India, Japan Partner to Strengthen India's Semiconductor Ecosystem

• Modi’s Japan visit boosts India’s semiconductor ecosystem collaboration.
• Japan supplies 50% of global semiconductor materials, commits to Indian manufacturing.
• India’s semiconductor investments rose from 22 to 58 projects in recent years.

Prime Minister Narendra Modi's visit to Japan, was an important advancement of India-Japan partnership in advanced technologies and semiconductors in particular, according to Kazuya Nakajo, Executive Vice President of the Japan External Trade Organisation (JETRO).  Modi's itinerary included a tour of Tokyo Electron, a leading Japanese semiconductor equipment manufacturer, highlighting that Japan produces 50% of semiconductor materials and one-third of machinery for semiconductors globally.

Nakajo emphasized Japan's dedication to the manufacturing base in India, adding that the timing of the trip was a boost for Japanese business to increase their confidence, being the first such trip made to Japan from India in person since any COVID disruption to travel.

Modi emphasized that India was focused on developing a solid technology foundation, with semiconductors being a linchpin technologies (aka a focal technologies) for advanced manufacturing. Nakajo underscored India's issue of excessive reliance on imported goods, one-third of which came from China, pushing India, to develop policies to build "a resilient, self-reliant supply chain."

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Capacity investment in India's semiconductor sector increased from 22 projects (2017-2020) to 58 (2021-2024). There is significant factors such as India's market opportunity, as well as India's "friend" relationships with Japan, working in India's favor. The agreements made recently would extend cooperation into AI, quantum technologies, and space. The global trend toward building resilient supply chains has been incorporated into these agreements.

In his remarks, Nakajo recognized Japan's delayed recognition of India's capabilities in comparison to Europe and the U.S. However, he acknowledged the recent moves to create an ecosystem to support Indian professionals, with Japanese firms considering global innovation centers in India. Modi characterized the visit as productive and thanked Japanese Prime Minister Shigeru Ishiba for his kindness and hospitality, noting it is beneficial for both countries.