Veriton Investment

Modi to Secure Japan Investment With Pledge to Deepen Ties

(Bloomberg) --

Indian Prime Minister Narendra Modi and Japanese Prime Minister Shigeru Ishiba pledged deeper economic ties ahead of a summit meeting later on Friday, as they partner up amid trade uncertainty brought on by soaring US tariffs.

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“Japan and India are strategic partners that share universal values including freedom, democracy, and the rule of law,” said Ishiba at a joint India-Japan economic forum held Friday afternoon, adding that the two economies are building a strong and stable supply chain.

Modi also touted the possibility of partnerships in energy, trade, and technology, calling Japan a “tech powerhouse”. “Japan’s technology and India’s talent can lead the global technology revolution,” he added.

Modi is expected to secure investment pledges from Japan of more than ¥10 trillion ($68 billion) during his two-day trip to the country, people familiar with the matter said, as he seeks to bolster the economy after President Donald Trump slapped India with a 50% tariff, the highest in Asia.

The two sides are also expected to sign an economic security pact covering cooperation on semiconductors, critical minerals, and artificial intelligence, the officials in New Delhi said, asking not to be identified to discuss matters that are still private.

The pledge for closer ties comes as India explores a shift in its geopolitical balance and seeks to shore up support from friendly nations after relations with the US soured.

As part of that shift, Modi will travel to China for the first time in seven years after his trip to Japan and is expected to meet with leader Xi Jinping, in a move that rekindles ties with Beijing after a 2020 border clash that soured relations.

Japan, whose key auto industry has been hit hard by Trump’s tariffs, is also looking to boost trade with like-minded nations as it seeks to tap into India’s vast market and young demographic.

The forum marked over 150 MOUs signed between private companies, in industries ranging from cars, steel to semiconductors.

Modi said in a statement Thursday that the two sides will focus on “shaping the next phase” of their partnership. “We would endeavor to give new wings to our collaboration, expand scope and ambition of our economic and investment ties, and advance cooperation in new and emerging technologies, including AI and semiconductors,” he said in a statement.

During Modi’s visit to Japan, the two sides are also expected to step up plans on defense cooperation, with New Delhi focusing on transfer of technology and jointly developing military hardware, the people said. India and Japan are working to develop a sophisticated sensor for seamless communication while increasing the stealth features of warships.

India is the second-largest importer of arms after Ukraine — according to data from the Stockholm International Peace Research Institute. It’s trying to ramp up domestic weapons manufacturing and acquire technology from nations such as France, Germany, Japan and the US.

--With assistance from Yuko Takeo and Akemi Terukina.

(Updates with comments from Ishiba, Modi, additional background.)