Japan to invest 10 trillion Yen in India over the next decade on AI, rare earths, and carbon credits

Japan plans to invest 10 trillion Yen (nearly ₹6 trillion) in India over the next decade, as Prime Minister Narendra Modi visited Tokyo for India’s annual bilateral summit with Japan.

“Today, we have laid a strong foundation for a new and golden chapter in our Special Strategic and Global Partnership. We have set a roadmap for the next decade,” PM Modi said in a media statement on Friday. 

The Prime Minister and his Japanese counterpart, Shigeru Ishiba, signed long-term agreements to work in the fields of artificial intelligence, semiconductors, rare earth minerals and carbon credits.

India is working to strengthen its economic ties with Japan and other trading partners, including China, amid economic turbulence caused by the US’s 50% tariffs on Indian goods, the highest globally.

“Our vision focuses on investment, innovation, economic security, environment, technology, health, mobility, people-to-people ties, and state-prefecture cooperation. We have set a target of 10 trillion Yen investment from Japan in India over the next ten years,” PM Modi added.

About the deal

India and Japan launched the Economic Security Cooperation Initiative, which covers artificial intelligence, a digital partnership programme, and joint development of semiconductors and rare earth minerals.

Both parties also finalised a Joint Declaration on Security Cooperation for joint efforts towards contemporary defence challenges.

Japan, a major trade partner, is the fifth-largest investment source for India, with foreign direct investment from Japan during 2000-2024 adding up to about $43.1 billion, per government data.

Bilateral trade between India and Japan stood at $22.85 billion in 2023-24.

Shigeru Ishiba said in the joint statement that Tokyo will promote cooperation in space, next-generation mobility and the Mumbai-Ahmedabad high-speed railway. 

Japan made an investment target of ¥5 trillion in India during 2022-26, which was achieved two years ahead of schedule.

PM Modi said the new partnership between India and Japan will open more doors for trade, tourism, education, and cultural exchanges.

He also said the two nations were working on high-speed trains and making huge progress in areas like ports, aviation, and shipbuilding under the Next Generation Mobility Partnership.

PM Modi added that over the next 5 years, the two countries would make an exchange of 500,000 people, including an estimated 50,000 skilled Indians contributing to Japan’s economic growth.

For the Mumbai-Ahmedabad high-speed rail project, both nations agreed to work towards the “commencement of operations at the earliest and cooperate on the introduction of the latest Japanese Shinkansen technology in India”, according to the joint statement.

“Together, we can make a significant contribution to the development of the Global South, especially Africa,” PM Modi said, inviting Japanese companies to invest in India. “I urge all of you. Come, make in India, make for the world. The success stories of Suzuki and Daikin can become your success stories too.”

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