India and Japan have taken their partnership to an entirely new level with the signing of a historic $67 billion investment commitment, signalling a major step forward in the ties between the two countries. The deal was inked during Prime Minister Narendra Modi’s state visit to Tokyo for the 15th India-Japan Annual Summit in August 2025. The agreement spans sectors ranging from infrastructure and clean energy to digital technology and semiconductors, as well as space exploration and economic security — all aimed at turbocharging growth over the next decade while deepening strategic ties between the world’s two major powers.
Investment and Economic Cooperation
Japan pledged a massive 10 trillion yen (approximately £65.29 billion) investment in India over the next five years, to support private sector initiatives there over the next ten years. Japan will invest in infrastructure development, including key projects such as the Mumbai-Ahmedabad High-Speed Rail, which utilizes Shinkansen technology, and promote cooperation in strategic sectors like textiles, food processing, automobiles, and micro, small, and medium enterprises (MSMEs) through the India-Japan Industrial Competitiveness Partnership. The commitment represents Japan’s trust in India’s economy and its reforms aimed at improving the ease of doing business for Japanese companies.
Strategic and Security Collaboration
In addition to economic partnership, a Joint Declaration on Security Cooperation was also signed between India and Japan to address modern security challenges, underscoring the comprehensive defence cooperation between the two countries. They also initiated projects under the India-Japan Economic Security Cooperation, focusing on building supply chains for obtaining key items, including semiconductor chips, pharmaceuticals, critical minerals, and rare earth elements, as well as clean energy and information technologies. This includes promoting resilience in strategic sectors and facilitating technology cooperation, underscoring the need for protection of high-tech trade while managing export control challenges.
Technological and Digital Partnerships
The summit further upgraded the India-Japan Digital Partnership to 2.0 and is jointly working on emerging technologies such as AI, IoT, and semiconductors. Both countries announced the Japan-India AI Cooperation Initiative to facilitate further research and development, develop a roadmap for cooperation in frontier technologies such as AI, and foster industry-academia human exchange by establishing a data center in India. Furthermore, the “Action Plan for Human Resource Exchange” was released, aiming to support a two-way flow of 500,000 skilled and semi-skilled professionals over the next five years, thereby enhancing their skills on both sides.
Space and Sustainability Cooperation
India and Japan also collaborated more closely on space exploration, sending missions like Chandrayaan-2 to the lunar polar region. Both countries are committed to protecting the environment. They have made agreements to develop green energy infrastructure and technologies that will help India reach its goal of reducing greenhouse gas emissions and Japan meet its climate commitments.
People-to-People and State-Level Engagements
It is not just government-to-government cooperation, as many Indian states and Japanese prefectures have established sister-state prefecture relations (Andhra Pradesh with Hyogo Prefecture, Tamil Nadu with Kagawa Prefecture in 2006, Uttar Pradesh with Niigata Prefecture in 2014, and Gujarat with Hyogo in 2010). Such partnerships enhance regional-level cultural, economic, and technical knowledge-sharing and cultivate business-to-business as well as startup schemes, such as the Japan-India Startup Support Initiative (JISSI).
Strategic Outlook for the Next Decade
The pact is based on a Special Landmark MoU Strategic and Global Partnership , founded on shared values, mutual trust, and geopolitical interests. It outlines a 10-year plan that emphasizes economic partnership, security cooperation, technological innovation, ecological sustainability, and human mobility, with the intention of delivering prosperity and security for generations to come in both nations.
To sum up, Japan’s promise to invest $67 billion in India marks a turning point in the two countries’ relationship. It establishes a comprehensive framework for economic growth, technological advancement, and strategic cooperation, thereby strengthening the partnership as a vital pillar of regional and global stability in the Indo-Pacific region.