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A ‘fab’ way to conduct India-Japan tech diplomacy.

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• GS Paper 2 – International Relations.
• Tags: #IR #UPSC #India&Japan #semiconductors # competitive exams.

Why in the news?

India and Japan, in July 2023, agreed to collaborate on semiconductors in a bid to create a more resilient supply chain for this critical technology and work together for the joint development of the semiconductor ecosystem. The partnership will focus on five areas: ‘semiconductor design, manufacturing, equipment research, establishing resilience in the semiconductor supply chain, and talent development’, paving the way for government-to-government and industry-to-industry collaborations.

An alignment of policies

• The deal comes in the wake of the rapid expansion in the semiconductor industry, particularly the importance of specialized chips, which has prompted the need for growing the pool of talent available in the industry alongside increasing the number of semiconductor fabrication plants (fabs).
• The partnership fosters the exchange of technical knowledge, research, and innovation between the Indian and Japanese semiconductor industries, facilitates technology transfer, and enables Tokyo and New Delhi to stay at the forefront of semiconductor advancements. Both nations have aligned their policies to support semiconductor manufacturing and research.
• India’s “Make in India” initiative and Japan’s “Society 5.0” vision share the goal of technological self-reliance and innovation-driven growth.
• Bilateral agreements have been signed to promote technology transfer, cooperation in semiconductor research, and reciprocal trade in semiconductor-related products. The collaboration stands as a testament to the power of strategic alliances and technological synergy.
• Both nations recognize the critical importance of semiconductor technology in driving innovation, economic growth, and national security. Japan, with its advanced semiconductor industry, has long been a global leader in chip manufacturing and research.

The issues and the correct approach

• Supply chain disruptions and geopolitical tensions, which are of particular significance in the Indo-Pacific region, have underscored the need for diversifying semiconductor supply chains and cross-country collaboration.
• Joint research initiatives enable the pooling of resources and expertise to tackle complex challenges in semiconductor design, manufacturing processes, and materials science.
• This collaborative approach accelerates both innovation and the development of cutting-edge solutions.
• The partnership also emphasizes human resource development through skill exchange program, workshops, and training.

The American partnership

• India’s strength in semiconductor design and packaging offers scope for it to join forces with leaders in the industry.
• The agreement with Japan follows close on the heels of the charting of a technology partnership for the future between the United States and India which also covers investment, innovation, and workforce development, facilitating the long-term strategic development of complementary semiconductor ecosystems.
• As part of the agreement with Washington, New Delhi is set to sign an agreement with Georgia Tech University.

What is the State of India’s Relations with Japan?

• Defense Ties: India-Japan Defense and Security partnership has evolved over the years from bilateral and multilateral exercises including Dharma Guardian and Malabar respectively. And welcoming the participation of Japan for the first time in exercise MILAN.
• Tri-Service Exchanges: Between Japan and India have been institutionalized completing the triad. Coast Guards have had regular annual exchanges since 2006. Including, Japan and India Vision 2025 Special Strategic and Global Partnership – working together for peace and prosperity of the indo-pacific region and the world.
• Economic Ties: A test of the reliability of Japan as a friend was witnessed in 1991 when Japan was among the few countries that bailed India out of the balance of payment crisis.
• In recent years, the economic relationship between Japan and India has steadily expanded and deepened. The volume of trade between the two countries has increased. Japan was the 12th largest trading partner for India in 2020.
• Also, direct investment from Japan to India has increased, and Japan was the 4th largest investor in India in FY2020.
• Health-Care: In view of the similarities and synergies between the goals and objectives of India’s AYUSHMAN Bharat Programme and Japan’s AHWIN, both sides had been consulting with each other to identify projects to build the narrative of AHWIN for AYUSHMAN Bharat.
• Investment and ODA: India has been the largest recipient of the Japanese Official Development Assistance(ODA) Loan for the past decades. Delhi Metro is one of the most successful examples of Japanese cooperation through the utilization of ODA.
• India’s Western Dedicated Freight Corridor (DFC) project is funded by a soft loan provided by Japan International Cooperation Agency under Special terms for economic partnership (STEP).
• Besides, Japan and India had committed to build a High-Speed Railways in India by introducing Japan’s Shinkansen System.
• India Japan Nuclear Deal 2016 will help India build the six nuclear reactors in southern India, increasing nuclear energy capacity ten-fold by 2032.

What are the Roadblock to Strengthen India-Japan Ties?

• Rising China’s Dominance: China does not shy away from making efforts to block the rise of India and Japan, including by stepping up military pressure on them and opposing their UN Security Council’s permanent membership.
• Influence of China-America Rivalry: The intensification of Chinese-American rivalry contributes to disturbance of regional security in the Indo-Pacific.
• The region is militarized and an arms race is taking place, military exercises and manoeuvres are systematically occurring in disputed waters that ultimately affects peace and prosperity for the region, especially for countries like India and Japan.
• Domestic Issues in Japan: Japan is in the midst of a massive domestic debate over the revision of its national security and strategies, which has resulted in the assimilation of Japan’s former Prime Minister Shinzo Abe.

What is the significance of this partnership?

• Tackling Technological Challenges: India-Japan partnership holds a key role in shaping the global semiconductor landscape. Their collaboration addresses evolving tech challenges like miniaturization, AI, and quantum computing.
• Diversification: In January 2023, Japan and the Netherlands joined the U.S. to restrict chip material exports to China, affecting Japanese chip firms. Thus, the India collaboration becomes vital for Japan in diversifying the semiconductor industry.
• Supply Chain Challenges: Geopolitical tensions and supply chain issues underscore the need for diverse semiconductor supply chains and global cooperation.
• Hence, collaborative research efforts help in pooling resources to tackle complex semiconductor challenges, driving innovation and solutions.
• Unity Among Indo-Pacific Partners: This partnership comes after a recent US-India technological alliance which supports the development of interconnected semiconductor ecosystems.
• Hence, bilateral agreements with India by the US and Japan showcase unity among Indo-Pacific partners in critical technology, reflecting shared geostrategic and security interests.

Way forward

Both agreements indicate the confidence placed in India by the two Quad countries (The Quad has India, Japan, Australia and the U.S.) and also signal the coming of age of India’s own capabilities in the development of semiconductors and related technologies.

By combining Japan’s technological prowess and India’s innovation and design capacities, the collaboration on semiconductors paves the way for a future characterized by advanced electronics, enhanced connectivity, and a shared commitment to pushing the boundaries of technological excellence.

Conclusion

The India-Japan partnership is poised to play a pivotal role in shaping the global semiconductor landscape. As technology continues to evolve, their collaboration will remain dynamic, addressing new challenges such as semiconductor miniaturisation, AI integration, and quantum computing. This partnership will also have far-reaching implications for the global technology ecosystem and the dimensions of geopolitical partnerships in the Indo-Pacific.

Source: The Hindu

Mains Questions:

Discuss recent developments in India-Japan relations. How their mutual co-operations will be helpful in India’s growth and development.