Economics trumps geopolitics – Analysis – Eurasia Review


By Vivek Mishra

On his first bilateral visit, Japanese Prime Minister Kishida Fumio visited India at the start of a three-day tour through New Delhi and then Cambodia. During his meeting with Indian Prime Minister Narendra Modi, Kishida aimed to deepen relations with India and further promote bilateral relations, as 2022 marks the 70th anniversary of diplomatic relations between the two countries.

Japan holds India in high esteem, as India’s iron ore contributed to Japan’s post-war recovery and after the visit of then-Prime Minister Nobusuke Kishi to India, Japan granted loans to India, constituting its first program of Official Development Assistance (ODA).

More recently, Japan has been a strong partner for India in the East and a close multilateral partner in the Quad. Within the Quad, the bilateral relationship between India and Japan is apparently the strongest, with no long-standing disputes or political disagreements. India and Japan are among the largest donors to the greater Indo-Pacific, and both have strategic interests in a free and open region as well as a vested interest in containing Chinese hegemony.

However, the Japanese leader’s current trip may have had a larger purpose. The Ukrainian crisis has left a slight void in foreign policy choices. India and Japan have clearly taken different positions on the crisis, with Japan joining the United States, Australia and a host of Western countries in implementing sweeping economic sanctions against Russia, while India has resisted these efforts, adopting a cautious or neutral position in its relations with Moscow. Their disagreements over Ukraine represent the most significant political disagreements among Quad members. At an earlier meeting in February between Quad foreign ministers in Melbourne, India’s External Affairs Minister Subrahmanyam Jaishankar bluntly stated that “we are for something and not against anyone”, an approach different from that of Australian Marise Payne or Yoshimasa Hayashi from Japan.

While abroad, the two countries have called for an immediate end to the violence raging in Ukraine, as the Russian army continues the third week of its “special” operation. On the other hand, Kishida told the assembled reporters that democracies should ‘cooperate’ more, noting that Russian President Vladimir Putin’s aggression in Ukraine had ‘shaken the world order’, contrary to Modi’s more subdued emphasis. on economic cooperation. Kishida tried to gently pressure India, which has long-standing security and energy ties with Moscow, to align itself with other Quad partners in condemning Russian aggression. Unfortunately for Japan, the two leaders could only agree that a disruption of the international status quo would not be tolerated. Given its stance with Quad partners, India’s predicament couldn’t be more different than it was just a few weeks ago, when US State Department spokesman Ned Price said acknowledged and said “agree” with India’s “separate” relationship with Russia.

India’s recent energy relationship with Russia is at odds with the United States. New Delhi has considered a payment mechanism spread across local currencies to allow it to trade with Moscow, currently on its knees due to heavy economic sanctions. The Indian Oil Corporation recently bought three million barrels of Russian oil at a discount, while India as a whole could buy more than 15 million barrels this year. India’s central bank is considering a rupee-ruble deal with Moscow that would allow exports to Russia despite sanctions, a deal that would likely anger the rest of its Quad partners.

On the other hand, the tensions around Ukraine are only short-term concerns. India’s trade to Japan in 2020 exceeded $3 billion, while trade in the opposite direction was close to $8 billion. Japan, during the meeting with Prime Minister Modi on Saturday March 19, unveiled plans to boost Indian infrastructure investment, with more than $40 billion expected to flow into the country over the next five years, from investments in water supply, agriculture, health care, energy, and cybersecurity. Tokyo has in the past supported infrastructure projects in India, from urban development to high-speed train technologies. India needs these projects to stay competitive with China. For example, the Mumbai-Ahmedabad High-Speed ​​Rail (HSR) Corridor, being built with Japanese assistance, will connect Mumbai, India’s second most populous metropolitan area, to Ahmedabad. The 500 kilometer line will take no more than two hours between the two cities.

Perhaps all members of the Quad, including Japan, realize India’s unique position in the ongoing war between Ukraine and Russia, with the latter’s commercial and humanitarian concerns overlapping with both Russia and Ukraine. As such, the Japanese prime minister’s visit may have served his larger purpose – to prioritize geopolitical interests in the Indo-Pacific and bolster regional resolve. It was also an opportunity for the two countries to give continuity to the Quad’s resolve not to let a Ukraine-style crisis hit the Indo-Pacific and to build an economic and strategic bulwark against such a possible impact. Building a stronger economic arc in the Indo-Pacific between India and Japan has been an important goal of economic cooperation between the two countries. India and Japan have already reached the 3.5 trillion Japanese Yen (JPY) target under the 2014 Investment Promotion Partnership, and during the current visit, Japan has committed an additional investment of 5 trillion yen. It is a common realization that a more immediate focus on the Indo-Pacific economy will benefit both countries far more.

This commentary originally appeared in India Narrative.


About Author

Comments are closed.