Japan expected to double investment target for India

JApan is expected to duplicate its investment funds place for bharat from an before goal of 5 trillion yen ($34 billion) and the two sides will finalise several agreements to boost cooperation in areas such as defence and technology during Prime Minister Narendra Modi’s visit this week, people familiar with the matter said on Tuesday.Modi’s visit during August 29-30 will see him holding an annual summit with Japan’s Prime Minister Shigeru Ishiba and participating in a business forum in Tokyo on the first day. On the following day, the two PMs will travel to Sendai city on the Shinkansen or high-speed railway to visit a semiconductor facility and meet governors of Japan’s prefectures, the people said on condition of anonymity.Japan’s earlier target of investing 5 trillion yen over five years to finance public and private projects, set during former prime minister Fumio Kishida’s visit to India in 2022, was achieved two years ahead of schedule and Tokyo has been looking to enhance the figure, the people familiar with the planning for the visit said.The planned doubling of the investment target reflects Japan’s continuing confidence in the Indian economy despite the impact of tariff policies of the Trump administration in the US and other domestic factors. In March, ArcelorMittal Nippon Steel India announced its decision to acquire land in Andhra Pradesh to build a new integrated steel mill, while Toyota plans to set up a new production facility in Aurangabad.However, in addition to encouraging investments into India, the two sides will also work to improve the business environment, the people said. Japanese firms continue to have concerns about India’s tax structure, complicated arbitration of tax-related matters, and lack of predictability in regulations and quality control orders, the people added.The trip by the two PMs in the Shinkansen reflects Japan’s commitment to the project for building India’s first bullet train service between Mumbai and Ahmedabad. The 508km project has already faced several delays and cost overruns and the people said the first 50km in Gujarat is expected to be operational in 2027 and the remainder by 2029.In addition to the expansion of the investment target, the two sides are expected to finalise at least five agreements covering three pillars of bilateral cooperation – defence and security, economy, technology and innovation, and mobility and people-to-people exchanges, the people said. Dozens of business agreements are expected to be signed at the business forum to be attended by the PMs.The defence and security cooperation has been spurred by uncertainty on the international stage and security challenges faced by both countries, the people said. The two sides are expected to upgrade the Declaration on Security Cooperation of 2008 – which now covers counterterrorism, information exchanges and maritime cooperation – to include defence exercises, policy consultations and transfer of technology.Following the Unicorn project for co-developing the “Unified Complex Radio Antenna” or a common radar mast for Indian warships, the two sides are eyeing several other initiatives focused on hi-tech components and systems for the Indian armed forces, the people said.The two sides are also expected to launch an economic security initiative, with the focus on semiconductors, assured supply of rare earth minerals, AI and telecommunications, and a digital partnership centred around the manufacturing of semiconductors and creation of public infrastructure, the people said.In the field of people-to-people exchanges, the two sides are expected to launch a new mobility initiative that will allow skilled Indian workers and professionals to meet Japan’s growing labour needs in view of its ageing population, the people said. Existing mechanisms in this field will be made more accessible to Indian workers and the two sides will focus on creating an ecosystem for skilling and exchanges.Foreign secretary Vikram Misri told a media briefing that this will be Modi’s first stand-alone visit to Japan since 2018 – though he travelled to Tokyo for multilateral events – and the annual summit will allow the two PMs to review bilateral ties, exchange views on regional and global issues, and launch several new initiatives to “build greater resilience in the relationship and respond to emerging opportunities and challenges”.Misri said the Indian Navy and Japan’s Maritime Self-Defense Force are exploring cooperation in ship maintenance in India, while the Indian Space Research Organisation (Isro) and the Japanese Space Agency are working on LUPEX or the Lunar Polar Exploration Mission.Modi’s visit will open fresh avenues of cooperation and reaffirm “our shared commitment to peace, prosperity and stability, both for the two countries as well as in our shared Indo-Pacific region and beyond”, he said.