NEW DELHI: Japan on Friday set a target of 10 trillion yen ($68 billion) in private investments in India over a decade as Prime Minister Narendra Modi and his counterpart Shigeru Ishiba finalised a 10-year roadmap to deepen economic cooperation in vital areas such as technology, digitalisation and rare earths against the backdrop of uncertainty created by the trade policies of the US administration.
Modi and Ishiba launched the Economic Security Initiative at their annual bilateral summit in Tokyo to ensure supply chain resilience in strategic sectors such as semiconductors, telecom, pharmaceuticals and emerging technologies, and also finalised a Joint Declaration on Security Cooperation to guide joint efforts to respond to contemporary defence challenges.
Economic and trade cooperation was the focus of the summit, held amid the geo-economic churn affecting economies worldwide due to the trade and tariff policies of the Trump administration in the US. Both Modi and Ishiba didn’t directly refer to the US in their public remarks but spoke about the need to strengthen the international order and protect national priorities.
“We both agree that as the world’s two largest economies and vibrant democracies, our partnership is extremely important not only for our two countries but also for global peace and stability,” Modi said at a joint media interaction. “Strong democracies are natural partners in shaping a better world.”
He added, “The India-Japan partnership is rooted in mutual trust, reflects our national priorities, and is shaped by our shared values and beliefs. Together, we carry a common dream of peace, progress and prosperity of our peoples and for the world.”
Ishiba said, “We share the responsibility to strengthen [the] international order as we see increasing opaqueness in international circumstances. Japan and India need to bring their strengths together for the peace and stability of the region.”
Both PMs referred to Japan’s target of 10 trillion yen in private investments in India over 10 years, with Ishiba saying that Tokyo would promote cooperation in space, next-generation mobility and the Mumbai-Ahmedabad high-speed railway, a flagship project for the two sides. Japan’s earlier investment target of 5 trillion yen ($34 billion) during 2022-26 was achieved two years ahead of schedule.
According to a joint statement, Ishiba requested the Indian side to continue its regulatory and other reforms to allow Japanese companies to deepen their supply chains in India. Modi “recalled his intent to carry out additional regulatory and other reforms to facilitate investment into India and invited more Japanese businesses to avail of these,” the statement said.
Modi said at the media interaction that their discussions laid the foundation for a new chapter in the bilateral special strategic and global partnership, which was finalised in 2014. “We have prepared a roadmap for the next decade. At the centre of our vision are investment, innovation, economic security, environment, technology, health, mobility, people-to-people exchanges and state-prefecture partnership,” he said.
The new Economic Security Initiative, he said, will provide a comprehensive approach towards critical and strategic areas. Cooperation in high technology is a priority for both sides and will include the Digital Partnership 2.0 and AI Cooperation Initiative.
Besides the high-speed rail project, other areas of focus under a Next Generation Mobility Partnership will be ports, aviation and shipbuilding. In the space sector, the Indian Space Research Organisation (ISRO) and the Japan Aerospace Exploration Agency (JAXA) finalised an agreement to cooperate for the Chandrayaan-5 mission.
Modi reiterated an invitation to Japanese businesses to invest in India that he made at an economic forum earlier in the day, saying they could use the country to “make for the world”. He added, “We believe Japanese technology and Indian talent are a winning combination.”
He also highlighted an action plan for human resource exchanges that will facilitate exchanges of 500,000 people from both sides in various fields over five years. “In this, 50,000 skilled Indians will actively contribute to Japan’s economy,” he said.
Ishiba noted that despite the competence of Indian STEM talents, the number of Indian students in Japan is less than 2,000. “We need more high-skilled talents from India for the growth of the Japanese economy and for the vitalisation of local communities,” he said, adding the two sides will finalise an action plan for a “bigger flow of mutually complementary talents in both directions”.
Japan and India, Ishiba said, “should take advantage of each other’s strengths to bring solutions to our challenges”, while the Economic Security Initiative will promote investments and innovation that will allow Japan’s economy to grow by tapping India’s vast market. Tokyo’s investments and technology transfers will also bolster New Delhi’s “Make in India” and “Make for the World” initiatives, he said.
As part of the Economic Security Initiative, the two PMs tasked their foreign ministries to accelerate policy-level exchanges to identify concrete outcomes and projects in strategic sectors, the joint statement said. Both sides will also work towards protecting high-tech trade and mutually easing export control challenges.
The joint statement noted that in the case of the Mumbai-Ahmedabad high-speed rail project, both sides agreed to work towards the “commencement of operations at the earliest and cooperate on the introduction of the latest Japanese Shinkansen technology in India”.
The Indian side appreciated Japan’s offer to introduce the E10 Shinkansen, which runs on the Japanese signalling system, in India in the early 2030s. “To this end, it was concurred to immediately commence work necessary for early installation of the signalling, including the Japanese system, as well as for the introduction of the General Inspection Train (GIT) and one set of E5 series Shinkansen rolling stock,” the joint statement said.
Defence and security cooperation too figured prominently in the discussions between the two PMs, against the backdrop of China’s continuing aggressive behaviour in the South China Sea and East China Sea. Modi and Ishiba pledged to work jointly to uphold a free, open, peaceful, prosperous and rules-based Indo-Pacific.
“We share common concerns on terrorism and cybersecurity. Our common interests are linked to defence and maritime security. We have decided to further strengthen mutual cooperation in the field of defence industry and innovation,” Modi said.
Japan and India, Ishiba said, share fundamental values and need to maintain a free and open Indo-Pacific region based on international order and the rule of law. Bilateral security cooperation has deepened dramatically over the past two decades, as reflected by the agreement between the two sides on the Unicorn or united combined radio antennae project for the Indian Navy. Such collaboration will be bolstered by the Joint Declaration on Security Cooperation, he said.
The two PMs expressed “serious concern” at the situation in the East China Sea and the South China Sea, according to the joint statement, and reiterated their “strong opposition to any unilateral actions that endanger the safety as well as freedom of navigation and overflight, and attempt to change the status quo by force or coercion”. In a reference to China’s activities in the South China Sea, the PMs also “shared their serious concern over the militarisation of disputed features”.