There was a paradigm shift in India- Japan relations from economy to defense. Never before defense gained prominence over economy. In the Joint Statement, the economic focuses were preceded by defense commitment. A new twist in the India - Japan relations was observed in the aftermath of Japan introducing new defense guidelines in December 2013. Under the guidelines, Japan identified a number of areas in which it would like to strengthen cooperation with India.

The era of India –Japan defense cooperation began with Mr. Modi’s first visit to Japan as Prime Minister in September 2014. The summit made a turnaround in the bilateral relation focusing on defense cooperation after Japan lifting the ban on six Indian entries, including HAL (Hindustan Aeronautical Limited) – the only Indian company producing Indian defense aircrafts – in the hope for selling US-2 amphibious planes. Thus, India became the first country in the world after World War II to acquire military systems from Japan.

Japan‘s pledge to cooperate with India for the development of Chabahar Port in Iran was seen another belligerent step to counter China’s support to Pakistan for expansion of Gwadar port in Pakistan. It is a part of CPEC (China Pakistan Economic Corridor) project. The Chabahar port will help India to bypass Pakistan in transporting goods to Afghanistan At present, Pakistan does not allow India to transport through its land and territory to Afghanistan. During the last visit of Mr Modi to Iran in May 2016, India signed agreement with Iran to develop Chabahar port. This will make a break through in India’s trade with West Asia.

As Prime Minster of India, Mr Modi tried to re-write a new chapter on India- Japan relations with a shift from strategic economic relation to global partnership. He reiterated that India and Japan were the two oldest democracies in Asia and were among the three biggest economies. He asserted that 21st Century is to be decided by Asian countries and India and Japan bilateral relations would be the engine for 21st Century growth. The Japanese commentators hailed Modi as “India’s Abe Mr Modi’s shift to woo Japanese investment from automobile to defense and development of smart cities will make a new vista for Japanese cooperation in India. India has raised FDI cap in defense from 26 percent to 49 percent under Mr. Modi’s Prime Minister-ship. Mr Modi’s yearn for Japanese technical cooperation in making US-2 amphibious aircraft in India, besides importing the aircraft from Japan, is a case in point to mark the shift from economy to defense.

Japanese Prime Minster Shinzo Abe’s ambitious target for doubling Japanese investment within 5 years and his commitment for US $ 35 billion for different infrastructure projects for 5 years bolstered Modi’s dream for “Make in India’. While welcoming Japanese investors, he ensured “red carpet minus red tape” in his last visit to Japan.

Japan’s vie for Modi‘s heart began with China’s aggressiveness for Asia hegemony. Visits of Japan’s Imperial couple Emperor Akihito and Empress Michiko to India (November 30 – December 5, 2013) after five decades, symbolizes Japanese bent towards India. The visits stirred up a surprise because the Imperial couple did not travel often overseas on state visits, given the fragile health due to old age. The visits unleashed a paradigm shift to a bipolarrelations, embracing economy and politics

Looking for alternative destinations for investment after China turned a risky investment destination – China+1 strategy became a common factor for Japanese overseas investment. The US-2 amphibious plane deal and the development of strategic defense cooperation through Defense Framework Agreement and Joint Working Group for defense equipment and cooperation usher a new Japanese investment template in India.

However, China’s intransigence to budge from anti-NSG stand seemed to have cast some shadows over India-China relation. Till that time, Mr Modi reiterated that China was not a foe. Mr Modi vowed to court Chinese investment to make his Make in India success. During the last visit of Indian Vice President Hamid Ansari to China accompanied by Indian Commerce Minister Nirmala Sitharaman , MOUs were signed with China for setting up four industrial parks in India with Chinese investment under the direction of Mr Modi.

Japan is the biggest donor to India. Japan’s ODA was the backbone of India’s infrastructure development, such as power, transport and environment related projects. Delhi Metro – a great relief to the Delhi people - is a marked breakthrough in Indian urban transport system. It was largely financed by Japanese ODA.

Japan has been one of the big foreign investors in India. During 2015-16 and the first six months of 2016-17, Japan was the third biggest investor in India. Japan made a landmark contribution for the development of modern automobile industry in India. It contributes 7.1 percent to the GDP of India. (IPA Service)