Japan-India-EU: A Digital Partnership for the Digital Decade

The Foreign Affairs and National Security Group has introduced column series written by overseas experts who have a close relationship with the CIGS, as part of its efforts to facilitate “overseas communication and international networking.”

Mahima Duggal is a research associate with the Centre for Air Power Studies (CAPS) in New Delhi, India. She wrote a column about a digital partnership among France, India, and Japan.

The coming decade – characterized as the era of information, innovation and new technologies – is poised to witness major, fast-evolving digital trends, further spurred by a landscape of intense US-China great power technological competition. While China’s Politburo identified advanced technologies as the foremost issue in its five-year (2021-2025) national security agenda, Washington is also actively discussing regulations to enhance US competitiveness. Further, even as Beijing promotes its Digital Silk Road (DSR) to export Chinese technologies and expand and augment its influence, the US has initiated its own Digital Connectivity and Cybersecurity Partnership (DCCP) to advance inclusive growth, open internet, a diverse and resilience communication infrastructure, and a robust and secure digital economy. This has forced middle powers and small states into a binary choice. To navigate such an environment, actors like the European Union (EU), Japan and India can come together to take a lead in shaping the global digital future. Such a transcontinental digital could offer a viable third way that focuses on human interests over state or corporate ones and is driven by shared values of democracy, freedom of speech, human rights, and the rule of law. What are the convergences around which such a digital partnership take shape? What would be the key tenets and focus areas of such a trilateral digital connect?

Building on Bilaterals

Notably, such a tripartite digital partnership would not be out of place, but based in the already strong focus on digital connectivity cooperation between the three actors, particularly since the onset of the COVID-19 pandemic. The EU-India Strategic Partnership: Roadmap to 2025, concluded in June 2020, displays an ardent emphasis on digital connectivity. In May 2021, both partners further affirmed a Connectivity Partnership to enhance India-EU synergies and complementarities, premised on Sustainable Development Goals (SDGs) for inclusive growth. Their broad digital connectivity agenda not only aims to offer a competitive – and more reliable – alternative to China’s DSR but also the offers the potential to fundamentally change the regional development landscape.

Similarly, digital cooperation and collaborations in the Indo-Pacific has become an increasingly important facet of the India-Japan special strategic and global partnership for the new era. In October 2018, India and Japan launched a Digital Partnership focused on information communication technology (ICT) cooperation, including 5G technology, and collaborations in research, innovation and industry via a joint ‘Start-up Hub’ established by Japan External Trade Organization (JETRO) in Bangalore with support from Japan’s Ministry of Economy, Trade and Industry (METI) and India’s Ministry of Electronics and Information Technology (MeitY). Notably, their partnership also includes focus on increased investments; semiconductor and other electronic equipment manufacturing; and cybersecurity, capacity building and human resource cooperation in next-generation technologies. As part of this partnership, both states also signed a statement of intent to cooperate on artificial intelligence (AI) and, more recently, a memorandum of understanding for industry-level cooperation in ICT infrastructure (including 5G networks and submarine optical fiber optic cables (such as that between Chennai and Andaman and Nicobar islands). The India-Japan cyber dialogue, launched in 2012, has further helped both states bolster cooperation via regular exchanges on cyberattacks, resilient supply chains, and information and digital systems security.

Beyond India, Japan and the EU are also furthering a new digital partnership agreement, announced alongside the EU’s Indo-Pacific strategy in September 2021, on 5G technologies, quantum computing, artificial intelligence and particularly, semiconductors. Notably, the EU’s recent Indo-Pacific strategy document identified India and Japan as its foremost connectivity partners in the region, while pledging to help build a regulatory environment and mobilizing funding for better digital (and physical) connectivity. Japan also features as a key research and innovation partner under the ‘Horizon Europe’ initiative. The 2021 EU-Japan Summit saw both pledging to collaborate to promote their digital transition, including in setting global standards, enacting a mutual data adequacy agreement, digital economy cooperation, and digital currency development.

Furthermore, digital cooperation is also a focus area for the three actors via their shared membership of international and regional forums, such as the Group of Seven (G7), which includes Japan and the EU, with India as a special invitee. All three are set to take forward the G7’s Build Back Better World initiative with a focus on digital connectivity. Tokyo and New Delhi are also coordinating their digital policies under the technological vertical of the Quadrilateral Security Dialogue (Quad) alongside Australia and the US, and the India-Japan Asia-Africa Growth Corridor, which aims to enhance digital connectivity and capacities to support mutual development. The Platform for India-Japan Business Cooperation in Asia-Africa region can further enable focused industrial digital (especially telecommunication) sector collaboration. These platforms give bilateral cooperation in the digital arena a regional and global outlook, making the need for trilateral exchanges and coordination all that more important.

Domains for a Digital Trilateral: Regulation, Industry, and Infrastructure

Bilateral mechanisms, modalities and partnerships have created a foundational framework for three-way cooperation in the technology sector. A Japan-India-EU digital partnership will invariably be shaped by convergences and divergences in three key domains – international regulations, digital economy and industry, and digital connectivity and infrastructure – which form the commonalities of their bilateral partnerships.

Regulation

Both Tokyo and Brussels are closely aligned on matters of regulation and international standards under their Economic Partnership Agreement (EPA), which can translate into cooperation in the digital governance sphere since both share common democratic values and social agenda. The EU-Japan Digital Policy Dialogue is a key mechanism to advance digital regulatory policies; a notable focus of this is standardizing a secure deployment of 5G network and advancing data privacy laws in concert with the private sector. India can also be a key partner here. In 2020, India banned over a 100 Chinese mobile applications (including TikTok) – a decision it justified based on enforcing platform fairness and privacy rights of Indian citizens, which all three actors share. In fact, the Indian parliament is currently considering a comprehensive Personal Data Protection (PDP) Bill that incorporates several elements of the EU’s General Data Protection Regulation (GDPR) framework (such as the provisions regarding disclosure of sensitive personal information) but puts in place a broader scope for implementation. Notably, with China making strides in its eCNY (digital renminbi) rollout and EU-Japan already working together for digital currency development, setting international e-currency norms be another area for collaboration.

Nevertheless, India, Japan and the EU continue to have certain differences in their positions of data flow. For instance, while India’s PDP proposed stringent data localization clauses (albeit somewhat diluted from its initial stance) – something the EU is also debating – while Japan stands strongly for free cross-border flow of data. Here, open and frank trilateral consultations on their domestic digital governance norms and standards, and sharing of insights and best practices, can help bring increased alignment to their positions on international standards. India and Japan can utilize the EU’s normative power to shape the global framework and provide a sustainable, transparent and fair alternative to states in the Indo-Pacific as the US and China compete for primacy in the arena. While the EU recognizes China as a systemic rival, both India and Japan are deeply concerned about Beijing’s rapidly advancing influence in the region – giving them a shared interest in curbing its promotion of digital governance models grounded in Chinese socialist characteristics.

Industry

Furthermore, in context of digital economy collaborations, India, Japan and the EU are all proponents of regulating digital platforms to ensure fairness. Japan, in particular, is deeply concerned about the outflow of Japanese talent and technology to China, even as the latter’s digital lead grows rapidly. Tokyo further fears that as China-US competition intensifies, both countries will come to dominate the semiconductor industry, all but destroying Japan’s own chip manufacturing – seriously harming its economic and national interests. Similarly, the chip crisis has awakened the EU to the importance of access to technology for geopolitical, geoeconomics and geostrategic strength and sustaining its technological independence. The EU has long been forced to hand over valuable proprietary technology to China for continued access to the world’s second-largest economy and wealthiest country. For India too, as it moves up the technological value chain towards increased R&D, innovation, product design and testing, analytics, and machine learning, it is entering into stiff competition with China in its digital economy.

Here, trilateral cooperation can help the three actors prevent market dominance by the great powers over smaller players. They can pool their resources for co-creation and mutual enrichment, thus augmenting productivity via enhanced cooperation in analytics and machine learning to address shared challenges. This can help boost interactions between industries and boosting joint capacity, and thus be a game-changer on the international platform.

Infrastructure

Lastly, a key tenet of a Japan-India-EU digital trilateral must be digital infrastructure cooperation. Not only does India have a massive gap in physical infrastructure, but also requires significant long-term financial investments and technical assistance to improve its ICT infrastructure and digital education and training. Japan is already a major investor in India’s startup ecosystem and a critical, reliable partner for its digital revolution. India holds immense potential to emerge as one of the world’s foremost global technological hub; a combination of increased investments by Japan and the EU, and growing collaborations for R&D and innovation, can offer India a competitive advantage and the three partners a joint leadership role in the region and beyond.

Furthermore, the three actors can coordinate digital infrastructure financing in third countries of the region. The EU has recently ramped up external financing via new mechanisms like the Neighbourhood, Development and International Cooperation Instrument (NDICI) or the ‘Global Europe’ initiative to include supporting the digital economy, in addition to existing ones, like the European Investment Bank (EIB) that has supported Asia-Pacific development for over a quarter of a century. Notably, the NDICI has earmarked almost 80 billion euros for EU-led development projects in Asia and the Indo-Pacific. Japan is already recognized as one of the largest and most reliable official development assistance (ODA) partner, with over 70 percent of its aid being disbursed in the Indo-Pacific (particularly Southeast Asia). This assistance is rendered both directly and via the Tokyo-led Asian Development Bank (ADB). Notably, although comparatively limited, India has long been an aid provider in South Asia, including Afghanistan, Bangladesh, Bhutan, Nepal, Sri Lanka and Maldives. Further, India also holds experience setting up “fibre-optic network to provide satellite connectivity, tele-medicine and tele-education” under the Pan African e-Network project that encompassed connectivity in the e-governance and e-commerce areas.

Conclusion

Therefore, a trilateral Japan-India-EU digital partnership can be an effective mode of outreach to smaller and middle power states in the region at a time of great geopolitical flux. At present, the Indo-Pacific has become characterized by a network of ad hoc institutions and minilateral arrangements; here, a trilateral effort to coordinate strategies and plans of action is critical to eliminate the multiplicity and redundancy of competing, and sometimes incompatible, policies and tactics on connectivity. While the EU’s Asia outlook was previously China focused, it is increasingly moving beyond China and the US-China rivalry to closer engagement with India and Japan. Such a new, positive outlook can help take forward the Japan-India-EU trilateral formulation with digital connectivity acting as an Asia-Europe cross continental bridge. Better trilateral collaboration and exchanges can be a way to look at the broader picture and implement shared objectives in a strategic and effective manner. However, such an effort will require all parties to be willing to compromise their national outlooks to come to an alignment on digital policy and connectivity; they must be proactive in seeking, building and sustaining a meaningful partnership.

*Mahima Duggal is a Research Associate with the Centre for Air Power Studies (CAPS) in New Delhi. Her research is focused on security issues in the Indo-Pacific, and she has written extensively on subjects like Indian foreign policy, East Asian security dynamics, the rise of China and the US alliances and partnerships, for both academic and popular media platforms. Ms Duggal is also an Associated Research Fellow at the Stockholm Centre for South Asian and Indo-Pacific Affairs (SCSA-IPA) of the Institute for Security and Development Policy (ISDP) in Sweden, and the Editorial Assistant to Series Editor for Routledge Studies on Think Asia.