Apart from trade and investment flows, a key economic activity centered around the Indian Ocean is the flow of global energy resources. Economies to the east of India, namely, the south-east and east Asian economies as well as Australia, are all energy-importing economies. The economies to the west of India, namely, west Asian economies, are all energy-exporting economies. It is, therefore, quite natural that India's location makes it a vital element in the assurance of ocean security for energy flows from the energy sources in the Persian Gulof to industrial markets in east and south-east Asia.

 Energy supplies, both crude oil and gas (LNG), are bound to remain an important element of maritime activity in the Indian Ocean. According to a study, "The share of West Asia's supply of crude oil to the Asia-Pacific region is expected to increase from 71% in 1995 to as much as 93% in 2005. The attraction of west Asian oil is its easier transportability, compared to energy resources from other geographical regions. In terms of maritime security, it may be noted that even at present, nearly 40% of the world's crude oil sourced from the Persian Gulf passes through the Straits of Hormuz. Crude oil accounts for as much as $200bn of the $500bn of trade that flows through the Indian Ocean."⁶

 In 2001, petroleum, crude oil, natural gas and other fuels constitute 20% of Japan's total imports and 30% of India's total imports. Japan imports substantial amount of its energy need from Iran, Kuwait, Qatar, Saudi Arabia and UAE. Apart from all these countries India also imports oil from Bahrain, Oman, Nigeria and Sudan. More than 50,000 vessels transit every year through the Malacca Straits. The sea lanes of communication of the Indian Ocean are vital to Japan that imports 73% of its oil and natural gas imports and 15% of its food imports through the Indian Ocean SLOCs. Joint assurance of security in the region by Japan and India is vital to these SLOCs.

　

 Given the rising importance of the Asian economies to the global economy and in particular the central role of Japan, China, India and ASEAN in the global economic system, the stability and security of the Indian Ocean region is vital to the orderly progress of global economic activity. It is precisely for this reason that forces inimical to global peace and stability and revisionist forces that seek to alter the current global order may well attempt massive acts of terrorism in the Indian Ocean region aimed at dislocating the global economic system. Even when the aim of such forces is not directed against any specific country in the region, say Japan; any act of disruption in the region will hurt us all. No major country can remain oblivious to this fact. Modern industrial economies across the world are beginning to discover the cost they have had to bear, for example in terms of rising insurance costs and rising security costs, as a consequence of the 9/11 terrorism in the United States. A terrorist incident in the Indian Ocean aimed at either the US or any other country can have devastating consequences for all modern economies dependent on the normal functioning of the maritime economy of this region.

 This uncertain threat to our combined security calls for a cooperative security framework in Asia and in particular in the Indian Ocean region. Asia does not have a cooperative security framework like Europe. The Indian Ocean also does not have a security framework like the Atlantic and the Pacific. Countries like Japan, the United States, China, India, Australia, South Korea and the ASEAN should evolve a common Indian Ocean security framework that ensures maritime economic security and creates a system for rapid response. India is engaged in a series of consultations aimed at improving the efficiency of the policing of the high seas to check piracy and terrorism. Japan and India should actively associate together in creating such a regional framework to enhance ocean security in the region.

 Samaddar has suggested that "the growing menace of piracy, proliferation of small arms and drug trafficking has implications for the entire world and particularly so for Japan, since Japanese ships are the prime targets in and around the Malacca Straits area. Chinese incursions into the Indian Ocean will provide a capability, though the intention may not be there for the moment, to strangulate the oil flow from the Mid-East to East Asia. A harmonious relationship with modern India has obvious advantages for Japan, especially in the light of Chinese influence in the area, and India's recent unprecedented proximity with the US."⁷

Going beyond joint naval exercises and joint strategic planning to deal with piracy and high seas terrorism, India and Japan can cooperate in the modernisation of India's maritime economic system. Japanese investment in Indian port modernisation, in ship-building, in maritime infrastructure and in other related areas can help improve the quality of Indian response to any security threat in the region. India and Japan must engage in a bilateral security and economic dialogue aimed at such cooperation. Japan has increased its official development assistance to India and India has emerged as the largest recipient of Japanese aid, overtaking China. Grant-based investment in infrastructure, port development and other infrastructure development can benefit India and help contribute to Japan's security in the region.

 It is pertinent to note that when the Government of India altered its external aid policy and stopped accepting official aid from industrial economies it made an exception in the case of Japan, along with the United States, Britain, Russia and Germany. Indian government does not accept aid from any other country. All other European Union members have been asked to divert official assistance to non-governmental organisation. India's decision to continue accepting aid from Japan is a friendly gesture, because India's preference is increasingly for trade and investment flows rather than aid and debt flows. India views Japan as a long-term strategic partner. It is only natural that India and Japan should jointly work together for the security of the Indian Ocean, fight piracy and terrorism in the region and seek peace, security, stability and prosperity in Asia.