Written by The Banking Post
Japan has pledged to invest $68 billion in India, marking a major boost to bilateral ties during Prime Minister Narendra Modi’s visit to Tokyo on Friday.
Japanese Prime Minister Shigeru Ishiba said India’s vast market held enormous potential for Japanese companies. “Incorporating its vibrancy will help drive the growth of Japan’s economy,” he told reporters.
Under the new agreement, Japan will raise its investment in India to 10 trillion yen ($68 billion) and launch a cooperation initiative in semiconductors and artificial intelligence.
Security ties strengthened
Both countries also agreed to expand military cooperation. According to Kyodo, Tokyo and New Delhi will step up joint drills between Japan’s Self-Defense Forces and the Indian Armed Forces.
In a joint statement, the two nations expressed “serious concern” over tensions in the East China Sea and South China Sea.
“As the international situation grows more uncertain, Japan and India must join hands for peace and stability in the region,” Ishiba said. Modi added that both nations are committed to a “free, open, peaceful and rules-based Indo-Pacific.”
Economic and trade backdrop
Bilateral trade between the two nations is valued at over $20 billion annually, though heavily tilted in Japan’s favour.
Speaking at a Tokyo business forum, Modi said India and Japan would “shape the Asian Century,” positioning India as a springboard for Japanese businesses to the Global South.
Both nations are grappling with tariffs imposed by US President Donald Trump. Washington this week introduced a 50% levy on Indian imports, while Japan’s auto industry still faces 25% tariffs as a July trade deal remains pending.
Infrastructure and future projects
On Saturday, Modi and Ishiba will tour a semiconductor facility and a plant producing shinkansen bullet trains. Japan is expected to help India realise its ambitious plan for a 7,000-kilometre high-speed rail network by 2047, the centenary of Indian independence.
The first such project, linking Mumbai and Ahmedabad, has long suffered from delays and cost overruns.
Ahead of China visit
Modi travels to China next for the Shanghai Cooperation Organisation summit, where he will join Chinese President Xi Jinping and Russian President Vladimir Putin.
The trip will be Modi’s first to China since 2018. Tensions between the Asian giants peaked after a deadly border clash in 2020, but ties began to ease last October when Modi and Xi met in Russia.
