Building Bridges, Building Trust: Japan and India Invest in Infrastructure

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China’s rise has made its neighbors uneasy. In recent years, China has dramatically expanded its armed forces, grown at an alarmingly fast rate, and expanded infrastructure deals such as CPEC to give itself a foothold beyond East Asia. As Beijing expands, India worries that it is being encircled by a ‘string of pearls,’ and Japan frets that it will lose control of their nearby waters and airspace. On August 3rd, Japan and India fired back with their own effort to expand and integrate themselves with the region: The Japan-India Coordination Forum and Asia Africa Growth Corridor. Tokyo and New Delhi are attempting to expand infrastructure in India’s remote North East and increase the amount of trade from East Asia through Africa. The goal is to develop an area of largely untapped economic potential, create transport corridors for regional trade with nearby nations, and expand India’s trade infrastructure. Cooperation between the democracies of Asia is not only a promising sign for sustainable development, but may substantially contribute the effort of counterbalancing the bellicose expansionism of China.

In order to appreciate the gravity of India’s growing cooperation with Japan it is important to understand the context of China’s growing influence in the region. In 2014, China launched its ‘One Belt One Road’ Initiative (OBOR). OBOR is designed to create a ‘second silk road’ by developing a vast array of maritime and land travel routes. One of the most notable projects is the China Pakistan Economic Corridor (CPEC), which links China’s landlocked western provinces to the sea by developing transportation and port infrastructure in Pakistan. China has already committed over 60 billion dollars in various payments and loans to CPEC alone.

India and Japan worry that OBOR is a front for China to expand its military. For instance, in Pakistan, recent leaks have suggested that China is reportedly considering using the Gwadar port (which is ostensibly being developed to increase its trade capacity) as a naval base. Once China has its economic foot in the door of the host nation, resisting their requests for military bases may be difficult. Even if Pakistan wanted to, having received billions of dollars for infrastructure through CPEC, they are not in a position to turn down Chinese requests. Given the revelations that China is not averse to using OBOR ports for military purposes, Chinese investments in port infrastructure in Sri Lanka, Myanmar, and other South Asian nations are viewed with suspicion by India.

The partnership between India and Japan is underpinned by a desire to increase economic growth. In the shadow of China’s behemoth of an economy, the other powers in the region need to stay competitive. Over the course of its rise, China has allocated more and more money towards the military, currently spending well over 100 billion dollars on defense. The more China is able to widen the gap between itself and its peers, the more its military will be able outstrip theirs. India and Japan understandably worry that as China economically grows and establishes links with partners across the world that they will be left isolated, weak, and poor.

In order to entrench their roles in South Asia, India and Japan have expanded their efforts at developing regional infrastructure. Tokyo and New Delhi believe that they can provide an alternative to OBOR that strengthens their position in the region and gives their neighbors an alternative to China. Right now, South Asia has one of the lowest regional connectedness of any regions in the world, and changing that may give Japan and India a means to integrate themselves with their neighbors.

One of the vital projects of the Japan India partnership is the development of the Indian Northeast. Historically remote and underdeveloped, the Northeast is the link between India and Southeast Asia. The Japanese share the Indian desire for developing these remote areas, and released an embassy statement saying “Japan has also placed a special emphasis on cooperation in North East for its geographical importance connecting India to south-east Asia and historical ties.” Echoing the Japanese desire for a corridor between India and its neighbors to the south-east, India has invested in infrastructure projects linking roads, bridges, and trains to Myanmar, Bangladesh, and Nepal.

Japan is an important partner in India’s vision for infrastructure expansion. Japanese technology and finance promises to rapidly speed up the quality and quantity of development. This year saw the development of an ambitious high-speed rail line between Mumbai and Ahmedabad, using Japanese bullet train technology. The project is partially financed by Japanese loans to India, and is expected to fill a desperate gap in India’s rail network. Over 11 thousand miles of rail track in India is in desperate need of modernization, and current transportation between the two cities is stretched to capacity. The project promises to ease rail congestion and improve quality of transit between the two cities.

The broadest, and perhaps most ambitious collaboration between India and Japan is the Asia-Africa Growth Corridor (AAGC). The AAGC aims to build a series of maritime linkages between Africa and Asia by developing infrastructure, trade routes, and common standards. To support these initiatives, the Japan Bank of International Development has announced that it will depart from its usual practice of only funding Japanese ventures and begin financing projects headed by African and Indian firms as well. This departure from convention signals Japan’s willingness to commit to the development of trade infrastructure across South Asia. The AAGC plans on having a vision statement with a concrete list of which projects the two partners will invest in by next year. That being said, India and Japan must move quickly to keep pace with China’s rapid infrastructure investments.  

Cooperation between India and Japan is an important part of balancing a rising China. While Beijing’s economy has grown to become the second largest in the world, Tokyo and New Delhi are a formidable counterweight. Japan and India are the third and the seventh largest economies respectively, and their collaboration brings complementary advantages in technology, manpower, geography, and defense. Yet despite their advantages, both partners feel increasingly uncomfortable in a regional neighborhood that is being dominated by an aggressive China. In order for this collaboration to work, Japan and India must make good on their words and aggressively begin investing in regional connectivity. The two governments should reach out to more regional partners and break ground on more projects. China has already begun its infrastructure-expansion abroad, and only time will tell if Japan and India can match its’ pace.