Why Modi's Japan visit was a watershed

'After many rudderless years, India and Japan have prime ministers with a sense of purpose and direction,' says Brahma Chellaney.

Prime Minister Narendra Modi returned from Japan with notable gifts, especially a $35 billion Japanese assistance pledge that crowned a host of accords. But, like his predecessors, he will visit the White House bearing gifts, including a $2.5 billion contract for new military helicopters.

This, in a nutshell, explains why Modi's Japan visit was a watershed, cementing Asia's new democratic axis and co-opting Tokyo as an important partner in India's development and a collaborator on mutual security.

India and Japan are to cooperate on defence technology, maritime security and military preparedness, including on how to deter aggression and ensure a favourable balance of power in Asia.

For long, with major powers aggressively courting India to get a slice of its rapidly growing market, New Delhi measured success of its diplomacy by how many billions of dollars worth of contracts it doled out at a bilateral summit.

It made little effort reciprocally to secure lucrative contracts for Indian industry. As a consequence, India is the only major global economy that remains import-dependent, rather than being export-oriented, and thus relies largely on domestic consumption to fuel its economic growth.

Modi, however, is committed to change that by making India stronger and more robust by reviving slumbering economic growth. He knows there cannot be a better and more reliable partner in India's development than Japan, especially if his government is to significantly strengthen the country's manufacturing base, upgrade its rickety infrastructure, create a network of new 'smart' cities, and introduce bullet trains.

Japanese technology and investment can help make Modi's plans a reality. That is why Modi laid emphasis on his 'no red tape, only red carpet' message in Japan, saying he is striving to make India more hospitable for corporate activity. 'Some people say there is thick red tape in India, but I would like you to believe there is a red carpet in India,' he told Japanese businessmen.

Japanese Prime Minister Shinzo Abe's $35 billion pledge in private and public investment and financing over the next five years is indeed huge. This funding will be used to improve Indian manufacturing and skills, create 'smart cities' and electronics industrial parks, build high-speed rail lines and urban subways, clean up the Ganges, produce clean energy, and accelerate rural development.

But if this $35 billion assistance is to make a major difference, India must address its gaping current account deficit. India's monthly trade deficit is now running at $11.76 billion.

The massive trade imbalance with China, which has soared from $1 billion in 2002 to $30 billion in 2013, is at the root of India's serious current account deficit as the figure available for the most recent month (July) shows.

By importing raw materials from India but exporting finished products to it, China has effectively turned asymmetrical trade into an instrument to prevent India's rise as a peer competitor. China, India's largest source of imports, is also leveraging its trade and financial clout -- including its role as a major supplier of power and telecom equipment and its emergence as a lender to financially troubled Indian companies -- to dissuade New Delhi from assertively countering Chinese strategic encirclement.

Modi recognises that New Delhi must strategically collaborate with Tokyo to prevent the rise of a Sino-centric Asia, or else India's world-power aspirations will be stymied for good.

Asia's balance of power will be determined principally by events in two key regions: East Asia and the Indian Ocean. According to the 'Tokyo Declaration for India-Japan Special Strategic and Global Partnership' unveiled during Modi's visit, these two leading maritime democracies in Asia have agreed to 'upgrade and strengthen' their defence relations and work together on advancing security in Asia and the wider Indo-Pacific region, marked by the confluence of the Indian and Pacific Oceans.

As energy-poor countries heavily dependent on oil and gas imports, India and Japan are naturally concerned by China's mercantilist efforts to assert control over energy supplies and transport routes as well as by its claim to more than 80 per cent of the South China Sea, one of the world's busiest and most-strategic waterways.

China, in addition, has unilaterally established an air-defenve identification zone (ADIZ) covering territories that it claims (but does not control) in the East China Sea -- a dangerous new precedent in international relations.

Make no mistake: China's 'salami slicing' strategy involving the use of military intimidation or force to make furtive, incremental encroachments across land and sea borders has emerged as a key destabilising element in Asia.

Alluding to China, the Tokyo Declaration says India and Japan 'affirmed their shared commitment to maritime security, freedom of navigation and overflight, civil aviation safety, unimpeded lawful commerce, and peaceful settlement of disputes in accordance with international law.'

Modi was blunter, telling a Tokyo symposium: 'Everywhere around us, we see an 18th century expansionist mindset -- encroaching on another country, intruding in others' waters, invading other countries, and capturing territory.'

This prompted the Global Times -- a mouthpiece for China's rulers -- to editorially say that 'It is perhaps a fact that he (Modi) embraces some nationalist sentiments against China.'

The new Indo-Japanese axis is pivoted on a mutual recognition that such an alliance can potentially shape Asian geopolitics in much the same way as China's rise or America's 'pivot' to Asia.

Together, Japan and India can impose discreet checks on China's propensity to flex its muscles and to assert revanchist territorial and maritime claims.

Not surprisingly, Indian and Japanese strategic policies have started evolving in parallel.

Long used to practicing passive, checkbook diplomacy, Japan under Abe is now pursuing a strategy of 'pro-active contribution to peace' by looking beyond its security ties with the US and building strategic partnerships with militarily capable democracies in the Indo-Pacific region.

India, for its part, has progressed from doctrinaire nonalignment to geopolitical pragmatism, the hallmark of Modi's foreign policy.

After many rudderless years, India and Japan have a prime minister with a sense of purpose and direction. This has not only injected new-found energy in their foreign policy but also is aiding the return of economic confidence in the two countries.

Such a trend holds long-term strategic implications. For example, India's GDP growth in three years could potentially overtake that of China, which faces the specter of a slowing economy.

To be sure, Modi sees the United States as equally important to Indian economic and security interests. Eager to restore momentum to India's relationship with America, he has shaken off the visa-related humiliations heaped on him by Washington for over nine years and is scheduled to visit the White House on September 30.

The US has still not expressed regret for revoking his visa over unproven allegations that he connived in Hindu-Muslim riots in 2002, when he was chief minister of Gujarat. Yet Modi has decided to place national interest above personal umbrage.

Modi is also reaching out to Beijing in the hope that he can co-opt a cash-rich China as a partner in his mission to economically transform India. But this approach is not without significant risks: For China, trade and economic cooperation is about raking in profits, not about building political bridges. So, booming trade has been no hurdle to its increasing territorial assertiveness.

Yet Modi's overture appears predicated on the belief that growing economic engagement will make Beijing more amenable to a peaceful settlement of border and other disputes.

What makes India's relationship with Japan special is that it has none of the military and trade tensions that bedevil its ties with China or the political and commercial frictions that jar its relations with America. Between India and Japan, according to Modi, 'There is only goodwill and mutual admiration.'

Abe has gone to the extent of saying that Japan-India relations hold 'the greatest potential of any bilateral relationship anywhere in the world.'

With the economic and security interests of the two countries dovetailing nicely, the process to significantly tap that potential is to be accelerated. Modi urged Abe that the two countries should 'strive to achieve in the next five years their relationship's unrealised potential of the last five decades.'

He added that there are 'no limits' to cooperation between the two nations and that their actions will help shape the 21st century for Asia.

The Modi trip has helped cement the India-Japan alliance, with the Tokyo Declaration calling the visit's outcome 'the dawn of a new era' in relations between 'Asia's two largest and oldest democracies.'

This partnership will strengthen maritime security in the Indo-Pacific region -- the world's leading trade and energy seaway -- and shape a healthy and stable Asian power equilibrium, with India serving as the southern anchor and Japan the eastern anchor of this power balance.

Brahma Chellaney is a geostrategist and the author, most recently, of Water, Peace, and War (Oxford University Press, 2014).