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India's Prime Minister Narendra Modi and Japan's Prime Minister Shinzo Abe are scheduled to come together for the Indo-Japan annual meet in Guwahati in December 2019. The meeting has been arranged in the side-lines of Abe visiting Manipur to pay tribute to the Japanese soldiers killed there during World War II. The two prime ministers are likely to visit the India Peace Memorial at Maibam Lotpa Ching in Bishnupur district following a visit to the Imphal Peace Museum to commemorate the platinum jubilee of the ‘Battle of Imphal’.

Last month, Defence Minister Rajnath Singh and External Affairs Minister S Jaishankar met Japan’s Foreign Minister Toshimitsu Motegi and Defence Minister Taro Konoon in New Delhi for the first India-Japan ‘two-plus-two’ foreign and defence ministerial meeting. According to experts, in a sign of growing closeness between the two nations, the two plus two dialogue and the upcoming summit can further strengthen the bilateral partnership and give the relationship a strategic edge. For India, this is the only other ‘two-plus-two’ meeting apart from that with the US, which clearly shows the importance that India assigns to the relationship with Japan.

In an era that has seen an increasingly assertive China, India and Japan will both increase their options by collaborating with each other. Stressing the importance of India-Japan relations, the statement released by the government after the ‘two-plus-two’ dialogue said, “The Prime Minister has noted that India’s relationship with Japan was a key component of our vision for Indo-Pacific for peace, stability and prosperity of the region, as well as a cornerstone of India’s Act East Policy.” Therefore, the focus of the visit will be projects in the Northeast in tune with India’s ‘Act East’ policy. Also, Modi and Abe are expected to sign the Acquisition and Cross-Servicing Agreement (ACSA), enabling both nations to share defence capabilities and supplies.

India is under tremendous pressure to boost its economy with the government hoping for massive investment and bilateral acquisition and cooperation in terms of market, technology, defence and infrastructure from countries like Japan and the US. In a surprising turn of events, Japan announced it would also not sign the Regional Comprehensive Economic Partnership (RCEP) if India was not going to do so. It has been reported in Japanese newspapers that during the summit, Abe will also bid to draw Modi back to RCEP. By all accounts, the summit is going to be a game changing event in India-Japan relations.

ACSA and the potential for ‘Make in India’

The ACSA would permit the Indian navy access to a Japanese base in Djibouti, while the Japan Maritime Self Defense Force (JMSDF) would be permitted to use India’s military installations on the Andaman and Nicobar Islands located in the Indian Ocean. The agreement is designed to strengthen bilateral security and defence cooperation between Japan and India amid China’s active maritime expansion.

Japan’s focus and budgets for the next 10 years for equipping in the context of increasing regional threats is an opportunity for many Indian companies, including the public sector, to work out a mutually-beneficial relationship. The earlier announced $12 billion ‘Japan-India Make-in-India Special Finance Facility’ fund is a good step to boost confidence. Reports also indicate that Japan has agreed to undertake a third of the amphibious Shinmawya US-2 Aircraft’s manufacture and this could be an important step towards boosting the ‘Make in India’ initiative. The potential for two-way cooperation in defence is tremendous and will likely help in reviving the ‘Make in India’ project of the Modi government.

Impact in the Indo-Pacific region and RCEP

Both India and Japan are confronting similar challenges in the Indo-Pacific region. Abe plans to call on Modi to reconsider his decision to withdraw from talks on the RCEP, a proposed free trade agreement that was set to involve 16 Asian and Oceanian countries. Certainly, the Japanese want India to assert its influence in the Indo-Pacific to contain China. Also, experts believe Tokyo would have never done something as significant as thinking to withdraw from RCEP negotiations without India involved, if its chief friend and ally, the United States, was not on board. To navigate the rise of China in the region, India and Japan have been taking part in the Malabar naval exercises along with the US and will focus to improve their relationship significantly, given their position in the Indo-Pacific region and ties with the US.

Even though domestic growth has dropped to 4.5% - the lowest in six years, Japan is pinning all its hope on India to play the big round against China. It is a risky bet which Tokyo is willing to play giving a window for New Delhi to ensure major investments and cooperation between the two countries on multiple fronts.