this cooperation has been possible because, on most issues, Indian and Japanese policymakers act with strategic pragmatism. The nuclear issue, ultimately, is a clash of values. Despite the optimism present in both states with regards to the future of the India-Japan strategic partnership, there is a great need to reconcile this fundamental difference in values.

India’s ‘Look East’ policy posited Japan as a key partner. Japan and India, as energy-poor countries heavily reliant on oil imports from the unstable Persian Gulf region, are seriously concerned over mercantilist efforts to assert control over energy supplies and the transport routes for them. So the maintenance of a peaceful and lawful maritime domain, including unimpeded freedom of navigation, is critical to their security and economic well-being. That is why they have moved from emphasizing shared values to seeking to protect shared interests, including by holding joint naval exercises.

Trade

Japan is currently India’s third largest source of foreign direct investment; Japanese companies have made cumulative investments of around $2.6 billion in India since 1991.

Bilateral trade between the two countries more than doubled between 2006-07 and 2012-13. However, total trade has come down to $ 13.48 billion in 2016-17 from a peak of $ 18.5 billion in 2012-13.

Both sides are discussing the Delhi-Mumbai Industrial Corridor Project and Dedicated Freight Corridor Projects on the Mumbai-Delhi and the Delhi-Howrah routes. The Japanese government has also expressed interest to help establish a Chennai-Bangalore Industrial corridor and a Dedicated Freight project in the south, connecting the cities of Bangalore and Chennai.

Kenichi Yoshida, a director of Softbridge Solutions Japan, stated in late 2009 that Indian engineers were becoming the backbone of Japan's IT industry and that "it [] important for Japanese industry to work together with India." Trade between the two nations has also steadily been growing.

India-Japan signed Comprehensive Economic Partnership Agreement (CEPA)in 2011, which seeks to eliminate around 94% of the tariffs between Japan and India within 10 years.

Such initiatives were supplemented in the year 2014 by the “India–Japan Investment Promotion Partnership” signed during Prime Minister Modi’s visit to Japan for the bilateral summit.

Both the countries also remain engaged in negotiations for the creation of a “Regional Comprehensive Economic Partnership” (RCEP), which seeks to promote regional supply chains and is crucial for India’s Act East policy.

Japanese ODA, for long the backbone of the bilateral relationship, continues to provide long-term loans for India’s infrastructure development. Japanese ODA supports India’s efforts for accelerated economic development particularly in priority areas like power, transportation, environmental projects and projects related to basic human needs.

The Japanese government has expressed its interest in enhancing infrastructure investment projects such as India’s Mass Rapid Transit Systmes (MRTS), Ahmedabad metro, upgradation of ship-breaking yard at Alang Sosiya in Gujarat along with development of industrial cities in Gujarat and Maharashtra and integrated industrial townships in UP and Madhya Pradesh.

Japanese FDI into India for 2016-17 stands at $ 4.71 billion. Japanese FDI into India has mainly been in automobile, electrical equipment, telecommunications, chemical and pharmaceutical sectors. The situation regarding FDI is likely to improve especially on the back of active economic engagement between the two countries through increased number of agreements and memorandum of understanding (MoUs). Important example in this respect are initiatives such as the MoU for Transport and Urban Development signed very recently as well as the Social Security Agreement (SSA) between India and Japan, which is made operational from October 2016.

Japan expects India for improving the business environment, including the easing of regulations and the stabilization of the system. India established the “Japan Plus” office in the Ministry of Commerce and Industry in October 2014 as a "one-stop" location for resolving problems faced by Japanese companies.

India decided to introduce the Shinkansen system in December 2015, when Prime Minister Abe visited India. The Japan’s Shinkansen system is in a highest class of High-Speed Railway systems around the world in terms of its safety and accuracy.

Multilateral cooperation

Fifth India-U.S.-Japan trilateral in Tokyo

All three countries are fielded their disarmament and nuclear energy experts in an attempt to push forward the stalled civil nuclear energy agreement with the U.S. Japan is a vital third leg because one of its companies will supply a crucial component for the American nuclear reactors. This requires an India-Japan civil nuclear agreement and Tokyo’s nod on the terms of liability in case of an accident.

As all three countries have taken an interest in reconstruction of Afghanistan, proposals relating to high impact projects will also be considered.

India plans to export 6,000 tonnes of rare earth chloride to Toyota Tsusho, marking its entry into the sector after a seven-year-gap during which China dominated the market.

Defence

India-Japan bilateral relationship in the field of defence and security cooperation jump-started during Japanese Prime Minister Abe’s visit to India in August 2007. Since then, both the countries have issued ‘Joint Declaration on Security Cooperation’ (2008), its ‘Action Plan’ (2009) and signed an agreement which permitted the Indian Navy and Japan Maritime Self Defence Forces (JMSDF) to engage in joint training on a regular basis (2012).

Japanese Prime Minister Shinzo Abe talked about the ‘Diamond Concept’ in December 2012. As part of this concept, he visualized the United States, Japan, Australia and India to form a security “diamond” under which these countries were to collaborate to ensure peace and stability in the Indo-Pacific.

During Prime Minister Singh’s visit to Japan in October 2008, two leaders issued "the Joint Declaration on Security Cooperation between Japan and India". There are also various frameworks of security and defence dialogue between Japan and India including “2+2” Dialogue, Defence Policy Dialogue, Military-to-Military Talks and Coast Guard-to-Coast Guard cooperation.

At recent summit meetings, two Prime Ministers appreciated Japan’s regular participation in the Malabar Exercise and the entry into force of the two Defence Framework Agreement concerning the Transfer of Defence Equipment and Technology and concerning Security Measures for the Protection of Classified Military Information.

Departure in Japan’s policy position on transfer of defence equipment and technology has raised India’s hopes about new vistas of high-end defence technology cooperation. While considerable progress was achieved in strengthening defence cooperation, negotiation in the Joint Working Group (JWG) on the Utility Seaplane Mark 2 (US-2) have not yielded any significant result.

Possession of these aircrafts (US-2) is crucial for India to better surveil its Exclusive Economic Zone (EEZ) in the Arabian Sea and Indian Ocean Region (IOR), ensure speedy response to incidents near the Andaman and Nicobar Islands and assist other countries in the region.

Altogether, India-Japan defence and security cooperation signal a new level of strategic partnership between the two countries, which is complementary to India’s ‘Act East Policy’ and Japan’s focus on freedom of navigation in the South China Sea. In recent times, such a bilateral partnership becomes much more significant given China’s growing military assertiveness in the South China Sea and uncertainty over US’s future role and policy in the Indo-Pacific region.

Science & Technology and Cultural Cooperation

The Science & Technology Cooperation Agreement between India and Japan was signed in November 1985 with Ministry of Foreign Affairs Japan and Department of Science & Technology, India as nodal agencies on behalf of the two governments.

The cooperation picked up its momentum after establishment of India-Japan Science Council (IJSC) in the year 1993. The IJSC activities include collaborative research projects sessions, academic seminars, and exploratory visits by scientists from both countries and Raman-Mizushima lecture series.

Another important cooperation under the new science and technology initiative between JST and DST is a theme based activity. The initial theme was information and communication technologies (ICT) under which several projects were supported during 2006-2012. The current theme for JST-DST collaboration is on biomedical research.

A cultural agreement was signed between India and Japan on 29 October 1956. The Vivekananda Cultural Centre in Tokyo was inaugurated during the visit of ICCR President on 25 September 2009. The Centre offers classes on Yoga, Tabla, Bharatanatyam, Odissi, Sambalpuri, Bollywood dances and Hindi and Bengali languages.

The year 2012 marked the 60th Anniversary of the Establishment of Diplomatic Relations between Japan and India. Various cultural events took place both in Japan and in India to promote mutual

understanding between the two countries, under the theme of “Resurgent Japan, Vibrant India: New Perspectives, New Exchanges.”

During the visit of Prime Minister Modi to Japan in November 2016, the two Prime Ministers agreed to mark the year 2017 as a year of Japan-India friendly exchanges to further enhance people-to-people exchanges between Japan and India. The year 2017 also marks the 60th anniversary since the Cultural Agreement came into force in 1957.

In recent years, there has been a change in the composition of the Indian community with the arrival of a large number of professionals. These include IT professionals and engineers working for Indian and Japanese firms as well as professionals in management, finance, education, and S&T research who are engaged with multinational as well as Indian and Japanese organizations.

The Nishikasai area in Tokyo is emerging as a “mini-India”. The community is engaged in a range of cultural and social activities. Their growing numbers had prompted the opening of two Indian schools in Tokyo and Yokohama.

Oda

Since 1986, Japan has become India's largest aid donor. Besides, a total of 59 projects are under implementation with Japanese loan assistance. The loan amount committed for these projects is over $ 12 billion. These projects are in the sectors of power, environment and forests, urban transportation, urban water supply and sanitation, rural drinking water supply, tourism, irrigation, agriculture, shipping, railways, renewable energy and financial services.

Recently the two sides also signed a Japanese Overseas Development Assistance (ODA) whose two main components are a $130-million loan to Tamil Nadu for quick implementation of infrastructure projects such as roads, power, water supply and sewerage, and a $177.3 million for improving the education and research environment at the Indian Institute of Technology, Hyderabad, $150 million for Uttarakhand badly hit by landslips triggered by heavy rains in June. The focus will be on reconstruction of roads to holy shrines.

Nuclear Issues

The two countries are almost polar opposites when it comes to nuclear weapons and nuclear energy – as matters of national policy, and even, as a matter of national political identities. Nuclear weapons, and since the disaster at Fukushima, nuclear energy, are anathemas in contemporary Japanese political culture. The nation’s post-war foreign policy has taken on the cause of nuclear disarmament with some fervor.

Nevertheless, Japan has always felt uncomfortable with India’s status as a non-signatory to the Nuclear Non-Proliferation Treaty (NPT), the Comprehensive Test-Ban Treaty (CTBT), and the Fissile Material Cutoff Treaty (FMCT). In the early 2000s, prior to the official declaration of the Strategic Partnership in 2006, Japanese diplomats formally requested that India participate in negotiations for these treaties.

With the landmark 123 Agreement India has acquired a rather unique status among the global community of nuclear states when it received a waiver from the Nuclear Suppliers Group in 2008; it became the only non-NPT state to have achieved this and remains so to this day. The NSG waiver was largely a product of its excellent non-proliferation record in practice. 

In the wake of India’s effective acceptance into the mainstream club of nuclear-weapon states, Japan began negotiating a Civil Nuclear Cooperation deal. Japan’s brief switch from the LDP to the DPJ altered the political culture of the kantei, which made it difficult for the India-Japan political relationship to return to its previous high during the Abe-Fukuda-Aso era. The major disruption in the nuclear talks was the crisis at Fukushima Daiichi and the ensuing paralysis it inspired.

On the other hand, India desperately needs this agreement with Japan since Japanese companies have a virtual monopoly over the reactor vessels, which is crucial in maintaining civil nuclear plants. The agreement will allow French and American companies to install reactors in the plants in India.

Challenges

There is considerable scope for increased Japanese investment in India. Japanese companies have been conservative while dealing with India. Japanese investment in India is much below its potential. Japanese investors often face red tapism, issues related to taxation, corruption etc. in India. The slow growth in trade with Japan is also a cause of concern for India in the view that both countries have signed CEPA in 2011.

India has highlighted various issues which need to be addressed by the Japanese side for providing greater market access to Indian products in Japan, especially items with high potential like marine products and pharmaceuticals. India also sought recognition of the Indian organic standards by Japan to overcome sanitary and phyto-sanitary barriers.

In December 2016, Japan has dragged India to the World Trade Organisation’s Dispute settlement body for adopting safeguard measures on imports of iron and steel products. Japanese policy makers kept on stalling the India-Japan civil nuclear cooperation for long. It was only in 2017 that both countries were able to finalise the civil nuclear deal. Not only did it affect India’s energy security but it also created hindrance for Japanese investment.

Both India and Japan are energy deficient countries. Both rely upon imports of hydrocarbons from the Middle East/West Asia. The bilateral energy dialogue includes energy efficiency and conservation, renewable energy, coal, electricity, etc. This dialogue needs to show tangible results.

The two countries’ respective relationships with China. That is, the stronger that Japan-India cooperation becomes, the more China may feel that it is being contained. Despite concerns over China’s assertiveness in the Asia-Pacific region, Beijing remains a vital economic partner for both Tokyo and New Delhi.

There is difference in interpretation over freedom of navigation (FON) in EEZs. Both Japan and India acknowledge the importance of FON, but India’s position on FON is at least as – if not more – restrictive than China’s, as recognized in a DOD report.

In addition to the above challenges, there is uncertainty about the future of the Japan- India relationship after Prime Ministers Abe and Modi step down from office, since it was under their strong leadership that the relationship gained so much momentum. As long as China keeps up its assertiveness, Japan and India are likely to continue deepening their strategic relationship.

A challenge for India is to correct the lopsided trade and calibrate China’s market access to progress on bilateral political, territorial and water disputes, or else Beijing will fortify its leverage against India. After all, China does not shy away from making efforts to block the rise of India and Japan, including by stepping up military pressure on them and opposing the expansion of the UN Security Council’s permanent membership.

People to people contacts between India and Japan need to increase further. There are very few Indian students studying in Japan as compared from China. Clearly, Japan needs to make its universities and institutions of higher learning more attractive to Indian students. Interaction between the two countries has largely remained at the intergovernmental level.

Recent developments

India and Japan Vision 2025: Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World (December, 2015 Extracts from Ministry of External Affairs press release)

Vision for a Deep, Broad-based and Action-oriented Partnership- The peoples of India and Japan are guided by common cultural traditions including the heritage of Buddhism, and share commitment to the ideals of democracy, tolerance, pluralism and open society. India and Japan, two of the largest and oldest democracies in Asia having a high degree of congruence of political, economic and strategic interests, view each other as partners that have responsibility for and are capable of responding to global and regional challenges.

• The two Prime Ministers (Shinzo Abe and Mr. Narendera Modi under the vision document reiterated their unwavering commitment to realise a peaceful, open, equitable, stable and rule-based order in the Indo-Pacific region and beyond. India and Japan uphold the principles of sovereignty and territorial integrity; peaceful settlement of disputes; democracy, human rights and the rule of law; open global trade regime; and freedom of navigation and overflight. They pledged to work for peace, security and development of the Indo-Pacific region toward 2025 underpinned by these principles.
• Closer coordination and effective communication, bilaterally and with partners, to address existing and emerging challenges in spheres of security, stability and sustainable development. They underlined their determination to expand cooperation with other partners, to enhance connectivity in the Indo-Pacific region. India and Japan will work to strengthen regional economic and security forums and coordinate their actions to tackle global challenges including the reform of the United Nations, climate change as well as terrorism.
• The imperatives of a stronger bilateral strategic partnership require deep and broad-based cooperation and concrete actions in defence, security, economic and cultural fields. Our future-oriented partnership raises our collaboration to a new level in areas of infrastructure, manufacturing and high technology, including advanced transportation systems, civil nuclear energy, solar power generation, space, biotechnology, rare earths and advanced materials.
• Recognising the importance of people to people exchanges and cultural ties, the two Prime Ministers resolved to boost opportunities for study, tourism, youth exchanges and educational collaboration to deepen broad-based and diversified engagement between the two peoples.
• Agreement concerning the Transfer of the Defence Equipment and Technology and the Agreement concerning Security Measures forthe Protection of Classified Military Information, which further strengthens the foundation of deep strategic ties. Taking note of the Agreements, they reaffirmed their commitment to continue discussions to deepen the bilateral defence relationship including through two-way collaboration and technology cooperation, co-development and co-production. The two Prime Ministers expressed their intention to explore potential future projects on defence equipment and technology cooperation such as US-2 amphibian aircraft.
• Japan’s participation in the India-US Malabar Exercises on a regular basis is welcomed, as it would help create stronger capabilities to deal with maritime challenges in the Indo-Pacific region, including through enhanced disaster response and mitigation capacity. They reaffirmed their desire to further develop dialogue and exchanges between the two countries in the security and defence fields, including through the full utilisation of ‘2+2 Dialogue’, Defence Policy Dialogue, Military-to-Military Talks and Coast Guard to Coast Guard cooperation. The two Prime Ministers appreciated the decision to begin Air Force-to-Air Force staff Talks.
• Highlighting the need to leverage their excellent bilateral relations to promote trilateral dialogues and cooperation with major partners in the region,  the Japan-India-U.S. Trilateral dialogue among the Foreign Ministers of the three countries was held in New York in September 2015. They noted with satisfaction the efforts of the three countries to seek closer cooperation in such areas as humanitarian assistance and disaster relief, regional connectivity as well as maritime security. The two Prime Ministers expressed satisfaction on the inaugural Japan-India-Australia Trilateral dialogue. They were of the view that these dialogue mechanisms could contribute to regional efforts to evolve an open, inclusive, stable and transparent economic, political and security architecture in the Indo-Pacific region.
• Seeking the synergy between India’s "Act East” policy and Japan’s "Partnership for Quality Infrastructure”, the two Prime Ministers decided to develop and strengthen reliable, sustainable and resilient infrastructures that augment connectivity within India and between India and other countries in the region. The two Prime Ministers pledged to advance industrial networks and regional value chains with open, fair and transparent business environment in the region. They recognised the importance of enhancing their cooperation and coordination bilaterally and with other stakeholders to realise this strategic initiative.
• The agreement reached between the two Governments on the Agreement between the Government of Japan and the Government of the Republic of India for Cooperation in the Peaceful Uses of Nuclear Energy, and confirmed that this Agreement will be signed after the technical details are finalised, including those related to the necessary internal procedures.

Investing in the Future-

• India’s railways modernisation and expansion plans open up commercial opportunities for Japanese companies in high speed rail, station re-development and rolling stock manufacturing.
• Introduction of Japan’s High Speed Railways (HSR) technologies (the Shinkansen system) to Mumbai-Ahmedabad route. Prime Minister Modi appreciated Japan’s consideration of providing highly concessional yen loan for the HSR on Mumbai-Ahmedabad route. Both sides will explore further strengthening of their partnership in high speed railways, which is a high technology area having potential to transform India’s transportation sector.
• Prime Minister Abe commended Prime Minister Modi’s strong initiatives such as "Make in India,” "Digital India,” "Skill India,” "Clean India” and "Smart City”. Prime Minister Abe also expressed his intention to support India’s efforts by sharing its advanced skills and technologies and through active mobilisation of Japanese public and private sector involvement, including Official Development Assistance (ODA).
• Steady progress to realise 3.5 trillion yen of public and private financing to India in five years under the "Japan-India Investment Promotion Partnership” announced during the last annual summit meeting.
• Prime Minister Modi welcomed the "Japan-India Make-in-India Special Finance Facility” up to 1.5 trillion Yen by Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC), which aims to promote direct investment of Japanese companies and trade from Japan to India, to support their business activities with counterparts in India, including development of necessary infrastructure, and to help materialise Make-in-India policy of the Government of India.
• Sharing the view that the future of Asia needs to build on the positive influence of traditions of non-violence and democracy in Asia, the two Prime Ministers welcomed the Samvad conference held in India in September and looked forward to Japan hosting the next conference in January 2016.

Vision for Peace and Stability - Recognising that peace, stability and development in the Indo-Pacific region is indispensable to their national security and prosperity, they reaffirmed that close cooperation between Japan and India is the key to achieving peace and stability in the region. They welcomed the progress in strengthening the East Asia Summit to enhance dialogue on political and security issues, and reaffirmed their commitment to continue to work with all partners, especially with ASEAN which is at the core of EAS, to make EAS the premier leaders-led forum to discuss regional peace and security agenda.

Expressing their commitment to the principles of sovereign equality of all states as well as respect for their territorial integrity, they affirmed closer cooperation in safeguarding the global commons in maritime, space and cyber domains. They underscored the importance of international law including the United Nations Convention on the Law of the Sea (UNCLOS) and peaceful resolution of disputes without use or threat of use of force; freedom of navigation and overflight and unimpeded lawful commerce in international waters.

In view of critical importance of the sea lanes of communications in the South China Sea for regional energy security and trade and commerce which underpins continued peace and prosperity of the Indo-Pacific, the two Prime Ministers noting the developments in the South China Sea called upon all States to avoid unilateral actions that could lead to tensions in the region. They were of the view that full and effective implementation of the 2002 Declaration on the Conduct of Parties in the South China Sea and early conclusion of the negotiations to establish a Code of Conduct in the South China Sea by consensus will contribute to peace and stability of the region. They decided to hold regular close consultations on the issues related to maritime safety and security of sea lanes of communication.

Sharing their concerns about the growing threat and universal reach of extremism, the two Prime Ministers reiterated their strong condemnation of terrorism in all its forms and manifestations with ‘zero tolerance’ and reaffirmed their deep concern over the continued threat posed by terrorists and terrorist groups. They called upon all countries to implement the United Nations Security Council Resolution 1267 and other relevant resolutions designating terrorist entities. They also called for eliminating terrorist safe havens and infrastructure, in disrupting terrorist networks and financing channels, and stopping cross-border movement of terrorists. They underlined the need for all countries to effectively deal with trans-national terrorism emanating from their territory. They emphasised that the evolving character of terrorism called for stronger international partnership in combating terrorism, including through increased sharing of information and intelligence. They affirmed the importance of bringing the perpetrators of terrorist attacks including those of November 2008 terrorist attack in Mumbai to justice.

The two Prime Ministers expressed concern over North Korea’s continued development of its nuclear weapons and ballistic missile programmes, including its uranium enrichment activities. They urged North Korea to fully comply with its international obligations, including under relevant United Nations Security Council resolutions and to take actions towards thedenuclearisation of the Korean Peninsula. They also urged North Korea to address at the earliest the abductions issue.

Prime Minister Abe briefed Prime Minister Modi on Japan’s efforts, including the "Proactive Contribution to Peace” based on the principle of international cooperation and the "Legislation for Peace and Security,” to contribute even more to peace, stability and prosperity of the region and the international community. Prime Minister Modi welcomed and supported Japan’s efforts anddesire to enhance its contribution to global peace, stability and prosperity.

The two Prime Ministers reaffirmed their intention to work together for the early realisation of U.N. reforms, particularly the Security Council reform, to better reflect the realities of the international community in the 21st century. They welcomed the recent developments in the Inter-Governmental Negotiation (IGN) process, towards the launch of text-based negotiations, and reaffirmed their determination to redouble their efforts towards achieving concrete outcomes during the 70th Session of the U.N. General Assembly. The two Prime Ministers reiterated their support for each other's candidature, based on the firmly shared recognition that India and Japan are legitimate candidates for permanent membership in an expanded Security Council.

Recognising India as the largest democracy and a fast growing large economy in the Asia-Pacific region, the Japanese side conveyed its support to India’s membership of the APEC as a positive contribution to the economic integration in the region.

The two Prime Ministers, on the occasion of the 70th year since the atomic bombings of Hiroshima and Nagasaki, reaffirmed their shared commitment to the total elimination of nuclear weapons. They called for an immediate commencement and early conclusion of negotiations on a non-discriminatory, multilateral and internationally and effectively verifiable Fissile Material Cut-off Treaty (FMCT) on the basis of Shannon Mandate. In this context, Prime Minister Abe stressed the importance of early entry into force of the Comprehensive Nuclear Test Ban Treaty (CTBT) which should lead to nuclear disarmament. They also supported the strengthening of international cooperation to address the challenges of nuclear proliferation and nuclear terrorism.

The two Prime Ministers recognised the importance of effective national export control systems. Japan welcomed India’s intensified engagement with export control regimes.The two Prime Ministers affirmed their commitment to work together for India to become a full member in the four international export control regimes: Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement and Australia Group, with the aim of strengthening the international non-proliferation efforts.

INDIA-JAPAN AGREEMENT FOR COOPERATION IN THE PEACEFUL USES OF NUCLEAR ENERGY

The India-Japan Agreement for Cooperation in the Peaceful Uses of Nuclear Energy entered into force on July 20, 2017.

About the agreement:

• The Agreement was signed on November 11, 2016 in Tokyo during the visit of the Prime Minister to Japan.
• Under the agreement Japanese firms will supply nuclear materials, equipment and technologies to India for peaceful and non-explosive purposes.
• The companies also provide support services for designing, building and operating reactors.
• A landmark civil nuclear cooperation deal between India and Japan provides for collaboration between their industries in the field came into force after the eight months of final agreement. The deal took over six years of negotiations to finally see the light of day.
• The memorandum signed on civil nuclear energy cooperation is more than just an agreement for commerce and clean energy. It is a shining symbol of a new level of mutual confidence and strategic partnership in the cause of peaceful and secure world.
• The deal allows Japan to export nuclear technology to India, making New Delhi the first non-NPT signatory to have such a deal with Tokyo.
• Japan is a major player in the nuclear energy market and an atomic deal with it will make it easier for US-based nuclear plant makers Westinghouse Electric Corporation and GE Energy Inc. to set up atomic plants in India as both these conglomerates have Japanese investments.
• According to the agreement, Japan will also assist India in nuclear waste management and will undertake joint manufacturing of nuclear power plant components under the 'Make in India' initiative.

Significance:

• This agreement is a reflection of the strategic partnership between India and Japan and will pavethe way for enhanced cooperation in energy security and clean energy.
• The agreement seeks to promote full cooperation between the two countries in the development and uses of nuclear energy for peaceful purposes on a stable, reliable and predictable basis.
• India signed a landmark nuclear deal with the US in 2008, clearing the path for the country to source nuclear power plants and technology from international markets. But with Japanese companies in possession of critical technologies an accord with Japan was pivotal for India.
• The deal is significant as it will help guarantee Japan’s continued support to India’s civil nuclear programme.
• The deal is also likely to revitalize Japanese nuclear majors that are yet to recover from the setback of the Fukushima accident.
• The nuclear issue in many ways was a constraint. It was preventing India and Japan from engaging in a more robust and wide spectrum manner. The deal will bring Japan into the Indian nuclear market where France and Russia have already have a strong presence. India-Japan nuclear agreement: a termination clause
• Like in the India-US civil nuclear cooperation agreement, a termination clause is built into the agreement with Japan.
• According to the clause the countries reserve the right to terminate cooperation if India conducts a test as it would violate the September 2008 statement. But it won’t be easy as termination would be a politically and commercially cumbersome process as: o A joint security assessment would have to be made on the reasons leading up to any such provocative action. It would also be taken into account whether there was a provocation by another country’s action for such a move.
• A safety assessment would have to be carried out on the impact of any cessation of cooperation. This means a determination on whether any facility’s safety would be compromised by stopping supplies.
• Finally, there is a right to return clause, which essentially means if all material supplied under the cooperation, would have to be returned. While this right is recognized, the cost would have to be borne by Japan.
• India currently has a moratorium on nuclear testing and intends to foster stronger commercial ties with these countries in sector. Deeper the connect, more complicated the termination.