U.S.-Japan-India Strategic Dialogue
September 22-24, 2010
Washington, D.C.
Recognizing the strategic potential for expanding cooperation on regional and global challenges
and the shared values among the United States, Japan and India, the Center for Strategic andInternational Studies (CSIS), the Confederation of Indian Industries (CII), and the Japan Instituteof International Affairs (JIIA) initiated the U.S.-Japan-India Strategic Dialogue in June 2006.
Co-chaired by Yoshiyuki Kasai, Chairman of the Central Japan Railway Company, former CII
Chief Mentor Tarun Das, CSIS President John Hamre and former Deputy Secretary of StateRichard Armitage, and directed by Michael Green of CSIS, the Strategic Dialogue convened forthe seventh time in Washington, D.C., from September 22 through September 24, 2010. As
before, all the sessions and other events were held on an off-the-record basis to help stimulate
debate. Meetings and consultations were also held with members of Congress and theadministration.
The major themes discussed are summarized below.
SECURITY ISSUES
All three delegations reiterated support for establishing a trilateral strategic dialogue among thethree governments, noting that Secretary of State Hillary Clinton included this proposal in her
January 12, 2010, speech on Asia. It was pointed out that trilateral discussion formats in Asia
can supplement broader forums such as the Asia-Pacific Economic Cooperation (APEC) forumor the East Asia Summit (EAS), given the diversity of interests, economic development levels
and political systems in the region. In this context, a first track U.S.-India-Japan trilateraldialogue would coexist with other such dialogues among India, China and Russia or the UnitedStates, Japan and Australia, and would contribute to broadening dialogue rather than dividingnations.
The participants acknowledged the fortitude and sacrifice being demonstrated by the members ofthe U.S. and allied armed services as well as from civilian agencies and NGOs from all three
countries operating in Afghanistan. Japan is the second largest donor to Afghan reconstruction
after the United States. India also is a major donor and has a core strategic interest in the defeatof extremism and the emergence of a stable and successful Afghanistan. Both the Japanese andIndian delegations noted that the variable they watch most carefully in Afghanistan is the future
U.S. role and expressed some concern about mixed signals coming from Washington about U.S.
longer-term intentions in Afghanistan.
Participants noted that the re-rise of China is one of the most important factors in Asian andglobal affairs today and confirmed their common desire to see a constructive China become partof the solution to regional and global problems. However, this seventh session of the trilateral
strategic dialogue stood out in terms of all the participants’ concern about China’s assertive
diplomatic and military stance over the past year, most recently in the wake of a collisionbetween a Chinese fishing boat and Japanese Coast Guard vessels near the Senkaku Islands. Theparticipants shared the view that China appears to be testing its neighbors’ resolve on territorial
issues from the East China Sea to the South China Sea and along the Sino-Indian border. TheAmerican participants reiterated that there is a bipartisan consensus that the U.S.-Japan Security
Treaty does apply to the Senkakus, which the Japanese participants welcomed. Participants fromall three countries agreed that there should be greater dialogue among the United States, Japanand India on these recent developments as well as greater efforts to encourage restraint andtransparency on China’s part. All the members reaffirmed a common interest in building better
relations with China, but agreed that recent developments merit more candid and public
expression of expectations towards China from her neighbors.
Participants addressed fiscal constraints with respect to the U.S. defense budget and the potential
impact on the size of the U.S. Navy and future capability to maintain a presence in the South
China Sea. They also agreed that the United States and Japan must encourage a larger role for
the Indian Navy in the South China Sea and keep the sea lanes open in the Western Pacific.
All three delegations highlighted their nations’ shared interest in the security of the Indian Oceanand expressed the hope that the Japan Self Defense Forces would expand their presence in theIndian Ocean and the Arabian Sea, noting the successful refueling and anti-piracy operations ofthe SDF and the high confidence that U.S. and Indian naval services have in their Japanesecounterparts.
The participants agreed that the United States and India need to take their already unprecedented
defense cooperation to the next level, by laying the foundation for solid defense industrial
cooperation and accelerating Indian defense modernization. Participants expressed theexpectation that U.S.-Japan security cooperation would steadily expand in the areas of ballistic
missile defense, cooperation on Air Sea Battle concepts, and expanded joint development,production and cooperative acquisition on equipment. The delegates urged all three countries tomake further progress on defense industrial cooperation and discussed the need for further
reform of the U.S. defense export regime. Regarding Japan-India defense cooperation,participants pointed to the potential for increasing joint exercises, both bilateral and with theUnited States, as well as joint development, production and cooperative acquisition of defense
equipment in the future. There was broad agreement that both Delhi and Tokyo should
accelerate cooperation based on the December 29 Action Plan. The Japanese side briefed theparticipants about the report on Japan’s “Security and Defense Capabilities in a New Era”
accepted by the Prime Minister’s office on August 27, 2010. There was broad support for therecommendations, particularly with respect to collective defense and revising the “ThreePrinciples” banning arms exports. In the context of discussions about Japan’s National Defense
Program Guidelines and Mid-Term Defense Plan, both due in December 2010, participants
called for increased Japanese defense spending to reflect dynamics in the regional securityenvironment.

Finally, the delegations applauded President Obama’s plans to visit India and Japan in November
and Prime Minister Singh’s visit to Japan in October and urged that those trips be used tohighlight both India’s important role in East Asia and Japan’s important contributions to South
Asia and the Indian Ocean region.

ECONOMIC ISSUES
In parallel with converging security interests, the delegations highlighted the three nations’
growing economic ties. Participants noted with satisfaction that annual Japanese investment inIndia has surpassed US $3.7 billion, but also expressed the view that Japanese economic
relations with India remain well below their full potential.
Participants noted that Japan and India could transform bilateral business relations throughgreater joint investments in Indian infrastructure (particularly rail, power, roads, waterways,
water use and “green cities”). Japanese participants highlighted the enormous potential in
India’s consumer market, noting that 50 percent of Indian households make over US $2000 peryear and that retail sales and durable goods ownership in India will likely boom in the comingyears. The delegations noted the importance of the Delhi-Mumbai corridor as a centerpiece for
India-Japan cooperation and also discussed growth potential in India’s eastern coastal area whereChennai is a natural center. Japanese support for the new Indian Institute of Technology inHyderabad, the Indian side hopes, will be a powerful vehicle for human resource development
and professional exchanges between the two countries.
At the same time, Japanese business participants expressed concern that the Indian investment
environment still poses many difficulties for Japanese private companies, noting that othernations’ high levels of investment in India are backed by government schemes that give them ahigher tolerance for risk. The Japanese participants briefed the Japanese Government’s “NewGrowth Strategy” and highlighted plans to develop new overseas markets in countries like India
through infrastructure deals such as railways and power generation, including nuclear, thatcombine public financing (such as by the Japan Bank for International Cooperation) and private
sector investments. It was agreed that this “New Growth Strategy” could serve as the basis for a
concrete action plan between Japan and India when the Japan-India Economic Partnership
Agreement is signed during or after Prime Minister Singh’s visit to Japan on October 25.
Overall, the Indian participants acknowledged a new mindset in Japan about economic
cooperation with India and credited the Japanese participants in the dialogue with leading theway.
The participants spent somewhat less time on U.S.-India or U.S.-Japan economic relations, butdid highlight the importance of putting forward a concrete agenda for further integration of theU.S. and Japanese economies, noting the Obama administration’s new engagement on the Trans
Pacific Partnership and Japan’s interest in the same framework, as well as the advantages ofstudying a U.S.-Japan Economic Partnership Agreement.
The participants also presented candid briefs about the challenges facing each of the three
economies and discussed various scenarios for restoring economic growth in Japan and theUnited States and sustaining economic growth in India. In that context, all three delegationswelcomed the growing role of the private sector in India, but expressed concern that India’s
relatively high rates of growth could breed a complacency in both government and business thatwould be counterproductive.

The economic discussion concluded with a broad agreement that U.S. priorities should be tofocus on job creation and fiscal health; that the Japanese priorities should be to increase domestic
demand, execute the “New Growth Strategy” and deal with fiscal problems resulting frompension and social security policies; and that the Indian priorities should be to improve theenvironment for foreign direct investment and infrastructure and increase the use of renewableenergy and eco-friendly products.
GLOBAL AND REGIONAL ARCHITECTURE
The participants agreed international institutions need to be more inclusive and reflect the new
distribution of economic power, but they also noted that expanding membership will also posenew challenges to the effectiveness of institutions such as the United Nations Security Council,
the G-20, and the East Asia Summit (EAS). The participants agreed that it would be increasingly
necessary to undertake parallel efforts to enhance coordination and dialogue among like-mindeddemocracies, if not through new formal institutions then at least informally through caucusing at
the G-20 and EAS. Participants agreed that India and Japan should have permanent seats on theUnited Nations Security Council. The group also noted concerns about the future of the G-20,
recognizing that it was a forum established in response to a crisis rather than to shape theinternational economic order.
The participants agreed that East Asian regional security architecture will continue to rest largelyon the “hubs and spokes” of U.S. alliances, but further multilateral cooperation including
institutional mechanisms such as the Association of Southeast Asian Nations (ASEAN) can
complement rather than compete with those alliances. Participants applauded U.S. membershipin the EAS and active participation in the ASEAN Regional Forum (ARF) but also noted theneed for a clear U.S. vision on trade and values when President Obama travels to the region inNovember.
Participants identified a common interest in energizing international institutions to focus more onwater resources in order to avoid dangerous competition in regions such as the Mekong Delta
and the Himalayan Plateau, and to establish norms for cooperation that improve state-to-state
relations and human security. Cyber-freedom was also introduced as a promising area fortrilateral cooperation in which the United States, Japan and India can demonstrate the requisite
technological leadership to shape rules for the cyber commons. It was agreed that cooperation
on cyberspace and outer space would be useful agenda items for the subsequent meeting.
ENERGY AND CLIMATERegarding the post-Kyoto framework the delegations agreed that a new framework should befairer and more effective and one that major countries accept without exception. The
participants also noted that the pledge-and-review approach, the bilateral credit mechanism, anda mechanism for the transfer and dissemination of low-carbon technologies and products aredesirable. With regard to smart grid, the Japanese side noted it would only work when carefullyadapted to local demands based on thorough cost-benefit analyses. While recent development
plans for nuclear power, particularly in developing countries, bear growing importance both forenergy security and the prevention of global warming, the delegations noted it would succeed

only when accompanied by efforts on the standardization of regulations and rules, thedevelopment of operation/maintenance systems, and the skill sets of the workforce involved, notto mention safeguard mechanisms against proliferation. The Japanese side expressed hope thatIndia-Japan-US cooperation will effect further cooperation on this front. The participants alsostressed the need to accelerate the ratification and signing of the bilateral nuclear cooperationagreements between India and the United States and Japan and India, respectively. The
American and Japanese delegations expressed concern that new liability laws in India could
become obstacles to peaceful nuclear cooperation and the Indian delegation explained that therules will be equally challenging for foreign and Indian firms alike, expressing the desire toensure that any obstacles are cleared away in the implementation phase.
NEXT STEPSThe three delegations agreed to conduct the next session of the U.S.-Japan-India Strategic
Dialogue in 2011 in Washington, D.C.