By Ankit Panda
Decoupling economic issues from strategic issues might be the best way for New Delhi to keep both Tokyo and Beijing happy.
Both Nitin Gokhale and Sanjay Kumar have cautioned in these pages that as India deepens its strategic partnership with Japan, it must be careful to consider its bilateral position vis-a-vis China. Given geopolitical realities in Asia today, Beijing is noticeably and understandably concerned with the growing rapprochement between Asia’s largest and richest democracies. While neither India nor Japan can independently stand against China on most standard measures of state power, together they form a considerably robust bulwark for the status quo in the region. For New Delhi, the ideal scenario would be to maintain positive economic relations with both countries while deepening security and strategic cooperation with Tokyo and maintaining an amicable detente with Beijing. In short, New Delhi seeks a positive-sum outcome with both countries. Achieving this won’t necessarily require traditional balancing, where New Delhi modifies its behavior to comply with the preferences of other actors (in this case Beijing). Rather, India’s interests would be best served by decoupling material and economic questions from broader strategic and security issues.
“Decoupling” is something that nearly every diplomatically mature state does — or at least tries to do. Simply put, the term describes the management of economic relations, including investment, development, and trade agreements, independent of broader strategic issues. The contemporary relationship between the United States and China is a good example of a relatively successfully decoupled bilateral relationship — major strategic issues persist but economic interdependency is amply developed, resulting in stability and mutual growth. India would do well to take this diplomatic paradigm to heart when it comes to interactions with both Beijing and Tokyo. As Modi’s recent visit to Japan demonstrates, in the India-Japan relationship, strategic issues, such as defense cooperation and even the civil nuclear cooperation agreement, run on a different track than economic issues. Modi returned from Tokyo with $34 billion in Japanese investment in tow while issues like the ShinMaywa US-2 aircraft deal, civil nuclear cooperation, and the two-plus-two dialogue were set aside for later. In broader terms, since the 2006 declaration of a “Strategic and Global Partnership (PDF),” economic and strategic relations have grown at different paces.
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