The article suggests recalibration of India’s approach towards political turmoil in Nepal.
Nepal in political crisis
For the second time in weeks, Prime Minister K P Oli has persuaded President Bidya Devi Bhandari to dissolve parliament and call for fresh elections.
That is, unless the Supreme Court decides to declare the dissolution of parliament as unconstitutional, as it had done in the recent past.
The current dissolution has been challenged in the court by five political parties.
Medhesi demand fulfilled
Prime Minister Oli has also delivered on the longstanding Madhesi demand to reverse a constitutional provision which denied citizenship to children born of Nepali mothers who had foreign husbands.
The widespread unrest in the Terai adjoining India in 2015 was triggered by this attempt to deny equal rights to the Madhesi population.
This provision had directly targeted the Madhesi population, which has close kinship and marital ties across the border with India.
While this provision has now been removed through a presidential ordinance, it could well be reversed in future by Nepali political parties dominated by the higher caste.
Steps India needs to take
Political uncertainty in a neighbouring country is never good news for India, particularly in Nepal with whom we share a long and open border.
The Indian government has maintained a studied silence on the current political developments in Nepal and this may be the right thing to do.
But this silence should not imply the lack of a proper assessment of the political situation in Nepal and what would serve the interests of India best.
Following are the steps India need to take:
1) India should declare it does not support the revival of monarchy
The abolition of the monarchy is a net gain for India and the government must firmly and unambiguously declare that it does not support the revival of the monarchy, which has already been rejected by its people.
India should declare its unconditional support to Nepal’s republican democracy.
2) Remain engaged with Nepal
India should remain fully engaged with Nepal at all levels and across the political spectrum.
The safeguarding of India’s vital interests demands such sustained engagement.
A hands-off policy will only create space for other external influences, some of which, like China, may prove to be hostile.
However, engagement must dispense with the recurrent tendency to label Nepali political leaders as friends or enemies.
India should advocate policies rather than persons.
3) Recognise the role of Madhesi population
In India’s engagement with Nepal, the Terai belt and its large Madhesi population plays a critical and indispensable role.
In an effort to win over the Kathmandu political and social elite, one should be careful not to neglect citizens living in the plains.
Our engagement with Nepal must find an important place for Nepali citizens who are our immediate neighbours and act as a kinship, cultural and religious bridge between our two countries.
4) Appreciate people-to-people link
India needs to appreciate that the people-to-people links between our two countries have an unmatched density and no other country, including China, enjoys this asset.
The challenge to our Nepal policy lies in leveraging this precious asset to ensure a stable and mutually-productive state-to-state relationship.
India has every reason to approach its relations with Nepal with confidence and assurance.
Consider the question “What are the factors that make India-Nepal relationship special? What are the recent challenges impacting this special relationship? ”
Conclusion
The safeguarding of India’s vital interests demands India’s engagement with Nepal without intervening in its politics. A hands-off policy will only create space for other external influences.
Bangladesh’s central bank has approved a $200 million currency swap facility to Sri Lanka.
Practice question for mains:
Q. What are Currency Swaps? Discuss the efficacy of Currency Swap Agreements for liberalizing bilateral trade.
What is a Currency Swap?
In this context, a currency swap is effectively a loan that Bangladesh will give to Sri Lanka in dollars, with an agreement that the debt will be repaid with interest in Sri Lankan rupees.
For Sri Lanka, this is cheaper than borrowing from the market, and a lifeline as is it struggles to maintain adequate forex reserves even as repayment of its external debts looms.
The period of the currency swap will be specified in the agreement.
A helping hand for SL
Bangladesh Bank, the central bank, has in principle approved a $200 million currency swap agreement with Sri Lanka.
Dhaka decided to extend the facility after a request by Sri Lankan PM Mahinda Rajapaksa to Bangladesh’s PM Sheikh Hasina.
It will help Colombo tide over its foreign exchange crisis, according to media reports from Bangladesh, quoting the bank’s spokesman.
Sri Lanka, staring at an external debt repayment schedule of $4.05 million this year, is in urgent need of foreign exchange.
An unusual move
Bangladesh has not been viewed so far as a provider of financial assistance to other countries.
It has been among the most impoverished countries of the world, and still receives billions of dollars in financial aid.
But over the last two decades, its economy has pulled itself up literally by the bootstraps, and in 2020, was the fastest growing in South Asia.
Bangladesh’s economy grew by 5.2 percent in 2020 and is expected to grow by 6.8 percent in 2021.
The country has managed to pull millions out of poverty. Its per capita income just overtook India’s.
A break in monopoly
This may be the first time that Bangladesh is extending a helping hand to another country, so this is a landmark of sorts.
It is also the first time that Sri Lanka is borrowing from a SAARC country other than India.
The presumption was that only India, as the regional group’s largest economy, could do this.
The Bangladesh-Sri Lanka arrangement shows that is no longer valid.
Why didn’t SL approach India?
Last year, it requested for a $1 billion credit swap, and separately, a moratorium on debts that the country has to repay to India.
But India-Sri Lanka relations have been tense over Colombo’s decision to cancel a valued container terminal project at Colombo Port.
India put off the decision, but Colombo no longer has the luxury of time.
Is SL in a crisis?
With the tourism industry destroyed since the 2019 Easter attacks, Sri Lanka had lost one of its top foreign exchange pullers even before the pandemic.
The tea and garment industries have also been hit by the pandemic affecting exports.
Remittances increased in 2020, but are not sufficient to pull Sri Lanka out of its crisis.
The country is already deep in debt to China. According to media reports, Sri Lanka owes China up to $5 billion.
What about the previous swap facility that India gave Sri Lanka?
Last July, the RBI did extend a $400 million credit swap facility to Sri Lanka, which the Central Bank of Sri Lanka settled in February. The arrangement was not extended.
RBI has a framework under which it can offer credit swap facilities to SAARC countries within an overall corpus of $2 billion.
According to RBI, the SAARC currency swap facility came into operation in November 2012 with the aim of providing to smaller countries in the region.
The article highlights the challenges in the success of a two-state solution to the Israel-Palestine conflict and suggests the one-state solution instead.
Background of the two-state solution
It involves dividing Palestine between the state of Israel and the indigenous population of Palestine.
It was first offered by the British in 1937 and rejected by the Palestinians already then.
In 1947 the United Nations insisted that the Palestinians should give half of their homeland to the settler movement of Zionism.
The two-state solution, offered for the first time by liberal Zionists and the United States in the 1980s, is seen by some Palestinians as the best way of ending of the occupation of the West Bank .
It will also lead to the partial fulfilment of the Palestinian right for self-determination and independence.
Interpretation of two-state solution
The Israeli interpretation, until 2009, was that the two-state solution is another means of having the territories, the West Bank and the Gaza Strip, without incorporating most of the people living there.
In order to ensure it, Israel partitioned the West Bank which is 20% of historical Palestine into a Jewish and an Arab part.
This was in the second phase of the Oslo Accords, known as the Oslo II agreement of 1995.
One area, called area C, which consists of 60% of the West Bank was directly ruled from 1995 until today by Israel.
Now, Israel is in the process of officially annexing this area.
40% of the West Bank, areas A and B under Oslo II, were put under the Palestinian Authority.
Palestinian Authority calls itself the state of Palestine, but in essence has no power whatsoever, unless the one given to it, and withdrawn from it, by Israel.
In 2018 a citizenship law was passed known as the nationality law.
As per the citizenship law, the Palestinian citizens who live in Israel proper which is Israel prior to the 1967 occupation of the West Bank and the Gaza Strip and who are supposedly equal citizens of the Jewish state, will in essence become the Africans of a new Israeli Jewish apartheid state.
Issues with two-state solution
The endless negotiation on the two-state solution was based on the formula that once the two states become a reality, Israel will stop these severe violations of the Palestinian civil and human rights.
But while the wait continued, more Palestinians were expelled and the Jewish settler community in the West Bank grew in size.
The two-state solution is not going to stop the ethnic cleansing; instead, talking about it provides Israel international immunity to continue it.
Way forward
The only alternative is to decolonise historical Palestine.
New state should a state for all its citizens all over the country, based on the dismantlement of colonialist institutions, fair redistribution of the country’s natural resources, compensation of the victims of the ethnic cleansing and allowing their repatriation.
Settlers and natives should together build a new state that is democratic, part of the Arab world and not against it, and an inspiration for the rest of the region.
Conclusion
The one-state solution is the way forward in Palestine and that should be the state for all citizens.
Lithuania has decided to quit China’s 17+1 cooperation forum with central and eastern European states that include other EU members, calling it “divisive”.
About 17+ 1 Forum
The forum is an abbreviation for Cooperation between China and Central and Eastern European Countries.
It is an initiative by the Chinese Ministry of Foreign Affairs to promote business and investment relations between China and 16 countries of CEE (CEEC).
The countries are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Greece, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.
The format was founded in 2012 in Warsaw to push for the cooperation of the “17+1” (the 17 CEE countries and China).
Its goals are to promote the Chinese Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation, and logistics, trade and investment”.
The artcle highlights the role played by the progressive section in the US politics in influencing U.S. governments decision on TRIPS waiver and providing aid to India. Incidentally, these progressives include names such as Pramila Jayapal whose comment on human rights violations in Jammu and Kashmir had annoyed India.
What led to change in U.S.’s approach on aid
There was a shift in the U.S.’s approach on providing COVID-19-related aid to India as well as on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver on COVID-19 vaccines.
It is tempting to surmise the shift as being driven by the Comprehensive Global Strategic Partnership with New Delhi.
But it is more than just that.
The development was a result of the determined push by some sections of the political and business class, civil society, and Indian Americans.
Besides them, the progressives in the Democratic Party made a big difference.
Role of the progressives
Days ahead of the May 5 decision of the Biden administration on the TRIPS waiver, 110 members of the U.S. Congress wrote to President Biden urging him to support the waiver.
Thus, the Biden administration’s decision on the waiver and the vaccines, characterised as courageous by many, was a result of the push by the progressives.
Joining in this effort, the co-chair of the Congressional India Caucus, and over 50 colleagues wrote last week to President Biden seeking supply of specific items.
The overall approach is to work with India in its battle against the second wave and prepare for subsequent ones.
Conclusion
It is evident that the progressives have a grip on policymaking. India will have to remain engaged with this section instead of offering a cold shoulder as it did in the recent past. As the adage goes, all politics is local.
Recently India’s permanent representative to the UN made a carefully crafted statement at the UN Security Council “open debate” on the escalating Israel-Palestine violence.
The violence started on 6 May, when Palestinian protests began in Jerusalem over an anticipated decision of the Supreme Court of Israel on the eviction of six Palestinian families a neighbourhood of occupied East Jerusalem.
Israel’s operation “Guardian of the Walls” began with attacks on Hamas (a fundamentalist Palestinian group) tunnels close to the border fence with Israel.
India has adopted a balanced approach to the current Israeli-Palestine conflict that has pushed the volatile region into yet another cycle of violence.
India’s long-standing position
India has since long been maintaining that the Israel-Palestine conflict should be resolved through negotiation resulting in sovereign, independent, viable and united State of Palestine, with East Jerusalem as its capital.
India has urged both countries to “engage with each other, including on the recent proposals put forward by the United States, and find an acceptable two-state solution for peaceful coexistence”.
The dilemma
India seems to strive to maintain a balance between India’s historic ties with Palestine and its blossoming relations with Israel.
The request that both sides refrain from “attempts to unilaterally change the existing status quo including in East Jerusalem and its neighbourhoods” seems to be a message to Israel about its settler policy.
The statement was also emphatic that “the historic status quo at the holy places of Jerusalem including the Haraml al-Sharif/Temple Mount must be respected”.
Ties with spikes
India’s policy on the longest-running conflict in the world has gone from being unequivocally pro-Palestine for the first four decades, to a tense balancing act with its three-decade-old friendly ties with Israel.
In recent years, India’s position has also been perceived as pro-Israel.
From Nehru to Rao
The balancing began with India’s decision to normalize ties with Israel in 1992, which came against the backdrop of the break-up of the Soviet Union.
There were massive shifts in the geopolitics of West Asia on account of the first Gulf War in 1990.
That year, the Palestinian Liberation Organisation (PLO) lost much of its clout in the Arab world by siding with Iraq and Saddam Hussein in the occupation of Kuwait.
The opening of an Indian embassy in Tel Aviv in January 1992 marked an end to four decades of giving Israel the cold shoulder, as India’s recognition of Israel in 1950 had been minus full diplomatic ties.
PM Nehru’s reasoning for the decision to recognise Israel was that it was “an established fact”, and that not doing so would create bitterness between two UN members.
Why did India then support Palestine?
In 1948, India was the only non-Arab-state among 13 countries that voted against the UN partition plan of Palestine in the General Assembly that led to the creation of Israel.
Scholars ascribe various reasons for this India’s own Partition along religious lines; as a new nation that had just thrown off its colonial yoke; solidarity with the Palestinian people who would be dispossessed; and to ward off Pakistan’s plan to isolate India over Kashmir.
Later, India’s energy dependence on the Arab countries also became a factor, as did the sentiments of India’s own Muslim citizens.
India and Palestine
The relationship with Palestine was almost an article of faith in Indian foreign policy for over four decades.
At the 53rd UN session, India co-sponsored the draft resolution on the right of the Palestinians to self-determination.
In the 1967 and 1973 wars, India lashed out at Israel as the aggressor.
In the 1970s, India rallied behind the PLO and its leader as the sole and legitimate representative of the Palestinian people.
In 1975, India became the first non-Arab country to recognise the PLO as the sole representative of the Palestinian people and invited it to open an office in Delhi.
In 1988, when the PLO declared an independent state of Palestine with its capital in East Jerusalem, India granted recognition immediately.
Continuity for the cause
India voted in favour of the UN General Assembly resolution in October 2003 against Israel’s construction of a separation wall.
It voted for Palestine to become a full member of UNESCO in 2011, and a year later, co-sponsored the UNGA resolution that enabled Palestine to become a “non-member” observer state at the UN without voting rights.
India also supported the installation of the Palestinian flag on the UN premises in September 2015.
Changes after 2014
For two-and-a-half decades from 1992, the India-Israel relationship continued to grow, mostly through defence deals, and in sectors such as science and technology and agriculture.
But India never acknowledged the relationship fully.
There were few high-profile visits, and they all took place when the PM Vajpayee was in office.
Israel was perceived as an ideal of a “strong state” that deals “firmly” with “terrorists”.
It was during NDA-2 that the government under PM Modi decided to take full ownership of the relationship with Israel.
Balancing act
Meanwhile, India continues to improve ties with Arab countries, especially Saudi Arabia and the UAE and feels vindicated by the decision of some Arab states to improve ties with Israel.
For instance, even as it abstained at UNESCO in December 2017, India voted in favour of a resolution in the UNGA opposing Trump’s recognition of Jerusalem as the Israeli capital.
The article explains the implications of China’s assertive foreign policy for India’s neighbours.
Chinese warning to Bangladesh
The Chinese ambassador to Bangladesh warned Bangladesh against joining the Quad and added that it will risk “significant damage” to its relationship with Beijing if it warms up to the Quad.
This came as a surprise as China was warning Bangladesh against joining a club that has no plans to invite new members, let alone Bangladesh.
China always used tough language when it came to issues of its sovereignty and territorial integrity.
The aggressive style now covers a much broader range of issues.
Beijing is conscious that Bangladesh’s impressive economic performance in recent years as well as its location at the top of the Bay of Bengal littoral lends a new strategic salience to Bangladesh.
China notes India’s growing diplomatic investment in developing a strategic partnership with Bangladesh.
China is also not blind to the emerging interest in US and Japan to expand cooperation with Dhaka.
Bangladesh, which supports China’s Belt and Road Initiative, is open to similar infrastructure cooperation with the US, Japan and India.
China’s wolf worrier diplomacy
The new wolf warrior diplomacy confronts head-on any criticism of China in the public sphere.
India has been at the receiving end of this policy for a while — especially during the recent crises of Doklam and Ladakh.
But India’s South Asian neighbours, all of whom enjoy good relations with China, are only now getting a taste of Beijing’s new diplomatic medicine.
Chinese Ambassador’s public remarks about the Quad were about telling Bangladesh to resist any Indo-Pacific temptation.
Pre-emption is very much part of Beijing’s strategic culture.
What such assertive diplomacy mean for South Asia
Delhi has learnt after long that too much diplomatic interference in the Subcontinent has tended to undermine the pursuit of India’s regional objectives.
China, as the world’s newest superpower, probably bets that its substantive leverages — including economic, diplomatic, and military — will limit the costs while deterring smaller nations from crossing the markers that it lays down.
South Asian elites have always seethed at India meddling in their internal affairs; they have held up China’s non-interventionist policy as a welcome alternative.
The controversy in Bangladesh over China’s remark on joining Quad should help update their past images of Beijing
India is now more circumspect than before about interventions in the region.
It recognises that avoiding knee-jerk interventions is a sensible policy.
Our neighbours have always complained about India’s inefficiency in implementing economic projects and contrasted this with China’s speed and purposefulness.
But they are also discovering the flip side of Chinese economic efficiency — the capacity to set and implement terms of cooperation that are not always in favour of the host nation.
All the regimes in the region have had access to different sections of the Indian elite and some capacity to shape the discourse on neighbourhood policies.
They have no political recourse at all in China’s closed political system.
Consider the question “As Beijing becomes ever more assertive in South Asia, the costs of relying on China are likely to become more apparent to South Asia’s smaller nations. Comment.”
Conclusion
Until now, Chinese support against India seemed free of cost. As Beijing becomes ever more assertive in South Asia, the costs of relying on China are likely to become more apparent.
The article highlights the unprecedented engagement among the countries of West Asia even among the rivals and explains its significance.
New diplomatic engagements in West Asia
Recently, there have been interactions between senior Saudi and Iranian officials, the first since diplomatic ties were broken in January 2016.
Following the removal of the diplomatic and economic blockade on Qatar that was imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, Doha has made efforts to mend ties with both Saudi Arabia and Egypt, in tandem with similar initiatives of its doctrinal and political ally, Turkey.
On May 5, Turkey and Egypt had their first diplomatic meeting in Cairo after they had broken diplomatic ties in 2013.
The two countries, on opposite sides on almost all regional issues, are now exploring how to address their differences.
Driving force behind these engagements
The driving force behind these unprecedented engagements is the advent of the Biden administration at the helm of politics in the United States.
He has taken a tough line on Saudi Arabia, scrutinising its human rights record and opposition to the war in Yemen.
Besides concerns in West Asian capitals, the broader message is that the U.S. is now likely to be less engaged with the region’s quarrels.
These signals of new U.S. policies have occurred even as the novel coronavirus pandemic is devastating West Asia.
Finally, one major factor is the recognition that the ongoing regional conflicts, in Syria, Yemen and Libya, despite the massive death and destruction, have yielded no military outcome and now demand fresh diplomatic approaches.
Long way to go in resolving differences
Egypt remains uneasy about Turkey’s ties with the Brotherhood and its regional ambitions.
Saudi Arabia has similar concerns about Turkey’s doctrinal affiliations and its relations with Iran.
There are difficulties in reshaping Saudi-Iran relations as well.
Iran may ease the pressure on the kingdom in Yemen and gradually yield ground in Iraq.
However, Syria will test their diplomatic skills as they explore how to accommodate their competing strategic interests in that devastated country.
Historic period for West Asian diplomacy
This is truly a historic period for West Asian diplomacy.
The major states are displaying unprecedented self-confidence in pursuing initiatives without the involvement of western powers that have dominated regional affairs for at least a couple of centuries.
This has left a pervasive sense of insecurity across West Asia and made the countries dependent on western alliances to ensure their interests.
This has left a pervasive sense of insecurity across West Asia and made the countries dependent on western alliances to ensure their interests.
Role for India
Given that regional contentions are inter-connected, third-party facilitators will be needed to promote mutual confidence and prepare the ground for a comprehensive regional security arrangement.
This will bring together regional and external states with a stake in West Asia security.
This arrangement will have provisions for participating states to uphold regional peace and promote mutually beneficial cooperation in energy, economic and logistical connectivity areas.
Given its close ties with all the regional states, India is well-placed to build an association of like-minded states — Japan, Russia, South Korea — to shape and pursue such an initiative for West Asian peace.
Conclusion
These new diplomatic engagements with erstwhile rivals could in time overturn existing regional alignments and possibly end ongoing conflicts.
Iran gave the Farzad B gas field to a domestic gas producer in a setback move to India.
Farzad B Gas Field
Farzad-B is an off-shore natural gas field 20 kilometres off Farsi Island in Iran.
The gas field was discovered in 2008 by a consortium of three Indian companies, led by the state-owned ONGC Videsh with a 40% stake; the other companies were Indian Oil Corporation (40%) and Oil India (20%).
Deal soured after US sanctions
Negotiations between the consortium and the National Iranian Oil Company (NIOC) to develop the gas field stalled due to secondary sanctions against Iran by the US and the European Union in the early 2010s.
Following the lifting of sanctions after the Joint Comprehensive Plan of Action was signed in July 2015 the consortium was close to an agreement to invest $US5 billion to develop the gas field.
After the United States withdrawal from the JCPOA in May 2018, and the reinstatement of U.S. sanctions against Iran, the negotiations between the consortium and NIOC broke down.
Consider the question “Balancing the contrasts has been the basis of India’s relations with Iran. Comment.”
India’s growing economic strength in recent years has seen it adapting its foreign policy to increase its global influence and status and to meet the challenges of the 21st century. In the past few years, New Delhi has expanded its strategic vision, most noticeably in Asia, and has broadened the definition of its security interests. As a result, India-Japan relations have undergone a paradigmatic shift which has seen an attempt to build a strategic and global partnership between the two countries.
Background
Prehistoric relations
India’s earliest documented direct contact with Japan was with the Todai-ji Temple in Nara, where the consecration or eye-opening of the towering statue of Lord Buddha was performed by an Indian monk, Bodhisena, in 752 AD.
Hinduism In Japan
Japan has indirect connection with Hinduism as four of the seven gods of fortune originated from Hindu deities named: a) Benzaiten Sama (Sarasvati). b) Bishamon (Vaiśravaṇa or Kubera). c) Daikokuten (Mahākāla/Shiva). d) Kichijōten (Lakshmi) Other examples of Hindu influence on Japan include the belief of “six schools” or “six doctrines” as well as use of Yoga and pagodas.
Buddhism
Buddhism has been practiced in Japan since its official introduction in 552 CE.
The Indian monk Bodhisena arrived in Japan in 736 to spread Buddhism and performed eye-opening of the Great Buddha built in Tōdai-ji.
Ancient records from the now-destroyed library at Nalanda University in India describe scholars and pupils who attended the school from Japan. One of the most famous Japanese travellers to the Indian subcontinent was Tenjiku Tokubei (1612–1692).
Pre-World War-2 era – Rising Japan and Admiring India
In the rise of Japan from the late 19th century onwards, other Asian nations including India saw the promise of their own revival, hailing both the speed as well as content of Japan’s transformation.
The victory of Japan over Czarist Russia in 1904 and its skill in modern warfare stimulated nationalist movements in Asia against the colonial powers.
It put new confidence in the Indian National Congress of being able to wage and win the struggle against British rule in India.
When the Indian freedom struggle entered the swadeshi phase, Japan was seen as a source of new equipment and machines to increase the supply of home-made goods and displace foreign, mostly British, goods.
Trade links have existed between the two countries for more than a century. India replaced China as Japan’s main market in 1915, and retained that position until 1925 with cotton goods contributing the most to Japanese exports to India.
Independent India and Japan
Following WWII, during which Indian troops under the British Empire fought Japanese troops and Indians under the Indian National Army, fought the British with Japanese support.
India played a limited role in the Allied Occupation of Japan from 1945 to 1952.
Justice Radha Binod Pal was the lone dissenting voice on the war crimes tribunal set up to try Japanese war criminals, including Prime Minister Hideki Tojo.
Once India became independent, it expressed support for Japanese interests; its delegation at the Far Eastern Commission, for example, was sympathetic to Japanese concerns about rebuilding their nation and to encouraging Japanese industry and finance.
In 1949, the Indian delegation stopped pressing the question in the Commission regarding its share of reparations from Japan and proposed halting the reparations altogether, noting that the burden of making such payments told heavily on the living standards of the Japanese people.
India welcomed the relaxation of controls on Japan because of the flow of Japanese technical expertise to the rest of Asia.
Although 52 nations assembled to sign a peace treaty with Japan at San Francisco in September 1951, India did not participate because of its belief that the Japanese Peace settlement was part of the Cold War and the principal parties to it were more interested in enlisting support for their respective positions than to bringing peace to Asia.
The Japanese public responded favourably to India’s stand, particularly its opposition to linking the peace treaty with a bilateral security arrangement.
Given the high esteem in which India, and particularly Nehru, was held by most Japanese in those years, there was an appreciation that India had raised its voice and expressed dissatisfaction with the terms of the treaty in so far as they concerned the prospects for peace in Asia.
(Monument honouring Radhabinod Pal, at Tokyo’s Yasukuni Shrine, Japan)
The cold war and Indo-Japan Relations
Indo-Japanese political connections remained weak despite the exchange of ambassadors, mutual visits by goodwill groups and parliamentary delegations. India received its first Overseas Development Assistance (ODA) in 1958.
On specific international questions such as the Sino-Indian border conflict and the India-Pakistan wars, Japan showed no overt interest either in lending support to India or in opposing it.
The Japanese consciously treated India and Pakistan evenhandedly, participating in their economic development programmes without getting drawn into their disputes.
During the India-Pakistan conflict, Japan’s diplomatic moves in the UN were not necessarily hostile to India, but its action on the aid front could be interpreted thus.
Soon after the US suspended its aid to India, Japan also enforced an embargo on flow of credits and all fresh loans.
Despite the initial enthusiasm and high hopes of the 1950s, the Indo-Japan relationship failed to take off politically and the relationship was essentially dormant from the 1960s to the 1980s.
Nevertheless, during the Cold War period Japan became the largest bilateral donor to India. Thus, the relationship was primarily sustained by Japanese ODA.
Post cold war relations
The end of cold war and the collapse of the Soviet Union, and the inauguration of economic reforms in India seemed to mark the beginning of a new era in Indo-Japanese relationship.
India’s “Look East Policy” posited Japan as a key partner.
Japan being the only victim of nuclear holocaust, Pokhran –II tests of India in May 1998 brought bitterness in the bilateral relations where Japan asked India to sign NNPT.
Tokyo’s relation with India showed signs of an upswing when Prime Minister Yoshiro Mori came on an official 5 day visit to India in August 2000.
Keeping aside the sanctions due to nuclear tests a new global partnership over issues of worldwide importance was envisaged.
Areas of cooperation
Economic
Special economic partnership initiative (SEPI) was signed during PM Manmohan Singh’s visit in 2006.
The main elements of SEPI include Dedicated Freight Corridor-West (DFC-W) project, Delhi- Mumbai Industrial Corridor (DMIC) project, setting up of multi-product special economic zones/cluster, free trade and warehousing zones at select locations, and encouraging investment by Japanese companies in India, including through assistance in development of infrastructure relating to SEZs and industrial estates, etc.
ODA is being provided to infrastructural sectors like telecommunication, transport, Yamuna action plan and other projects in the power sector.
India and Japan has formed the Act East Forum wherein ODA is being provided for the development of north eastern states.
India and Japan are cooperating in smart community projects such as seawater desalinization project in Gujarat (Dahej), the model solar project in Rajasthan (Neemrana) and the gas fired independent power producer (IPP) project in Maharashtra.
The 1st India-Japan Ministerial-level Economic Dialogue was held at New Delhi on 30 April 2012. Economic interaction is the fundamental driver of the India- Japan relationship. India continues to be the largest recipient of Japanese Official Development Assistance (ODA). Disbursement of ODA in FY 2011-12 reached a record high of Yen 139.22 billion (approx. Rs 8497 crores). This is being utilized in several important projects across India, largely in infrastructure projects such as Metro rail projects in different metropolitan cities.
Japan also announced ODA loans totalling Yen 184.81 billion (approx. Rs 11,000 crores) to two projects, namely the Dedicated Freight Corridor Western Project Phase II and the Chennai Metro Rail Project.
The flagship India-Japan infrastructure projects made steady progress in 2012. The Dedicated Freight Corridor (West) between Mumbai and Delhi is on track for completion in 2017, during the current Plan Period. The Delhi Mumbai Industrial Corridor (DMIC) Project has moved ahead with the Cabinet approving a 26% equity stake in the Special Purpose Vehicle DMIC Development Corporation (DMICDC) by the Japan Bank for International Cooperation (JBIC) on 23 August 2012.
Trade
There is Japan India strategic dialogue on economic issues which reviews the current status of bilateral economic issues from time to time.
CEPA being one of the most comprehensive of all such agreements concluded by India as it covers more than 90% of the trade , vast gamut of services, rules of origin, investment, intellectual property rights, customs and other trade related issues.
In 2012-2013 India-Japan bilateral trade touched US$ 18.6 billion.
RBI and Bank of Japan signed a 3 year bilateral swap agreement (BSA) amounting to USD 50 Billion for addressing short term liquidity issues, financial market stability as well as supporting bilateral trade.
The two countries have reaffirmed their commitment to cooperate in the commercial production of the rare earths by the Indian and Japanese enterprises.
Avoidance of double taxation and the prevention of physical evasion with respect to taxes on income were signed between India and Japan.
Investment
Japan is currently ranked sixth in the foreign direct investment (FDI) flows to India.
A total of US$ 4.63 billion was invested by Japanese companies in India between 2000-2010.
Japan Plus was established by the government of India in October 2014 to further enhance the investment and assist Japanese companies in India.
3.5 trillion Yen of public and private financing to India in 5 years under the Japan-India Investment Promotion Partnership.
Japan is also financing bullet train project between Mumbai and Ahemdabad.
Security and Defense
The two nations have frequently held joint military exercises and co-operate on technology. India and Japan concluded a security pact on 22 October 2008.
Formed in 2007 and revived in 2017 The Quadrilateral Security Dialogue (QSD, also known as the Quad) is an informal strategic dialogue between the United States, Japan, Australia and India.
The dialogue was paralleled by joint military exercises of an unprecedented scale, titled Exercise Malabar. The diplomatic and military arrangement was widely viewed as a response to increased Chinese economic and military power.
Japan India maritime exercise (JIMEX) was conducted off Japanese coast in January 2012.
Indian Navy participated in the JMSDF fleet review 2015.
Strategic
After the cold war Japan looked out to extend its diplomatic options beyond US and India became the best option possible.
In addition being a big economic giant, there similar democratic political systems, non western societies, desire to gain permanent seats in the UN Security Council and security environments are all the factors two countries can use to build a strong strategic alliance.
2+2 dialogue is taking place between the foreign and defense ministers of the two countries to deepen the global partnership.
It is also agreed to establish the INDIA –JAPAN – UNITED STATES trilateral dialogue on regional and global issues of shared interest.
Both countries also reiterated their determination to work together under the United Nations framework convention on climate change (UNFCCC), WTO.
Japan and India are working together to realize the reform of Security Council at the earliest.
There is a beginning of India-Japan-Australia trilateral dialogue to evolve an open, inclusive, stable and transparent economic, political and security architecture in the indo-pacific region.
Cultural
The two nations announced 2007, the 50th anniversary year of Indo-Japan Cultural Agreement, as the Indo-Japan Friendship and Tourism-Promotion Year, holding cultural events in both the countries.
One such cultural event is the annual Namaste India Festival, which started in Japan over twenty years ago and is now the largest festival of its kind in the world.
At the 2016 festival, representatives from Onagawa town performed, as a sign of appreciation for the support the town received from the Indian Government during the Great East Japan Earthquake.
On 10 April 2006, a Japanese delegation proposed to raise funds and provide other support for rebuilding the world-famous ancient Nalanda University, an ancient Buddhist centre of learning in Bihar, into a major international institution of education.
Energy
The two sides in 2015 reached an agreement on cooperation in the peaceful uses of Nuclear energy. India became the first Non proliferation country to do so.
India rare Earths Limited (IREL) and the Toyotsu Rare Earths India (TREI) a subsidiary of Toyota-Tsusho Corporation (TTC) , Japan has an agreement of supply of mixed rare earth chloride.
Issues
1. Hindrances in trade/ Investment relations
Though India and Japan have come a long way in their economic cooperation, that still is a penny when compared to the China-Japan economic ties.
Compared to the US$ 300 billion trade with China, India-Japan trade still languishes at mere US$15 billion.
Japanese investors lament lack of clarity in the policy guidelines, labor laws, tax laws, legal and regulatory framework.
For Japanese corporations some other inhibiting factors are differences in business practices, environment and culture etc.
2. Limited Defense cooperation
India and Japan defense relations after multiple defense exercises and agreements are primarily focused and revolve around China.
Japan does not give major importance to India when it comes to Indo-China border issues or Indo-Pak border conflicts.
There is hardly any exchange or procurement of defense equipment or technology from Japan.
3. 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.
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.
4. 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.
Way Forward
1) Continuation of balancing security policy
First, one can expect a continuation of the balancing security policy against China that began in 2014.
Crucially, India’s clashes with China in Galwan have turned public opinion in favour of a more confrontational China policy.
In just a decade, both countries have expanded high-level ministerial and bureaucratic contacts, conducted joint military exercises and concluded military pacts such as the Acquisition and Cross-Servicing Agreement (ACSA) logistics agreement.
Both countries need to affirm support for a Free and Open Indo-Pacific and continued willingness to work with the Quad.
Both countries need to take stock of the state of play in the security relationship while also pushing the envelope on the still nascent cooperation on defence technology and exports.
2) Expanding cooperation in various sectors
The two powers will look to expand cooperation in sectors such as cybersecurity and emerging technologies.
Digital research and innovation partnership in technologies from AI and 5G to the Internet of Things and space research has increased between the two countries in the recent past.
There is a need to deepen cooperation between research institutes and expand funding in light of China’s aforementioned technology investment programme.
Issues of India’s insistence on data localisation and reluctance to accede to global cybersecurity agreements such as the Budapest Convention needs to be discussed.
Defense ties need to be made more stable. There should be more exchange of defense equipment and technologies.
Focus must just not be on countering China but helping each other in every state and frame.
3) Economic ties
Economic ties and infrastructure development are likely to be top drawer items on the agendas of New Delhi and Tokyo.
Though Japan has poured in around $34 billion in investments into the Indian economy, Japan is only India’s 12th largest trading partner.
Trade volumes between the two stand at just a fifth of the value of India-China bilateral trade.
India-Japan summit will likely reaffirm Japan’s support for key manufacturing initiatives such as ‘Make in India’ and the Japan Industrial Townships.
Further, India will be keen to secure continued infrastructure investments in the strategically vital connectivity projects currently under way in the Northeast and the Andaman and Nicobar Islands.
4) Joint strategy toward key third countries
In years past, India and Japan have collaborated to build infrastructure in Iran and Africa.
Both countries have provided vital aid to Myanmar and Sri Lanka and hammer out a common Association of Southeast Asian Nations outreach policy in an attempt to counter China’s growing influence in these corners of the globe.
However, unlike previous summits, the time has come for India and Japan to take a hard look at reports suggesting that joint infrastructure projects in Africa and Iran have stalled with substantial cost overruns.
Tokyo will also likely try to get New Delhi to reverse its decision not to join the Regional Comprehensive Economic Partnership.
5) Nuclear cooperation
Both the countries must work to begin the exchange of nuclear fuel for the energy sector that has been stopped after the Fukushima incident.
And not just that, other energy cooperation and agreements must be signed to increase the flow of fuel and equipment for the benefit of the energy and other sectors related to nuclear energy.
