The earthquake in Fukushima in 2011 dragged Japan to backseat to ink the civil nuclear cooperation deal. The last visit by Prime Minister Narendra Modi to Japan seemed to have galvanized the negotiations on civil nuclear deal. Given the Japanese company Toshiba’s interests in setting up nuclear processing plant in Gujarat jointly with Westinghouse of USA and Japan’s increasing interest in India’s infrastructure, there is a good possibility of the nuclear deal being signed.

India’s interests for civil nuclear cooperation stem from the Japanese made high- tech components required for pressurized light water reactors (PWRs). India has planned to set up PWRs, imported from Russia, France, USA and Japan under its Public Sector organization, NPCIL. The PWRs sector is dependent on Japan for supply of some components, notably very large sized steel forgings as a part of the reactor pressure vessel. The hurdles to this deal emanated from Japan’s insistence that no reprocessing of fuel will be done in India.

The deal for manufacturing US 2 amphibious aircraft will probably be the first defence deal between India and Japan. The aircraft will help in surveillance, intelligence gathering and for rescue operations. The aircraft will be manufactured in India for domestic use as well as for export.

Chinese assertiveness in East Asia triggered Japan’s overwhelming support to India. The departure from the earlier stance on sole economic cooperation and extension to defence cooperation can be called a stepping stone of Japanese move for a new strategic partnership with India. Japan’s new defence guidelines in 2013 was the stimulus de-facto. The two strategic documents (National Security Strategy and National Defence Guidelines 2014), adopted under Prime Minister Shinzo Abe, identified a number of areas in which Japan would like to strengthen cooperation with India in the near future.

The new defence guidelines of Prime Minister Shinzo Abe recognized the primacy of India. It noted that “as a result of change in the balance of power due to development of countries such as China and India — multi-polarization of the international community is progressing”. As regards security cooperation with India, it stated that “Japan will strengthen its relationship with India in a broad range of fields, including maritime security, through joint training and exercises as well as joint implementation of international peace cooperation activities.” It sent a clear message of India’s importance in Japan’s defence strategies, not only covering maritime security, but also covering other aspects of Japan’s self-defence security.

In the economic cooperation also, China factor has evoked concern in Japan’s strategic economic partnership with India. The visit of Prime Minister Shinzo Abe to India and its overwhelming support for economic aid in infrastructure are likely to be factored by China’s rising competitiveness in infrastructure after Japan lost to China in bidding fast rail link in Indonesia last September. This will impart impact on Japan’s bid to set up bullet train between Ahmedabad and Mumbai. Japan offered 80 percent fund to set up the bullet train. China evinced interest to set up high-speed train in India. At present, it is conducting a feasibility study for 1,754 km Delhi- Chennai high speed rail corridor.

Japan lost to China to set up the first fast trail link project between Jakarta and Bandung. The main reason for the loss was China’s more easy terms of loan and transfer of technology. China offered US $ 5 billion loan without any Government guarantee. Japan and Germany insisted for government guarantee. Indonesia termed China’s offer as business-to-business cooperation rather than Government -to- Government cooperation. Analysts believed that the winner of this first fast rail project would be the frontrunner for future rail projects in Indonesia. It was seen as a severe blow to Prime Minister Shinzo Abe’s goal for overreaching Asian countries through infrastructure development. The loss to China back-lashed Japan’s over-optimism in its technology and aid prudence infrastructure projects in overseas. In a recent visit to Beijing, NITI Aayog Vice-Chairman Arvind Panagariya pleaded for a competitive soft-term finance from China, stirring up a debate that Japanese were providing incredibly attractive financial proposition.

From India side, escalating China –Japan spat unleashes greater opportunities to attract Japanese investment. Visit of Prime Minster Shinzo Abe is seen as an acceleration to this opportunity. Japan’s vie for Modi’s heart began after Japanese were looking for alternative destinations. Japan adopted China+1 strategy to divert investment from China. Japanese investors restricted their expansion in China and diverted to other South East Asian countries, such as in Singapore, Hong Kong and Taiwan for their expansion program. As a result, China witnessed a downturn in Japanese investment.

A new dimension in India- Japan relation with a comprehensive partnership in nuclear, defence and economy, particularly to set bullet train will act as a new stimulus to the Japanese investors after their initiatives in India dampened with the slow pace of DMIC project. Both sides will make all efforts to make a success of this visit taking into account the new imperative of both economy and geopolitics.