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India-Japan Cooperation on Chabahar Could be a Game-Changer for Asia

Collaborating with Tokyo on the port project could serve as a springboard for New Delhi to develop credible partnerships with external stakeholders, and elevate its political and economic profile in the region.

Prime Minister Narendra Modi’s recent visit to Iran drew a great deal of interest, largely on account of the tripartite agreement for the development of the Chabahar port, a deal that lay in waiting for over a decade. For India, the collaborative venture with Iran and Afghanistan would not only boost its economic ambitions in Afghanistan and Central Asia, but also circumvent Pakistan in regional trade activities and counter its China-operated Gwadar port. What received less attention post the agreement, however, was Japan’s offer to develop the port with India.

According to media reports, Tokyo seemed eager to partner with New Delhi in a composite infrastructure project at Chabahar, including the construction of a port and an industrial complex. Apparently, so keen is Tokyo to build stronger ties with Tehran that Japanese Prime Minister Shinzo Abe hopes to finalise a deal on the port, among other infrastructure projects, during a planned visit to the Iranian capital later this year.

Japan’s desire to participate in the project stems not only from its need to protect its energy interests in West Asia, but also from its desire to chart a course in the region independent of the US. In recent years, Japanese policymakers have emphasised Tokyo’s geopolitical stakes in West Asia and the importance of strengthening its profile beyond the Asia Pacific. From an Indian vantage point, collaboration between New Delhi and Tokyo on Chabahar could potentially reinforce the port project’s economic viability and strategic value. More importantly, however, the project could serve as a springboard for New Delhi to develop credible partnerships with external stakeholders, and elevate its political and economic profile in the region.

Dialogue between New Delhi and Tokyo on enhancing regional connectivity is not unprecedented. The expansion of the India-Japan partnership to the West Asian region finds context in the joint statement announced at the conclusion of Abe’s visit to New Delhi in December 2015. The two prime ministers decided to “develop and strengthen reliable, sustainable and resilient infrastructures that augment connectivity…between India and other countries in the region”. The statement also included references to “closer cooperation in safeguarding the global commons in maritime, space and cyber domains” as well as “partnership in combating terrorism, including through increased sharing of information and intelligence”.

Significantly, Japan has already been assisting India in the setting up of maritime infrastructure. Tokyo and New Delhi are in discussions for the installation of a 15-megawatt diesel power plant on the South Andaman Island and there is speculation that Japan might finance a chain of underwater surveillance sensors off the Andaman and Nicobar Islands.

Moreover, there has been a strengthening of bilateral naval ties in recent years. Japan is now a permanent member of the Malabar exercises, formerly a bilateral engagement between the Indian and American navies. The naval exercises jointly conducted between India, Japan and the US in the Philippines Sea in June 2016, are a reiteration of the extent of defence cooperation between New Delhi and Tokyo.

Pertinently, a growing convergence between the two key Asian maritime powers could impact the security architecture of the Indian Ocean Region. A Wall Street Journal article speculated that India, US and Japan were shaping a “new Asian maritime-security order…to contend with a more-assertive and well-armed China”. Co-development of the Chabahar port could, therefore, provide the foundation for more active roles for India and Japan in the Indian Ocean. Rising convergences in the economic, political and security realms make New Delhi and Tokyo natural partners in linking the scope of their cooperation to securing common interests in the Persian Gulf.

Japan’s own interests in West Asia are noteworthy. Like India, Japan is one of the prime exporters of hydrocarbons from the Persian Gulf. Its energy dependency on the Gulf accounts for 80% of its total hydrocarbon imports. Until the 1990s, Japan’s relations with the Gulf states remained largely restricted to the economic dimension. It was after the entry of other Asian competitors like China and India that Tokyo recognised the importance of strengthening ties with the oil producing monarchies. The shift in Japan’s West Asia policy after 2000 saw the country be more amenable to security cooperation with the Gulf states and concerns such as securing the sea lines of communication (SLOCs), piracy, terrorism and the Iranian nuclear issue topped the agenda.

Despite Japan’s hugely unpopular military foray into Iraq in 2004, Tokyo continues to attempt to carve a political space for itself in the region. Supplementing Tokyo’s unsuccessful efforts to join the Middle East Quartet, the Iran nuclear negotiations and the non-military fight against ISIS, Abe has displayed considerable diplomatic activism with visits to Turkey, Egypt, Israel, Palestine, Jordan, Kuwait, the UAE, Oman, Qatar, Saudi Arabia and Bahrain since 2012.

According to Japan’s energy policy of 2006, the country aims for greater resource security by embedding itself in the hydrocarbon infrastructure of major oil producing states. It seeks to achieve this through the development of oil fields and harbours to the account of 40% of its total imports by 2030. Sharing this common goal, collaboration between India and Japan can improve their terms of trade through better negotiating positions and strengthen their oil supply networks. For instance, as both countries look to ramp up their share of investment opportunities in Iran, Japan’s technical expertise can be leveraged to secure contracts for the development of oil fields. Japan is looking to develop the Azadegan oil fields, in which it held 10% stake until 2010, and India is vying for the contract to develop the Farzad B gas field.

Beyond the economic imperatives of trade and infrastructure, India-Japan cooperation could be a game-changer in the power dynamics of Asia. Together they can supplement efforts towards bolstering relations with West Asian states, improving the security of SLOCs and coordinating counter-terrorism operations. By taking engagement with key West Asian states beyond bilateralism, they can elevate the level of dialogue and expand strategic cooperation with regional and extra-regional powers.

Thus, countries with similar concerns and interests in the evolving security dynamics of the region can help India further its strategic outreach and challenge the buyer-seller notion that largely informs its West Asia policy. While other middle powers like South Korea and Australia also offer the potential for “minilateralism” in West Asia, Japan’s participation in the Chabahar port could give India the perfect launch pad for its Indian Ocean ambitions.

Kanchi Gupta is a researcher at the Observer Research Foundation.

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