09-08-2025 
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Indian Prime Minister Narendra Modi secured a commitment of up to JPY10 trillion ($68 billion) in investments from Japanese Prime Minister Shigeru Ishiba, as both nations strengthen economic ties in response to global trade uncertainty driven by rising United States tariffs. This private investment forms part of a wider economic security agreement focused on strategic collaboration in artificial intelligence (AI), semiconductors, and critical minerals.
- India-Japan roadmap
- Alliance over the years
- Fusing Japan innovation with India’s expertise
- Joining forces for the Global South
This means that Japan is set to promote private sector investment in India, aiming to reach JPY10 trillion ($68 billion) over the next decade. This would be a significant boost for India’s economy, which faces a 50% tariff under U.S. President Donald Trump, the highest in Asia and at par with Brazil.
“We have set a roadmap for the next decade. Our vision focuses on investment, innovation, economic security, environment, technology, health, mobility, people-to-people ties, and state-prefecture cooperation,” Modi said during a joint press announcement with the Prime Minister of Japan.
“We have set a target of 10 trillion Yen investment from Japan in India over the next ten years. We will also give special attention to connecting small and medium enterprises and start-ups from both countries,” Modi added.
During the high-level meeting, India and Japan signed the ‘India-Japan Digital Partnership 2.0’, a comprehensive framework to enhance collaboration in digital public infrastructure (DPI), digital talent development, and joint research in advanced technologies like AI and Internet of Things (IoT).
Additionally, the two countries introduced a roadmap to deepen cooperation in cutting-edge research and innovation, and officially launched the India-Japan AI Initiative. This initiative will foster joint efforts in large language models (LLMs), workforce training, capacity building, and support for businesses and startups, contributing to the development of a trusted AI ecosystem.
India and Japan also introduced an action plan for human resource exchange. The plan aims to facilitate the two-way movement of 500,000 individuals, including the deployment of 50,000 skilled and semi-skilled Indian workers to Japan over the next five years.
The two countries also agreed on a joint ‘statement of intent’ between India’s Ministry of Science and Technology and Japan’s Ministry of Education, Culture, Sports, Science and Technology (MEXT). This declaration aims to deepen collaboration in science and technology by promoting the exchange of scientists and researchers, enhancing institutional partnerships between research organizations in both nations, and encouraging the active participation of startups and industries.
“Cooperation in the area of technology is a priority for both of us [India and Japan]. In this context, Digital Partnership 2.0 and AI cooperation initiatives are being undertaken. Semiconductors and rare earth minerals shall remain at the top of our agendas,” Modi informed.
India recently introduced its first homegrown 32-bit microprocessor, signaling a major milestone in the country’s semiconductor journey. Developed by the Indian Space Research Organisation (ISRO), the chip is specifically tailored for use in space launch vehicles, aiming to reduce dependence on foreign technology. This launch is part of India’s broader push to establish itself as a global semiconductor design and manufacturing center. With five fabrication facilities currently under development, the world’s most populous nation is leveraging its robust economic growth and consistent policy framework to attract investment and build a self-reliant chip ecosystem.
“Japan has always been a key partner in India’s growth journey. Whether it’s metros, manufacturing, semiconductors, or startups, our partnership in every area reflects mutual trust,” Modi said in his address during the India–Japan Economic Forum.
Modi highlighted that Japanese companies have invested over $40 billion in India so far, with $13 billion in private investment coming in over the past two years alone. He also emphasized that India is now the fastest-growing major economy globally and is on track to become the world’s third-largest economy soon. India contributes approximately 18% to global economic growth, Modi stated. The country enjoys strong capital market returns, a robust banking sector, low inflation and interest rates, and foreign exchange reserves nearing $700 billion.Japan a ‘Tech Powerhouse’ while India a ‘Talent Powerhouse’
Modi highlighted the complementary strengths of the two nations: Japan as a global leader in advanced technology, and India as a hub of skilled talent. He pointed out that India is making bold strides in emerging areas such as AI, semiconductors, biotechnology, quantum computing, and space exploration. According to him, the fusion of Japanese innovation and Indian expertise could drive the technological revolution of this century.
“Japan is a tech powerhouse. And, India is a talent powerhouse…Japan’s technology and India’s talent together can lead the tech revolution of this century,” Modi said.
During his visit to Japan’s Miyagi prefecture, Modi reportedly toured a semiconductor production equipment facility operated by Tokyo Electron, underscoring India’s urgent push to deepen technological cooperation with Japan. The visit highlights Modi’s strategic focus on strengthening ties with key partners as India accelerates its efforts to build a self-reliant, ‘Make in India’ ecosystem.
This renewed emphasis on bilateral collaboration comes at a critical moment, as India recalibrates its geopolitical strategy amid recent strains in its relationship with the U.S. Modi’s outreach signals a clear intent to bolster alliances with trusted nations, like Japan, to ensure economic and technological resilience in a rapidly shifting global landscape.
In his speech, Modi pointed out the remarkable success of the India-Japan collaboration in the automobile industry, calling it a model of effective partnership. He expressed confidence that this synergy can be extended to other critical sectors such as robotics and semiconductors. Modi also stressed the potential for India and Japan to jointly play a transformative role in uplifting the Global South, with a particular focus on contributing to the development of Africa.
Inviting Japanese businesses to deepen their engagement with India, Modi said, “Come, Make in India, and Make for the World.” Referring to well-established companies like Suzuki and Daikin, Modi encouraged others to follow in their footsteps, suggesting that these success stories could serve as blueprints for new ventures.
Japan, facing significant economic pressure from steep tariffs imposed by the U.S.—particularly impacting its vital automobile sector—must diversify its trade partnerships to sustain growth momentum. By strengthening ties with India, Japan may not only cushion the impact of protectionist trade policies but also tap into one of the world’s most promising growth markets for long-term stability and mutual prosperity.
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