Forging the Future Together: The Strategic Arc of India-Japan Relations
India and Japan’s “Special Strategic
and Global Partnership” has matured into one of Asia’s most consequential
bilateral relationships. Anchored in shared values and reinforced by robust
institutional frameworks, this partnership spans economic expansion, strategic
convergence, technological cooperation, and cultural connectivity. As India
surpasses Japan in GDP and asserts itself globally, the deepening Indo-Japanese
cooperation reflects a shared vision for stability, resilience, and innovation
across the Indo-Pacific.
Introduction: Foundations of Trust
and Strategic Vision
The bilateral relationship between
India and Japan reflects an enduring convergence of civilizational ethos and
modern strategic interests. Celebrating a decade of their elevated partnership
in 2024, the nations reaffirmed their commitment to democratic values,
multilateralism, and regional stability through high-level engagements at the
G7, Quad, and bilateral summits.
Economic and Trade Expansion:
Unlocking Synergies
Trade Diversification Imperatives
While FY2023-24 trade touched US$
22.85 billion, India’s exports remain modest at US$ 5.15 billion, placing Japan
only 24th among Indian export destinations. With India’s strengths in
manufacturing, agritech, and digital services, and Japan’s edge in precision
technology, a focused effort to diversify trade can unlock significant untapped
potential.
Investment Acceleration
Cumulative Japanese FDI into India
(US$ 43.2 billion) marks Japan as the fifth largest investor. Intentions to
mobilize JPY 5 trillion (~US$ 30 billion) over five years underscore trust and
alignment. Sectors such as green hydrogen, digital infrastructure, and
industrial manufacturing present new frontiers.
Japan remains the largest foreign
holder of U.S. Treasury securities, indicating its appetite for stable
long-term investments. With India’s stellar economic performance over recent
years and its rise to the fourth-largest global economy, Japanese investors are
increasingly viewing India as a destination to diversify beyond
dollar-denominated assets.
Supply Chain and Strategic
Manufacturing
The COVID-19 pandemic highlighted the
need for resilient supply chains. Japan's “China+1” strategy aligns with
India's competitive cost structures, demographic strength, and expanding
industrial zones. MNCs—including Chinese firms—are actively exploring India for
relocation and expansion, with Japanese corporates leading in semiconductors,
robotics, and clean tech.
In a promising development, over 30
companies from Japan’s battery ecosystem visited India last week, signaling
strong intent to scale operations. JETRO is well-positioned to advise
industrial giants—Mitsui, Sumitomo, Mitsubishi, Toyota, Honda, Sony, Hitachi,
National—on expanded manufacturing footprints in India. It is imperative that
brands like National, rather than limiting their product range, seize market
momentum to broaden offerings.
Startup, Innovation & Digital
Collaboration
Platforms under the India-Japan
Digital Partnership (IJDP) foster VC-backed innovation. JBIC’s support of
early-stage ventures and JETRO’s Bengaluru Startup Hub illustrate synergies
across gaming, AI, cleantech, and IoT.
Infrastructure & Capital Market
Deepening
Japan’s ODA portfolio remains
instrumental—ranging from metro systems to the Mumbai-Ahmedabad High-Speed
Rail, which embodies advanced technology and mutual ambition.
Moving forward, JBIC and JICA can be
engaged more deeply in financing Indian infrastructure through Real Estate
Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Their
strategic involvement can include equity stakes in institutions such as NABFID,
IIFCL, REC, PFC, and IREDA—catalyzing green and digital transitions. Bilateral
collaboration with Indian banks to offer credit lines for Japanese enterprises
would further incentivize operational expansion.
Strategic and Security Partnership:
Upholding Regional Stability
Dialogue Platforms and Exercises
The 2+2 Ministerial Dialogue and
Defence Ministerial meets signal coordinated policymaking. Regular joint
exercises—Dharma Guardian, JIMEX, and Veer Guardian—strengthen operational
interoperability.
Maritime & Defence Technology
Cooperation
From shared maritime domain awareness
under Quad’s IPMDA to the co-production of “Unicorn Masts,” strategic
technology transfer is evolving. Agreements on defence equipment cooperation
and reciprocal logistics lay the ground for deeper collaboration.
Cyber and Space Security
The militarization of cyberspace and
outer space requires joint norms and technologies. Working groups focused on
cybersecurity, satellite collaboration, and AI-enabled defence applications
form the next frontier.
Science, Technology, and Innovation:
A Future-Facing Agenda
Joint Research Endeavours
The 2025 "India-Japan Science,
Technology and Innovation Exchange Year" rejuvenates R&D cooperation
in AI, quantum computing, and biotechnology. Dedicated centres and funding
mechanisms can ensure continuity and scale.
Climate and Green Technology
The India-Japan Fund (US$ 600
million), spearheaded by JBIC and NIIF, invests in renewable energy and
circular economy projects. Hydropower, clean hydrogen, and smart grids reflect
shared climate commitments.
Semiconductor and Digital Ecosystem
As semiconductors underpin economic
security, bilateral MoUs and policy dialogues signal joint ambitions for robust
supply chains. Japanese firms are actively exploring India's incentive-led
semiconductor ecosystem.
Space Exploration
India and Japan’s complementary
strengths—in satellite tech, navigation systems, and lunar missions—offer
fertile ground for bilateral and multilateral collaboration, including with
Quad partners.
People-to-People and Cultural
Connectivity: Building Enduring Bonds
Educational Linkages
Over 665 academic partnerships and
growing student exchange programs (e.g., JENESYS, High School Exchange) nurture
long-term intellectual and professional ties.
Tourism and Language Integration
Indian arrivals to Japan surged to
233,100 in 2024, with historic monthly records in 2025. Expanding language
learning opportunities and easing visa rules can further this momentum.
Youth Engagement
Japan-East Asia Network of Exchange
for Students and Youths (JENESYS) and state-level outreach—e.g., visits by
Chief Ministers—deepen sub-national collaboration and youth mobility.
Regional and Global Coordination:
Strategic Multilateralism
Engagement through Quad, G20, and
IPOI
India and Japan jointly champion a
Free and Open Indo-Pacific (FOIP) through the Quad’s maritime and technological
initiatives. Japan’s leadership in the IPOI’s Connectivity pillar is
particularly impactful.
Third Country Cooperation
Trilateral engagements in Africa and
Southeast Asia—where India’s industrial capabilities complement Japan’s
financing and technology—expand strategic depth.
Institutional Catalysts: JETRO, JICA,
JBIC
Together, these institutions enable
economic integration and strategic depth:
JETRO facilitates market access,
identifies sectoral opportunities, and fosters startup collaboration. It can
now play an expanded advisory role for Japan’s marquee corporations on scaling
in India.
JICA anchors development cooperation with
over INR 440,000 crore in committed ODA and transformative projects in urban
transport, water, and logistics.
JBIC strategically finances digital
infrastructure, industrial manufacturing, and renewables. It is well-positioned
to enter India’s infrastructure financing landscape via InvITs, REITs, and
equity stakes in critical PSUs.
Their coordination underpins the
comprehensive architecture of the bilateral partnership, with growing appetite
to invest not just in greenfield infrastructure, but also in India’s robust
institutional ecosystem.
Conclusion: Towards a Resilient and
Inclusive Indo-Pacific
The India-Japan Special Strategic and
Global Partnership is no longer an aspiration—it is an operational reality.
Anchored in mutual respect and strategic convergence, the partnership is
shaping regional norms, accelerating sustainable development, and fostering
technological self-reliance. With shared institutions, visionary leadership,
and growing citizen-to-citizen connections, India and Japan are forging a
future that balances ambition with responsibility—charting a bold course for
the Indo-Pacific and beyond.
