In Focus: Beyond Bilateralism in the Indo-Pacific
Image Source: Wikimedia Commons
The current geopolitical landscape is witnessing an ever-growing fragmentation across continents. The Russia-Ukraine conflict, volatility in the Middle East, and US-China strategic competition, coupled with regional conflicts, are seeing a restructuring of the post-World War II order. Along with bolstering the Indo-Japan partnership, New Delhi has to walk the balancing rope between Beijing and Washington to assert itself as a regional leader and espouse the cause of a Free and Open Indo-Pacific (FOIP), climate actions, and regional harmony.
Global Shocks and the Need for Regional Harmony
Against this backdrop, high-level diplomatic engagements like the recent Japanese Prime Minister Sanae Takaichi’s visit to New Delhi take on outsized importance. It was an opportunity to convert rhetoric into concrete projects that shore up regional adaptability. The concurrence on advancing cooperation based on three priority areas- defence and security cooperation; economic partnership, including economic security, energy reliability, technology, and innovation; and people-to-people exchanges is a well-founded structure to complement the partnership.
During the 16th Indo-Japan Annual Bilateral Summit in New Delhi, 129 MoUs were signed to deepen economic cooperation and energy security. The summit was more than a routine diplomatic engagement; it offered New Delhi and Tokyo an opportunity to recalibrate their Special Strategic and Global Partnership towards addressing emerging challenges in economic security, resilient supply chains, maritime governance, and regional stability.
Recent years have exposed how fragile the global order has become; simultaneous shocks from the Middle East and the Russia–Ukraine war have disrupted energy markets, strained food supplies, and snarled shipping lanes, while weak collective action has blunted progress on climate change. These crises cascade through interconnected economies; for countries across Asia, the result is a stark choice between inward protectionism and cooperative regional solutions.
Act East and India’s Leadership Role
India’s Act East Policy has matured from a diplomatic posture into a practical blueprint for regional economic integration. The India–Japan Summit crystallised ways New Delhi can convert intent into tangible projects, especially by linking Northeast India as a gateway to the Bay of Bengal and ASEAN markets. This shift dovetails with Japan’s Official Development Assistance (ODA) and private finance approach through its nodal agency, the Japan International Cooperation Agency (JICA), which is being well-channelled for the development of Northeast India across sectors, most importantly through regional connectivity projects. The recently inaugurated national highway in Meghalaya is a testament to the JICA-sponsored infrastructural development.
The JICA-funded projects in South Asian nations will build and bolster regional harmony, assist in stabilising energy and food supplies, diversify supply chains, and build interoperable emergency responses that require coordinated infrastructure, shared stockpiles, and predictable trade rules. By prioritising project-based collaboration, India can lead a connectivity agenda that is inclusive, standards-driven, and commercially viable, while Japan secures trusted partners for critical technologies and resources. The result is a pragmatic partnership that prioritises regional stability and economic opportunities over narrow geopolitics.
Why does Japan Need India?
Japan’s calculus increasingly points to India as an indispensable partner for a number of solid reasons. Primarily, India is one of the Asian countries that has a stable democracy with rule-of-law institutions. Second, market access, securing the supply chains, and technologies. Demographically, India offers a young, rapidly urbanising workforce and a growing middle class that can sustain long-term demand for Japanese goods and services, from automobiles to advanced electronics. Economically, India’s scale and manufacturing ambitions make it a natural partner for Japan’s push to diversify production away from concentrated hubs: Japanese firms gain a large, cost-competitive base for exports while India attracts investment, technology transfer, and higher-value jobs.
Third, resource security. Japan lacks abundant domestic supplies of critical minerals and advanced battery inputs; India’s expanding exploration, recycling, and mineral-processing initiatives find a place in the subject of bilateral agreements. This will help Tokyo build trusted, resilient supply chains for semiconductors, batteries, and clean-energy technologies. Despite this, bilateral trade is heavily skewed; Japan’s bilateral trade with India totalled US$ 27.47 billion during FY 2025-26. Exports from Japan to India during this period were US$ 21.43 billion, and imports were US$ 6.04 billion.
Natural Complementarity and Counter-China Dynamics
China is Japan’s largest trading partner; however, Japan this year has downgraded China’s diplomatic status, and this is where India fits in. One of the reasons for deepening ties with India is that the operating environment for Japanese companies in China is becoming difficult, and the ties between the two countries have grown tense in recent years, particularly after the exchange of unfortunate comments last year.
China’s population is also declining while Japanese companies are facing stiff competition from local competitors. Already, some leading Japanese banks are exploring substitutes like India and Singapore. Japan is also trying to reduce its reliance on China for critical minerals, and the India-Japan joint statement notes that the two countries “reiterated their grave concerns over the use of economic coercion and non-market policies and practices, including arbitrary export restrictions that may lead to supply chain disruptions.”
The recent MOUs on energy, batteries, AI, and critical minerals crystallise the complementary nature of India-Japan bilateral relations. Japan brings capital, project execution, and standards; India brings scale, talent, and space for diversification. Together they can establish a rules-based economic order in the Indo-Pacific. Furthermore, as the Indian PM in his address to the India-Japan Business Forum stated, “We are opening up every sector of the economy to greater private sector participation,” it’s a clear message to the Japanese business community.
Free and Open Indo-Pacific, QUAD, and Balancing China
Much of the discourse surrounding India–Japan cooperation continues to frame the relationship primarily through the lens of balancing China. While Beijing’s growing military assertiveness in the East and South China Seas, expanding naval presence in the Indian Ocean, and use of economic coercion have undoubtedly accelerated convergence between New Delhi and Tokyo, reducing the partnership to an anti-China framework overlooks its broader purpose. The objective is not containment but the preservation of a stable, open, and rules-based Indo-Pacific in which sovereignty, freedom of navigation, and international law remain respected.
With the United States punitive tariffs, it raises the political cost of alignment for partners like India. Heavy-handed US economic tools therefore risk shrinking the Quad’s political space by making cooperation appear coercive rather than cooperative.
More recently, the announcement that the US Indo-Pacific Command would be dropping “Indo” from its name and reverting to the long-standing US Pacific Command has drawn criticism. The Trump administration could be in a hurry to close trade deals with China and, in the bargain, go slow on Indo-Pacific and Quad initiatives, or experts suggest it’s the US’s realignment with China.
In all cases, the asymmetries are distinct. Juxtaposing deeper, project-based cooperation with the Quad and sustained, inclusive engagement with China through ASEAN and other multilateral channels best serves India’s development and strategic interests. This dual track preserves New Delhi’s tactical autonomy and keeps ASEAN central, making India a bridge rather than a breaker in regional politics.
Beyond Bilateralism
Tokyo’s engagement with New Delhi has expanded across nearly every instrument of statecraft and is reflected in the diplomatic language in defence cooperation, enhanced logistical interoperability, and institutionalisation of the Foreign and Defence Ministerial (2+2) Dialogue. India’s vision for the Indo-Pacific emphasises an inclusive regional architecture centred on ASEAN, while Japan’s Free and Open Indo-Pacific (FOIP) similarly advocates transparency, connectivity, adherence to international law, and interdependent quality infrastructure.
At a time when the Indo-Pacific is experiencing profound geopolitical and economic transformation, India and Japan are uniquely positioned to shape and not merely respond to the evolving regional order. The challenge is to balance cooperation and deterrence when the elephant is in the room.
Top Stories of the Week
NITI Aayog proposes ₹50,000 crore fund to make India global biotech power
NITI Aayog released a roadmap on July 16 proposing a ₹50,000 crore BioEconomy Growth Fund to bridge the gap between research and commercial manufacturing. It targets growing India’s bioeconomy from $195.3 billion in 2025 to $691 billion by 2035, with over 30 million jobs, and positions India among the world’s top three biotech nations.
The roadmap recommends 6 National BioMissions covering gene therapies, climate-resilient crops, synthetic biology, disease surveillance, and AI-enabled drug discovery, each with a designated lead ministry. 4 new institutions are proposed to coordinate implementation, including a National BioData Council and a BioIP and Innovation Evaluation Agency.
India Rolls out ‘White Rabbit Tech’ to secure Indian Standard Time Network
India has deployed a demonstration network using White Rabbit technology to deliver a secure and highly accurate Indian Standard Time (IST) signal. The initiative aims to reduce dependence on foreign timing systems while strengthening critical sectors such as telecom, banking, power and defence.
Originally developed by CERN, White Rabbit is an open-source technology that enables ultra-precise time synchronisation across networks. It is widely used in scientific research and is increasingly being adopted for critical infrastructure and advanced digital technologies.
A Few Good Reads
Ajay Tyagi writes about the special tax concessions for FPIs, arguing that India should instead simplify its rules and pursue stable Foreign Direct Investment.
Shailesh Dobhal questions whether India’s consumption story can keep resting on a thin affluent class rather than broader income growth.
Shekhar Aiyar and Rajesh Aggarwal argue India’s new FTAs (with the UK, New Zealand) without deeper reforms on intermediate-goods barriers, regulatory alignment and investment facilitation, won’t deliver on export and jobs ambitions.
Michael Stott argues the protests’ unexpected scale, plus the backlash to the police crackdown, now pose a real political risk to Modi and the BJP.
Shankkar Aiyar argues that Punjab’s real story lies beyond political crises, highlighting how women’s entrepreneurship and social leadership are quietly reshaping the state’s development trajectory.