Japanese Prime Minister Sanae Takaichi is heading to India for a three-day trip starting Wednesday to bolster economic ties and align on security cooperation with counterpart Narendra Modi as the two Asian powers seek to wean off dependence on China.
Discussions are set to span semiconductors, critical minerals, and energy – crucial areas as the global race to dominate artificial intelligence heats up, rare earths are increasingly weaponized and the war in Iran highlights supply vulnerabilities.
For Modi, the visit is a balancing act: Deepen ties with Tokyo without derailing a cautious effort to repair relations with Beijing. For Takaichi, the prospect of greater cooperation with New Delhi offers a counterbalance to worsening relations with China, which this week further tightened controls on exports to Japan that have both military and civilian use.
‘Cooperation with India-a nation with which we share the same fundamental values and strategic interests-is becoming increasingly important as geopolitical uncertainties deepen,’ Takaichi said on Wednesday in Tokyo, ahead of her flight to New Delhi.
‘During this visit, I hope to work with Prime Minister Modi on furthering concrete cooperation on three areas: deepening strategic cooperation between Japan and India in the context of the broader international situation, furthering cooperation on economic security, and fostering collaboration to ensure businesses can invest and innovate,’ she added.
For India, the visit carries significance on several fronts. Despite the warm personal rapport between Modi and US President Donald Trump, New Delhi’s relationship with Washington has become increasingly unpredictable. That has prompted India to deepen engagement with other advanced economies such as Japan, Germany and France for technology, investment and supply-chain partnerships needed to sustain long-term economic growth.
For Japan, India is a crucial partner in carrying out its foreign policy vision of achieving a ‘Free and Open Indo-Pacific.’ The two nations have existing agreements on the transfer of defense equipment and have held multiple joint foreign and defense minister meetings.
Energy resilience is another area of shared concern for Takaichi and Modi-both leaders of large economies that are reliant on energy imports and susceptible to global supply disruptions. The war in Iran and the effective closure of the Strait of Hormuz has hit India’s economy, while Japan’s ample oil reserves gave it more of a buffer.
While tensions between Beijing and New Delhi have eased in recent months as they discuss marking out a disputed border, India still has concerns over China’s expanding naval presence in the Indian Ocean and its dominance of critical minerals exports.
Tokyo’s relationship with Beijing is far frostier. Relations between the two Asian powers have deteriorated since November, when Takaichi speculated over the potential for military action in relation to Taiwan.
As part of Japan’s most ambitious economic-security push in years, Takaichi’s administration this week launched what’s been billed as the Japanese equivalent to the Committee on Foreign Investment in the US, or CFIUS.
Still, it’s too early to say whether any Tokyo-New Delhi alignment on issues such as semiconductors, critical minerals, and energy can meaningfully impact the regional geo-strategic and economic realities.
India’s industrial ambitions hinge on access to Chinese technology and rare earth magnets in order to meet goals in the electric vehicle, renewable energy and consumer electronics sectors. Japan also remains highly dependent on Beijing for rare earth imports, with China accounting for around 70 percent of its supply as of 2024.
The deepening Japan-India ties extend into the private sector too. Last year, Japan pledged it would encourage private companies to invest in India with a target of reaching 10 trillion yen ($61 billion) over the next 10 years.
Japan is also the largest bilateral donor to India, offering development loans of 439 billion yen in 2024-2025. The funds have been used on projects ranging from a subway in New Delhi to a bullet train under construction linking Mumbai and Ahmedabad using Japan’s ‘Shinkansen’ technology.
The two governments are also considering establishing a local currency settlement mechanism that would allow direct transactions between the yen and rupee, according to a report by the Nikkei newspaper. That would mean transactions wouldn’t have to be made via the dollar, making it cheaper and quicker to send money, the report said.
Such a move would align with the broader direction laid out in a joint vision document issued last year