Suppose the Indians had been able to agree to form a Federal Government in 1937-38 and, subsequently, had refused to join the UK and other Dominions when they declared war on Germany in 1939. The Brits needed Indian troops for Burma (which had split off from India in 1937), Malaya and the MENA and may have been content to let India, like Eire, remain neutral while gaining mercenary soldiers from it. However, White officers would have been withdrawn from the British Indian Army which, I suppose, would have suited the Indians well enough. The Navy was a different matter. British officers would have had to be retained but this could have been done discretely (India had a British admiral till about 1958) and would have made little practical difference.
It is possible that a Federal India would have had good enough relations with Imperial Japan and so war would have been avoided if India accepted Japanese hegemony over Burma, Malaya, etc. The problem was that Burma had claims over Indian territory which, in any case, would have been of interest to the Americans who wanted to supply China 'over the hump'. At that time it was possible that a Christian dominated autonomous- or even independent- tribal region might be carved out of North East India and Burma. India might not have cared but the Japanese would have had an interest in extending their rule into the Assam hills and chucking out the Chinese. Once again, the Indians may have been indifferent to the North East. In any case, their Army didn't have the planes and guns and supply chains to fight the sort of war which General Slim was eventually able to conduct. It should be remembered that, by the end of the war, there were 240,000 British and 120,000 American troops in India. Without them large parts of the country would have been taken by the Japanese. It is a different matter whether they could profitably hold such territory.
Would Japan have been content with Assam? Would they have respected India's neutrality or, as Gandhi would later suggest, simply have demanded right of passage to Iran and the MENA?
One might think that starving Bengal would not have been too appetizing but a starving country can still supply a lot of rice and sushi and coal and iron precisely because the less productive element is welcome to just fucking die already. Indeed, the Bengalis themselves were not greatly bothered by Malthusian solutions to problems created by EVIL WHITE BASTIDS who had even levied Income Tax to pay for Famine Relief!
Apart from needing Bengali food and industrial capacity, the other reason the Japs would have moved in on Bengal- was that they had Bengali puppets like Ras Behari and Netaji Bose whom they could have used to create a puppet state. The Bengali windbag might be useful to counter Chinese propaganda.
Be that as it may, the simple fact was that by the time the Japs made their big move into India, their only hope of resupplying themselves was to get their hands on Indian food and medicines etc. It was because General Slim prevented this outcome- together with the fact that Kotoku Sato had shit for brains- that about a 100,000 Jap soldiers starved to death in that theater. Indeed about 1.4 million Jap soldiers starved or died of disease during their Asia-Pacific war. Why fight a kamikazi when you go around him and then laugh your head off as the poor fellow dies of hunger?
Obviously, without the Brits and Americans and African regiments, the outcome of an Indo-Jap war would have been very different. After all, India did yield some resources for the Allies and those resources would have gone to the Axis. One problem was the Muslims. The Japs treated Malay and Indonesian and Rohingya Muslims atrociously and so Islamic sentiment against them could have been aroused. (I should also mention that some of the best Chinese generals were Muslim). The Brits would certainly have tried to play this card though, I suppose, Hitler's crew too had good propagandists. The Grand Mufti had gone over to the Axis and he had a lot of influence in Iraq. Still, Muslim resistance to Japan could only be counted on in the Muslim majority west. Once Bengal fell to the Japs, there would have been a domino effect on Orissa and Bihar. A faction of Congress would have become a Fifth Column. A weak Federation would have quickly splintered because Provinces far from the front-line would not want to pay for National Defense more particularly because they suspected that the money would be stolen or that many would soon turn their coats.
From Hitler's point of view, Japan taking more and more of Hindu India would have been directly beneficial for his plans in the MENA because his agents could revive the notion of a Caliphate whose Eastern border would be the Indus. In other words, this strengthened Hitler's own strategy in Crimea, the Caucasus mountains and, ultimately his claim on the oil of Azerbaijan and the Persian Gulf.
Now to answer the question. Could India have defeated Japan? The answer is- no. Don't be silly. The Indian Army, even if cohesive, was shit. The fact is, even General Slim won only by a slim margin and needed a lot of White and Chinese and African troops to do so. But it was air support which was crucial. That's where the Americans came in. Could India have had an American alliance without the Brits? No. They were too corrupt and incompetent. If the Chinese Nationalists were bad, the Indians were worse.
Politically speaking, Hindu Bengalis may have welcomed Buddhist Japan as a defense against the Muslim majority in the East. Gandhi & Co. may have welcomed anyone at all who promised to kill and rape all and sundry because what is the point about bleating about Ahimsa if the Viceroy showed no inclination to kill even his own brother, let alone the King Emperor?
Would there have been guerilla resistance to the Japs as there was in Burma? No. The Japs would coopt those capable of any such thing. They would be the new zamindars. As Indian productivity rose- thanks to the draconian measures used by the Axis- India would have once again become a jewel in a foreign crown. Indians are still miffed with Churchill for averting this salutary outcome.
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