Context: Indian and Japanese warships conducted exercises in the Indian Ocean last week. The Japanese Maritime Self-Defence Force described the manoeuvres as designed to “promote mutual understanding” and consisted of four warships, two from each country. 

• Naval exercises are now routine between India and Japan, but the timing of the present exercise will be related with the military stand-off between India and China in Ladakh. The Indian navy training vessels INS Rana and INS Kulush were joined by the Japanese navy’s JS Kashima and JS Shimayuki. 
• The Japanese embassy in New Delhi said this was the 15th such exercise in three years. The Japanese navy has become one of the principal partners of the Indian Navy. Indian naval ships take part in the exercise, both bilaterally with their Japanese counterparts and as part of the Malabar Exercises, which include the United States.
• Japan has one of the best non-nuclear submarines in the world and cutting edge anti-submarine warfare technology.

Why is Japan important to India?
Financial

• Japan has invested in the $90 billion Delhi-Mumbai Industrial Corridor (1,483 km high-speed rail and road line) which will see the setting up of new cities, industrial parks, ports and airports.
• It is also backing the Ahmedabad-Mumbai bullet train service and has already released the first tranche of 5,500 crore rupees.
• Japan is the third-largest source of FDI ($28.160 billion between 2000 and June 2018) investment into India after Mauritius and Singapore.
• In Dedicated Freight Corridor, a project of close to Rs 50,000 crore of which Japanese assistance has been of about Rs 38,000 crore.

Defence Cooperation

• History- Indo-Japanese strategic cooperation has been growing since the 2+2 dialogues at the defence and foreign secretariat levels in 2010.
• These 2+2 ministerial-level dialogues between the defence and foreign ministries are the outcome of the Vision statement which Indian and Japanese Prime Ministers had put forward after the 13th summit in 2018.
• The dialogue welcomed the significant progress made in the negotiations of Acquisition and Cross-Servicing Agreement (ACSA).
• It appreciated the existing exchange programs between the defence educational and research institutions.
• It acknowledged the trilateral cooperation with the US in the form of MALABAR exercises.
• Japan hosted the Malabar 2019 which is a very significant achievement in itself because Japan has never hosted this trilateral naval exercise in the past.
• It also recognised the significance of Quadrilateral Security Dialogue (QUAD).
• This dialogue focused on maritime dimensions and maritime security.
• All three defence forces, as well as the coastguard, has had joint bilateral exercises with Japan (SHINYUU Maitri, Dharma Guardian and JIMEX).
• India-Japan relations have a congruence of not only defence interests but also of their foreign policy.

What should be the focus of India- Japan relationship?

• The Indo-Japan relations is to countering China Influence in Indian Ocean and South China Sea but now countries should go beyond countering China.
• India is the member of SCO and BRICS and Abe promised for the "new era" of relations during his China visit.
• After the visit, Japanese leadership has stated that they are looking forward to participating in the Chinese Belt and Road Initiative (BRI) and India is also working to improve the relationship with China as was evident during the Wuhan Summit earlier this year.
• Hence, there is no need to see the Japan-China and India-Japan bilateral relationships in zero-sum frameworks

Bilateral Ties

• Both governments should focus on the boosting trade which is standing at just $13.61 billion and dipped 6.21% to in 2016-17. This shows that bilateral trade is decreasing.
• There is scope in many areas for the improving trade and fourth industrial revolution can be a landmark in this regard.
• For instance, defying global protectionism trend, Japan has entered into agreements with EU, viz. EU – Japan Economic Partnership Agreement (EJEPA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force on February 1st 2019 and January 14th 2019 respectively. This shows that in the growing era of protectionism Japan can be hope for India.
• At the time of trade war when Trump is regularly attacking India, its relationship with Japan should be focused on the coalition.
• Last year, Japan gave a signal for the reviving of Trans-Pacific Partnership. This can be an opportunity for India in the boosting of its relations with Indo-Pacific countries.
• There are many other areas which are providing opportunities such as Africa continent, although India-Japan presented a joint venture namely Asia-Africa Growth Corridor for the grab the African opportunities.

On security paradigm

• India and Japan are victims of China's influence in their regions have many issues with their securities setup.
• Both countries can be the best partner in their relative field. Although, India and Japan are the members of Quad and India invited Japan in Malabar Naval Exercise these are multi-country level ventures. Both counties should focus on their own security setup in their respective regions.
• India as a significant naval power with a dominant peninsular location astride shipping-lanes plays a major role in ensuring maritime security in the Indian Ocean and its environs.
• Close cooperation with a democratic India, located mid-way along trade-routes connecting East Asia with the Middle East and Africa, would be advantageous to Japan.
• At the same time, a technologically deficient India has much to gain from a relationship with a country like Japan.

Challenges

• The trade ties which have remained underdeveloped when compared to India’s trade ties with China. The bilateral trade between New Delhi and Tokyo in 2017-18 stood at a meagre $15.71 billion, whereas the Sino-Indian bilateral trade in 2017 stood at $84.44 billion in spite of the political tensions between India and China. 
• Defence sector: The two sides have also been unable to collaborate in the defence sector in spite of huge potential.
• Arms exports: India is one of the biggest arms importers in the world, while Japan, especially under Abe, has been looking at arms exports, though it still remains a very divisive issue within the country. 
• Balancing between Quad and Brics: India is a member of groups like the BRICS, which brings together Brazil, Russia, India, China, and South Africa. In addition, though New Delhi has not joined the China-led Belt and Road Initiative (BRI), it is a member of the AIIB (Asian Infrastructure Investment Bank).So India has to do a balancing act between Quad and Brics.
• Question mark on Quad: India has long adopted a non-aligned approach as opposed to the stauncher, pro-US foreign policy stances of Japan and Australia. The failure of these nations to come up with a joint statement points to an inherent struggle to reconcile their competing views on how best to counter the rise of China.
• Asia-Africa Growth Corridor (AAGC) project: there is a great deal of scepticism on the feasibility of the AAGC itself as well as the nature of the projects embedded in it.

What should be done?

• Quad cooperation: While it need not be institutionalised, it should work towards a roadmap with actionable items and show tangible results, such as by stepping up coordination in counter-terrorism, cyber security, and disaster relief.
• Containing China in India’s neighborhood: the two countries will be cooperating in the development of the East Container Terminal in the Colombo Port in Sri Lanka along with Sri Lanka’s Port Authority (SLPA), which is a different model of investment than the Hambantota Port in Sri Lanka, which has been leased by China.
• Defense cooperation: They are also engaged in discussions on the possibilities of India acquiring Japanese technology in the production of submarines and on cooperative research in areas like unmanned Ground Vehicle and Robotics
• Make in India: India’s purchase of Japan’s indigenously made US-2 amphibian aircraft if successfully executed, could also contribute to India’s ‘Make in India’ program.
• Cooperation in North-East: Japan’s involvement in infra-structure projects, particularly in the Northeast India, will further deepen and contribute to closer links with Southeast Asian countries. 
• Infrastructure projects: The smooth implementation of the prestigious high-speed rail project linking Ahmedabad and Mumbai will ensure the credibility of India’s investment climate.
• Asia-Africa Growth Corridor (AAGC) project: One important objective of the project is to bring about greater integration within the Indo-Pacific region by undertaking several infrastructure projects.
• Green technology: Being a developing country, pollution is a serious issue in major Indian cities. Japanese green technologies can help India tackle this threat.
• Stable Indo-Pacific: Indo-Japan should be realistic enough to understand that in any future regional strategic scenario, because of its economic and military strength, China will figure quite prominently so efforts should be done to keep the Indo-Pacific multipolar.

Road Ahead

• Japan has been very cooperative in India’s Make in India initiative so it will not be surprising to see the Japanese armament industry setting up manufacturing units in India.
• Technological Collaborations: There is huge potential as far as Make in India and defence deals are concerned. Joint ventures could be created by merging Japanese technology with Indian raw materials and labour.
• The India Japan 2+2 dialogue gives a whole new direction to India’s Act East Policy because it brings into focus mutual concerns about China’s push for unipolarity. 
• Closer cooperation is the best measure to combat China’s growing role in Asia and Indo-Pacific.
• Further strengthening of bilateral cooperation is in the mutual interest of both countries and would also help in furthering the cause of peace, security and prosperity in the Indo-Pacific region.