Japan to invest $42 billion in India over five years

India and Japan set an investment target of “five trillion yen” ($42 billion) in the next five years, the leaders announced after a meeting in New Delhi for the 14th annual summit, where several agreements were signed.

 The two sides discussed various regional issues where PM Narendra Modi briefed PM Fumio Kishida on the situation at the Line of Actual Control (LAC) with China, and the PLA’s attempts at “multiple transgression” on the LAC. Foreign secretary Harsh Shringla said any normalcy in the India–China relationship would depend on the progress on the LAC de–escalation talks, indicating that the proposed visit of Chinese Foreign Minister Wang Yi would need to focus on that. 

However, in a clear sign of differences over their stands on the Russia–Ukraine conflict, Mr. Kishida emphasised that Russia’s actions must not be ‘condoned’ while PM Modi made no direct reference to the situation. “Russia’s invasion on Ukraine is a grave development that shakes the fundamentals of the international order. And we need to resolutely respond to the situation. I spoke to PM Modi about this and said we should not condone or allow this kind of attempt to unilaterally change the status quo by force in any region of the world,” Mr. Kishida said in his press statement after the signing the agreements. 

This was the first India–Japan annual summit since 2018, which had been postponed due to protests against the Citizenship (Amendment) Act and then due to the pandemic. 

PM Modi said as the global post–covid recovery process falters and “geopolitical developments” present new challenges, it was necessary to deepen the India–Japan partnership, which would have an impact on the Indo–Pacific region, and the world, adding that the two leaders had also discussed strengthening bilateral cooperation including at the United Nations.

The two sides also exchanged six agreements on cybersecurity, economic partnerships, waste–water management, urban development, a clean energy partnership and an agreement on promoting bamboo–based products from the northeast region. 

Mr. Shringla said India and Japan had surpassed their previous target of 3.5 trillion yen Japanese investment between 2014-2019, and the new target of 5 trillion yen was a “measure of their performance in the past”. The two sides also concluded a “roadmap for competitive partnership” for the MSMEs and the small–scale sector companies. 

Mr. Shikata also said Japan hoped to accelerate efforts to complete the Mumbai–Ahmedabad Shinkansen Bullet train project, that has run into troubles over land acquisition in Maharashtra and is now expected to be delayed to about 2026. He said Japan hopes that when one such high–speed rail project is completed, Indians will see the benefits — not only the convenience [of the train] but how environmentally friendly it is, new smart cities can be built and more investment will come.”

 The “2+2” meeting of Foreign and Defence Ministers in the next few months is due to take forward agreements on the strategic partnership and PM Modi is expected to visit Tokyo in May or June, where he will hold another bilateral summit with Mr. Kishida and attend the Quad summit with the U.S. President and the Australian Prime Minister.