Japan To Double India Investment Target To $68 Billion: Focus On Chips, AI

Japan is reportedly planning to double its private-sector investment in India to 10 trillion yen ($68 billion) over the next decade. Japanese Prime Minister Shigeru Ishiba is set to confirm the new target during Prime Minister Narendra Modi's two-day Tokyo visit beginning Friday, according to Japanese media reports.

During PM Modi's visit, the two Asian nations also intend to revise their joint declaration on security cooperation for the first time in 17 years, according to a report by Nikkei Asia. The renewed agreement is expected to reflect contemporary priorities and to be responsive to the current security challenges facing them.

The two governments will also launch an Economic Security Initiative, a new bilateral cooperation framework to address economic security challenges, such as ensuring stable supplies of critical materials and guaranteeing the safety of core infrastructure.

Inside The New Investment Plan

The new plan will expand upon Japan's current goal of investing 5 trillion yen over five years, which was announced in March 2022 by then Prime Minister Fumio Kishida during his visit to India. Under it, Tokyo is reportedly planning to prioritise investment in key areas including semiconductors, critical minerals, telecommunications, clean energy, pharmaceuticals and scientific fields such as artificial intelligence. 

Prime Minister Shigeru Ishiba and Indian Prime Minister Narendra Modi are expected to confirm the new target during their meeting in Tokyo on August 29, according to a source-based report in Japan's 'The Asahi Shimbun' newspaper.

Moreover, Japan is also hoping to tap into Indian talent and hire more specialist workers in Japanese companies. 

"India possesses the world's largest population and a wealth of talented engineers. Tokyo plans to focus on educating talent that can serve as a bridge to help Japanese companies set up shop in India," a report by Nikkei Asia said.

In the past five years, as many as 25,000 Indian specialists have joined Japan's workforce. Ishiba has said he plans to double that figure to '50,000' in the next five years.

Furthermore, an AI Cooperation Initiative will be established to specifically advance collaboration in AI technology and startups, according to a report by The Asahi Shimbun.

Per the report, a project called Digital Partnership 2.0 will be developed to expand economic collaboration beyond manufacturing to encompass emerging technological fields, such as semiconductors, AI and startups.

In the clean energy sector, Japan and India will issue a Joint Statement on Energy Dialogue aimed at promoting cooperation to simultaneously achieve decarbonisation, economic growth and energy security.

The two countries are expected to announce the introduction of the Joint Crediting Mechanism, a bilateral system that allows Japan to count carbon emissions cuts achieved by spreading its greenhouse gas-reducing technologies in India toward its reduction targets.

As part of India's Mumbai-Ahmedabad bullet train project, which is being implemented with Japanese assistance, the two Prime Ministers are expected to reach an agreement on the introduction of the next-generation E10 series bullet train under development by East Japan Railway Co.

PM Modi will attend meetings where Japanese and Indian companies are expected to sign more than 100 memoranda of understanding, including those on investment projects.