Japan, India Forge Next-Gen Business Ties Amid Global Uncertainty

• Modi and Ishiba showcased India–Japan ties with the Mumbai–Ahmedabad bullet train project
• 170 MOUs were signed, with focus on next-generation sectors
• A two-way exchange of 500,000 students/workers was agreed, while India will serve as Japan’s base

Indian Prime Minister Narendra Modi and Japanese Prime Minister Shigeru Ishiba reiterated how much they value the development of their partnership during Modi's two-day visit to Japan.

The pair's time riding together in the cockpit of the shinkansen from Tokyo to Sendai on August 30 symbolizes their partnership, with the Mumbai-Ahmedabad High Speed Rail project as the main priority.

India is only the second country, after Taiwan, to gain knowledge of Japan's bullet train technology, and as a sendoff, one of the Indian train drivers in training in Japan waved at Tokyo Station.

The Prime Minister said their partnership is a combination of Japan's technology and India's talent. The economies of India and Japan are the fourth and fifth largest by nominal GDP, and they are moving toward closer integration as they respond to uncertainty in the geopolitical environment by increasing their cooperation in strategic domains.

 Their summit document recognized the need to safeguard their critical economic interests and details points of mutual interest in areas such as semiconductors, critical minerals, steel, artificial intelligence, and clean energy.

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A stunning 170 memorandums of understanding were signed across a wide range of sectors including defence. As Quad members with the US and Australia, India and Japan see their co-operation as instrumental to both regional security and economic resilience.

Japan promised a total of 10 trillion yen in private investments into India over the next 10 years, doubling its promise from 2022.

For Japanese firms with shrinking markets and labour shortages, India represents both low-cost skilled labour and low-cost manufacturing. To further facilitate the exchange of human capital, the two countries agreed to facilitate profiled movements comprising 500,000 students/workers in both directions (including 50,000 skilled Indian workers to Japan) within a five-year timeframe to expand further movement of people and ideas.

From Japan's perspective, India will also contribute significantly to the proposed Indian Ocean-Africa Economic Zone, which aims to broaden Japan's trade ties to Africa. This plan allows India to be the springboard for Japan to reach new untapped markets.

In Tokyo, Ms Asuka Tatebayashi, a senior analyst at Mizuho Bank's global strategic advisory department agreed that there were some concerns over India's geopolitical position.

She stated, "There was interest in what sectors India would open to Chinese investment, and in this regard, it was reassuring to see that India was not going to compromise in sensitive areas like semiconductors and artificial intelligence".

'The clear message is that India sees Japan as a trustworthy partner, and wants to work with Japan on economic security issues. And this is where Japan should reciprocate and accelerate partnerships with India", she added.