Understanding the Indo-Japan Economic Relations in the Asia-Pacific Century

Abstract

A period when the world’s economic gravity is shifting to the Asia-Pacific region with the promise of an Asia-Pacific twenty-first century, Japan is increasingly facing pressure to maintain its economic and political position vis-à-vis China. To minimize any adverse impact, Japan needs to expand its economic horizon crossing the hitherto established boundary, importantly focusing on one or more countries to increase its strategic depth in the international economic relationship. India seems to be uniquely placed to get Japanese attention for such engagement for a number of advantageous factors it holds. With a vast population, diverse demography, increasing economic promise, democratic governance, soft power and physical location at the core of South Asia, India makes a bona fide contender to play an important role in the emerging global order. This article argues that a deeper economic cooperation between Japan and India can benefit Japan Inc. through the expansion of economic space, on one hand, and may accelerate India’s rise in the global order, on the other. But for a cooperation of mutual betterment, both countries need to position themselves for becoming complementary to each other. They will face a number of barriers at both ends though.