India-Japan Summit: Deepening economic ties and strategic investment opportunities for next decade

As Prime Minister Sanae Takaichi starts her 3-day visit to India tomorrow as part of the 16th India-Japan Summit in New Delhi, the economic relationship between the 4th-largest economy by nominal GDP and the 6th-largest is deep and consequential. Japan has been a trusted partner in India's infrastructure journey, with projects like Mumbai-Ahmedabad High-Speed Rail Corridor, which is one of Japan's largest recipients of ODA. Over 1,400 Japanese companies have invested over $40 bn in India, and this is growing, with a revised private investment target of ¥10 tn (about ₹5.8 lakh cr) over the next decade.

Japanese companies are partnering India to shape the automotive and mobility ecosystem, with Suzuki transforming personal mobility. Honda and Yamaha have helped build categories and aspirations through their quality and technological prowess.

Toyota brought globally benchmarked manufacturing systems and quality practices, while Denso has played a key role in India's automotive component ecosystem, building globally competitive automotive supply chains. In 2024-25, the Sumitomo Mitsui Banking Corporation-YES Bank deal was the largest cross-border investment in India's financial services sector. Sumitomo Mitsui Financial Group (SMFG) infused $318 mn into SMFG India Credit, while Mitsubishi UFJ Financial Group (MUFG) invested over $300 mn in DMI Finance.


The India-Japan partnership now seeks greater participation in semiconductors, critical minerals, AI, emerging technologies, information and communication technology, clean energy, engineering, and pharmaceuticals. The two countries can forge a mutually complementary relationship. Through open innovation, Japanese hardware and Indian software, Japanese tech and Indian mass production, and efficient supply chains combining Japanese operational excellence and India's scale, both can benefit significantly. Japan should view India as a strategic long-term investment opportunity with embedded globally competitive export potential.

Open innovation is not optional but strategic. Japanese OEMs can anchor R&D centres in India not just for cost but also for capability. Local talent is deeply aligned with needs of next-generation mobility software development, AI, embedded systems, data analytics, cybersecurity and digital engineering. A vibrant and dynamic ecosystem can be combined with Japan's strengths in precision manufacturing, quality excellence and long-term technological vision. This creates a powerful opportunity for open innovation.

The partnership can move from vendor relationships to innovation partnerships, from 'Make in India' to 'Invent with India', from supply chains to value networks, and from transactional collaboration to technology sovereignty. India offers scale. Japan offers depth. Together, they can create lasting trust.

Japan's commitment to precision and process complements India's entrepreneurial energy and instinct for navigating crisis and volatility. While Japan is an ageing society, India has a large and youthful population. There is potential to develop skilled manpower in India for employment in Japan, helping to fill its labour gap.

As the India-Japan partnership seeks new horizons, deepening the cultural and societal relationship is important. Indian tourism to Japan has risen. There is an increased appetite for Indian food and chai in Japan, and for sushi and Japanese cuisine in India. A mutual understanding of each other's work culture and values would go a long way. For India to become a key source of skilled manpower, soft-skills training must extend beyond language to encompass attitudinal and behavioural characteristics.

The partnership may prove to be greater than the sum of its investments. Together, the two countries can build on trust with respect, humility and patience - guiding values that ensure its sustainability. Far beyond lithium, hydrogen or code, this would be the most strategic resource that India and Japan can foster.

The writer is chairperson-MD,Kirloskar Systems