India-Japan Relations (PSIR Optional)

India and Japan have the fewest quarrels of any pair of major Asian powers and the least to show for it. There is no territory in dispute, no war between them, no historical grievance, and an almost complete overlap of stated objectives across the Indo-Pacific. Yet bilateral trade is a fifth of India’s trade with China, and the flagship project is a railway a decade under construction. The interesting question is not why the two came together, but why so little has moved since.

The Shape of the Relationship

• The partnership carries the most elaborate title India gives any country — the Special Strategic and Global Partnership, agreed in 2014 — and the nomenclature is itself a record of how deliberately the relationship has been built upward in stages rather than transformed at a stroke.
• Japan is the only external power India has invited into two of its most guarded spaces: the North-East, where Chinese sensitivity makes any foreign presence a political statement, and the Andaman and Nicobar Islands. No other partner, including the United States, has that access.
• The relationship runs on three unequal legs. Diplomatic and security convergence is close to complete; development finance is deep, old and unmatched by any other donor; and commercial exchange is thin, static and disappointing to both sides.
• Neither side wants an alliance and both benefit from the other’s existence. Japan wants a partner in the Indian Ocean that is not a client of Washington; India wants capital and technology that are neither Chinese nor conditional on alignment.
• China is the organising fact but not the whole relationship. The convergence predates the sharpest phase of Chinese assertiveness, and the development-finance leg would exist without it — but the tempo, the security content and the political will all track Chinese behaviour closely.

Stage	Year	Formulation	What it added
Diplomatic normalisation	1952	Bilateral peace treaty	Relations begin; reparations waived
Economic entry	1958	First yen loan	Japan’s first ODA anywhere goes to India
Political upgrade	2000	Global Partnership	A term Japan had used only for the United States
Strategic content	2006	Strategic and Global Partnership	Annual summits; security dialogue
Security architecture	2008	Joint Declaration on Security Cooperation	India the third country after the US and Australia
Present tier	2014	Special Strategic and Global Partnership	Defence equipment, nuclear, infrastructure finance

Civilisational and Pre-War Contacts

Japan is one of the few countries with which India’s modern relationship rests on a genuinely old cultural foundation rather than a rhetorical one. The transmission was indirect — Indian ideas reached Japan through China and Korea rather than by sea — but it was substantial enough that Japanese Buddhism preserves Sanskrit terms, the Siddham script and an iconography of Indian origin. What matters politically is that neither state has to manufacture the affinity.

The Buddhist transmission

• Buddhism entered Japan in the sixth century through the Korean kingdom of Baekje, carrying with it a body of Indian philosophy, medicine and grammar already filtered through Chinese translation.
• The Indian monk Bodhisena travelled to Japan and performed the eye-opening consecration of the Great Buddha at Tōdai-ji in Nara in 752 — the single most cited episode in the relationship’s cultural repertoire, and one invoked at almost every summit.
• Sanskrit survives in Japanese religious practice in the Siddham script used for seed syllables, and Indian deities persist in Japanese form — Saraswati as Benzaiten, Lakshmi as Kichijōten, Ganesha as Kangiten — a continuity Japanese and Indian officials use to argue the relationship is recovered rather than invented.

The nationalist encounter

• Japan’s victory over Russia in 1905 electrified Indian nationalism as proof that an Asian power could defeat a European empire. Jawaharlal Nehru recorded in The Discovery of India the effect the news had on him as a schoolboy — and recorded, equally, his later disillusion as Japanese power turned imperial.
• Rabindranath Tagore visited Japan five times from 1916 and became the relationship’s most complicated founding figure: he admired Japanese aesthetics and discipline, and he told Japanese audiences directly that their nationalism was a European disease they had contracted. His lectures were poorly received at the time and are now treated in Japan as prescient.
• Okakura Kakuzō’s opening line in The Ideals of the East — “Asia is one” — was written after his stay in Calcutta with Vivekananda’s circle, and it is the intellectual ancestor of every subsequent pan-Asian formulation, including some India has been careful not to endorse.
• Rash Behari Bose, a fugitive from the 1912 Delhi conspiracy case, spent three decades in Japan, took Japanese citizenship and organised the earliest Indian Independence League there.
• Subhas Chandra Bose reconstituted the Indian National Army with Japanese support and proclaimed the Provisional Government of Azad Hind at Singapore in 1943.
  • The Imphal campaign of 1944 ended in catastrophe, but the episode left a shared memory neither government treats as embarrassing — a marked contrast with Japan’s wartime record elsewhere in Asia.

Radhabinod Pal and the Tokyo Tribunal

• Justice Radhabinod Pal was India’s judge at the International Military Tribunal for the Far East and the only member of the bench to hold that all the accused should be acquitted.
• His dissent was jurisprudential, not exculpatory. He argued that the tribunal applied law created after the acts it punished, that “crimes against peace” was a retroactive category, and that a court constituted solely by the victors could not be impartial. He was explicit that Japanese wartime conduct included grave atrocities.
• The dissent is the relationship’s most powerful symbolic asset and its most delicate. It is honoured at Yasukuni Shrine and at Kyoto’s Ryōzen Gokoku Shrine, and invoked by the Japanese constituency most revisionist about the war — so India accepts the goodwill while declining to endorse the use made of it.
• Shinzo Abe met Justice Pal’s son in Kolkata in 2007 and referred to Pal from the floor of the Indian Parliament, tying the memory directly to the strategic opening he was proposing.

“Justice Pal is highly respected even today by many Japanese for the noble spirit of courage he exhibited during the International Military Tribunal for the Far East.”

— Shinzo Abe

The separate peace of 1952

• India declined to attend the San Francisco Peace Conference of 1951, objecting that the draft treaty left Japan’s sovereignty circumscribed, that it separated the Ryukyus and Bonins from Japanese administration, and that it excluded the People’s Republic of China from a settlement in Asia.
• India signed a separate bilateral peace treaty with Japan on 9 June 1952 and waived all reparation claims — a decision with no material cost to India, since it had suffered little direct destruction, but with a durable effect on Japanese elite memory.
• India then sponsored Japan’s re-entry into Asian diplomacy, inviting it to the first Asian Games in New Delhi in 1951 — before the peace treaty was signed — and to the Bandung Conference of 1955.
• Indian iron ore supplied Japan’s steel industry through its reconstruction, and the first yen loan Japan ever extended to any country went to India in 1958, for the Rourkela steel project’s associated infrastructure. Japan has been India’s largest bilateral donor almost continuously since.

The Cold War Divergence, 1952–1998

The affection of the 1950s did not survive the structure of the 1960s. India chose non-alignment and drifted toward the Soviet Union; Japan accepted the American security treaty, the nuclear umbrella and a foreign policy of economic expansion under strategic dependence. For four decades the two countries had almost nothing to discuss that mattered to either.

Why the two drifted

• Japan’s alignment was total and India’s was disavowed. The 1951 US–Japan Security Treaty, revised in 1960, made Japan a base-hosting ally; Indian non-alignment treated exactly that arrangement as the problem. Indian commentary of the period read Japan as an American dependency, and Japanese officials read India as a Soviet client.
• Japan was neutral where India wanted support. It took no position on the 1962 war with China and none in the India–Pakistan wars of 1965 and 1971 — correct behaviour for a state with no capacity to act, and a lasting disappointment in Delhi.
• India was not economically interesting. Japanese capital in the high-growth decades went to the East and Southeast Asian production networks, where growth rates, labour costs and openness to foreign investment were all better. India’s import-substituting, licence-bound economy offered a small market behind high tariffs.
• The nuclear question separated them from the beginning. India’s refusal of the NPT and its 1974 test placed it on the wrong side of the single issue on which Japanese diplomacy claims moral authorship.
• Development assistance was the only continuous thread. Even at the coldest points, Japanese yen loans kept flowing to Indian power, railway and irrigation projects, which is why the aid relationship is the oldest functioning part of the partnership.

Pokhran II and the rupture of 1998

• Japan’s reaction to India’s tests of May 1998 was the sharpest of any democracy, sharper than the American response in tone if not in law, because nuclear disarmament is constitutive of Japan’s post-war identity as the only country to have been attacked with nuclear weapons.
• Japan suspended new yen loans and grant aid, froze political exchanges, and worked actively for UN Security Council Resolution 1172 of 6 June 1998, which called on India and Pakistan to cease weapons development and accede to the NPT and CTBT.
• The sanctions were unilateral, not multilateral. Japan acted on its own account, and the loss mattered more than the American Glenn Amendment sanctions did, precisely because Japan was the largest donor.
• Recovery was faster than expected. Japan lifted the measures in October 2001, in the changed climate after the September 2001 attacks, and the episode has since functioned as a warning to both sides about how much the relationship depends on the nuclear question staying quiet.

A relationship with no disputes still spent forty years going nowhere, because congruent values are not the same thing as convergent interests.

Reconstruction, 2000–2014

Mori and the Global Partnership

• Prime Minister Yoshiro Mori’s visit of August 2000 is the hinge. Japan agreed with India on a “Global Partnership in the 21st Century” — a phrase Tokyo had reserved for the United States — barely two years after the tests.
• The reasoning on the Japanese side was structural. Japan’s decade of stagnation coincided with China’s acceleration; a Japan whose regional weight was falling needed partners that were not American allies and not Chinese dependants.
• The reasoning on the Indian side was economic and diplomatic. Liberalisation had made India worth investing in, and the Look East policy — later Engage East and then Act East — gave the eastward turn a doctrine. Japanese recognition also broke the post-1998 isolation.
• Yen loans resumed in 2001 and the Delhi Metro, already under construction with Japanese finance, became the visible proof that the aid relationship had survived.

From Koizumi to the security declaration

• Junichiro Koizumi’s visit of April 2005 produced the “Strategic Orientation of Japan–India Global Partnership” and established the annual summit, alternating between the two capitals — an instrument India maintains with only a handful of countries.
• The 2006 visit of Manmohan Singh to Tokyo upgraded the relationship to a Strategic and Global Partnership, during Abe’s first, short premiership. 2007 was observed as the India–Japan Year of Friendship.
• The Joint Declaration on Security Cooperation of 22 October 2008 is the structural turning point: Japan had signed such a declaration only with the United States and Australia (2007) before India, and with no country since on comparable terms. It committed the two to information exchange, maritime security cooperation, disaster response and counter-terrorism.
• An Action Plan in 2009 put machinery under the declaration — annual foreign-ministerial dialogue, a two-plus-two format at official level, and regular naval exchanges.
• In 2010 the two navies began exchanging the schedules of their anti-piracy escort operations in the Gulf of Aden, the first genuinely operational cooperation, and held their first two-plus-two consultation at senior-official level. The ministerial two-plus-two came only in November 2019.
• Japan became a permanent participant in Exercise Malabar in 2015, ending a decade in which its participation had been episodic and politically fraught.

The Confluence of the Two Seas

• Abe’s address to the Indian Parliament on 22 August 2007 is the intellectual origin of the Indo-Pacific as a strategic concept and, through it, of the Quad. It borrowed its title from Dara Shikoh’s Majma-ul-Bahrain of 1655, a Mughal treatise on the meeting of Hindu and Islamic mystical thought.
• The argument was geographic before it was strategic. Abe proposed that the Pacific and the Indian Oceans be treated as a single maritime space, which had the immediate consequence of making India a resident power in the region where Japan’s security is decided.

“The Pacific and the Indian Oceans are now bringing about a dynamic coupling as seas of freedom and of prosperity. A ‘broader Asia’ that broke away geographical boundaries is now beginning to take on a distinct form.”

— Shinzo Abe

• The speech sat inside a wider Japanese doctrine, the Arc of Freedom and Prosperity, which proposed a belt of democratic partners along the outer rim of Eurasia — a values-based framing India has always used more cautiously than Japan.
• Abe converted the idea into machinery within months, proposing that the existing trilateral consultation be widened into a quadrilateral including Australia.
  • The grouping’s architecture, its 2008 collapse and its revival are treated with the subject of India in the Quad and the Indo-Pacific.
  • What belongs here is that the concept is Japanese in authorship and Indian in indispensability — the Indo-Pacific is unintelligible without India, which is why Abe wrote it that way.
• The concept was formally adopted as Japanese policy as the Free and Open Indo-Pacific in 2016, announced at the Sixth Tokyo International Conference on African Development in Nairobi, and it has since been taken up in modified form by the United States, ASEAN, the European Union and India itself.

The 2014 upgrade

• Emperor Akihito and Empress Michiko visited India in December 2013, the first visit by a reigning Japanese Emperor — a signal of intent that carries more weight in Japanese politics than any communiqué.
• Abe was chief guest at the Republic Day parade in January 2014, the first Japanese prime minister to be so honoured.
• The September 2014 Modi–Abe summit created the Special Strategic and Global Partnership and set a five-year Japanese investment aspiration of ¥3.5 trillion. The personal relationship between the two leaders became, for a decade, the relationship’s principal engine — and its principal vulnerability.

Japan’s Strategic Normalisation and Why It Matters to India

Almost everything India now gets from Japan in the security domain was legally impossible before 2014. The relationship’s ceiling has never been set in Delhi; it has been set by Japanese constitutional law, Japanese industrial policy and Japanese public opinion. Tracking those changes is therefore not a digression into Japanese politics — it is the only way to explain what the partnership can and cannot deliver.

The enabling changes

• The Cabinet decision of 1 July 2014 reinterpreted Article 9 of the 1947 Constitution to permit collective self-defence in limited circumstances, ending the position that Japan could use force only if attacked directly. The implementing Peace and Security Legislation passed in September 2015 and took effect in March 2016.
• The arms-export ban was replaced in April 2014. The Three Principles on Transfer of Defense Equipment and Technology superseded the 1967 principles, which had been a near-total prohibition. Transfers became possible where they serve peace, international cooperation or Japan’s security, subject to case-by-case Cabinet screening.
• The three strategic documents were rewritten in December 2022 — the National Security Strategy, the National Defense Strategy and the Defense Buildup Program — committing Japan to 2 per cent of GDP on defence by fiscal 2027 and, for the first time, to counterstrike capability against enemy bases.
• Sanae Takaichi became prime minister in October 2025 and accelerated the timetable, stating that 2 per cent would be reached in fiscal 2025, two years early.
  • She ordered a fresh revision of the three documents; an expert panel convened in April 2026, with approval targeted for the end of that year.
  • Its remit covers drones, cyber, artificial intelligence, defence-industrial renewal and — controversially in Japan — the three non-nuclear principles.
• The direction of travel is unambiguous and its limits are still real. Japanese defence exports remain rare, slow and politically contested; the industrial base is small, high-cost and configured for a single domestic customer; and no Japanese government has yet sold a complete major platform abroad.

The civil nuclear agreement

• The Agreement for Cooperation in the Peaceful Uses of Nuclear Energy was signed in Tokyo on 11 November 2016 and entered into force on 20 July 2017. It is the only civil nuclear agreement Japan has concluded with a state outside the Non-Proliferation Treaty, and for Japan it was the hardest possible concession.
• Its practical importance is larger than its Indian content suggests. Japanese firms supply components without which American and French vendors cannot build: Japan Steel Works long held a near-monopoly on large reactor-vessel forgings, and Toshiba owned Westinghouse. Without Japanese assent the American nuclear deal was commercially incomplete.
• The agreement carries a Note on Views and Understanding on testing, which the two sides read differently.
  • Japan treats an Indian resumption of testing as a departure from the moratorium of the 5 September 2008 statement, justifying suspension of cooperation.
  • India records the note as an expression of Japanese sensibility, not a new obligation; Japanese newspapers criticised the absence of an explicit nullification clause in the treaty text.
• Domestic Japanese opposition was intense and shaped by Fukushima, with most Japanese reactors idle and public opinion divided; critics argued the agreement compromised Japan’s standing as a disarmament advocate.
• It has produced almost no commerce. No Japanese-supplied reactor project has been built in India, and the agreement’s value has been political — Japanese assent completed India’s rehabilitation in the global nuclear order.

The Summit Architecture and the Current Agenda

The annual summit has survived Abe’s assassination on 8 July 2022, three changes of Japanese prime minister and one lapse. Fumio Kishida carried the framework forward, launching a New Plan for a Free and Open Indo-Pacific in March 2023 with $75 billion pledged to the region by 2030 and announcing a ¥5 trillion Japanese investment target for India. Shigeru Ishiba hosted the fifteenth summit; Sanae Takaichi came to Delhi for the sixteenth within nine months of taking office.

The 15th Annual Summit, Tokyo, 29–30 August 2025

• Modi and Ishiba adopted a joint statement titled “Partnership for Security and Prosperity of our Next Generation”, together with a Joint Vision for the Next Decade built on eight pillars — economy, economic security, mobility, environment, technology and innovation, health, people-to-people ties, and state–prefecture engagement.
• The private investment target was doubled from ¥5 trillion to ¥10 trillion by 2035, roughly $68 billion, the largest such figure Japan has attached to any country.
• An Action Plan for Human Resource Exchange set a target of 500,000 personnel exchanges over five years, including 50,000 skilled Indians moving to Japan — the first time labour mobility has been treated as a headline deliverable rather than a technical annexe.
• Four framework initiatives were launched: the India–Japan Economic Security Initiative covering semiconductors, critical minerals, telecommunications, pharmaceuticals and clean energy; Digital Partnership 2.0; an AI Cooperation Initiative covering large language models and data centres in India; and the India–Japan Industrial Competitiveness Partnership, aimed at logistics, textiles, food processing, automotives and capital goods.
• A Memorandum of Cooperation in the Field of Mineral Resources was signed, and Modi met the governors of sixteen Japanese prefectures — an unusual investment of prime-ministerial time in subnational diplomacy, and a recognition that Japanese capital decisions are made at prefectural and corporate level, not in Tokyo ministries.

The 16th Annual Summit, New Delhi, 1–3 July 2026

• Takaichi’s first official visit to India produced sixteen formal outcomes, three joint statements and roughly 129 memoranda signed at an accompanying business forum, with about 150 Japanese firms pledging some $12.5 billion in fresh investment.
• A Joint Declaration on Economic Security Cooperation narrowed the field to semiconductors, critical minerals, information and communications technology, clean energy and pharmaceuticals, with specific memoranda on rare-earth processing and active pharmaceutical ingredients — the two inputs on which both countries depend most heavily on China.
• A Joint Statement on Energy Resilience launched POWERR Asia, Japan’s partnership on wide energy and resources resilience, opened cooperation on strategic petroleum reserves for the first time, and recorded Japanese support for India’s full membership of the International Energy Agency.
• A Japan–India Cooperative Biogas for Growth Initiative was tied to India’s target of 1,000 compressed-biogas and organic-fertiliser plants, alongside a clean-ammonia project in Odisha and cooperation on green hydrogen.
• A Joint Statement on AI followed the inaugural AI Strategic Dialogue, aligning the two with the Hiroshima AI Process and the New Delhi Declaration on AI Impact.
• The defence outcomes were the most substantive in a decade: agreement on the remaining technical details of the UNICORN antenna transfer, cooperation on naval maintenance and repair, satellite-based maritime domain awareness, and a Next-Generation Mobility Partnership covering railways, shipbuilding, ports and logistics.
• Groundwork was laid for direct yen–rupee trade settlement and a Japan–India Governors’ Network was established, pairing prefectures with Indian states — Yamanashi with Uttar Pradesh, Shizuoka with Gujarat, Ehime with Tamil Nadu and others.
• The two sides agreed to accelerate a review of CEPA, fifteen years after it entered into force, and Modi was invited to Japan for the seventeenth summit.

	15th Summit, Tokyo, August 2025	16th Summit, New Delhi, July 2026
Headline document	Partnership for Security and Prosperity of our Next Generation	Joint Statement plus three thematic declarations
Economic frame	Joint Vision for the Next Decade, eight pillars	Joint Declaration on Economic Security Cooperation
Money	¥10 trillion private investment target to 2035	$12.5 billion of fresh pledges from ~150 firms
People	500,000 exchanges, 50,000 skilled Indians to Japan	Governors’ Network; over 540,000 visitor exchanges in 2025
Energy	Not a headline	POWERR Asia, petroleum reserves, IEA membership support
Defence	Fourth two-plus-two announced	UNICORN details closed; naval MRO; satellite MDA
Trade policy	Mineral resources memorandum	CEPA review accelerated

The Economic Relationship: The Underperforming Pillar

This is where the article has to be blunt. India and Japan are the world’s fourth and fifth largest economies by nominal output, they have had a comprehensive trade agreement since 2011, and their two-way trade in 2025-26 was $27.47 billion — less than a fifth of India’s trade with China and about a fifth of Japan’s trade with the United States. The political relationship has run far ahead of the commercial one for two decades, and every summit since 2014 has been an attempt to make the commercial one catch up.

Trade: small, stagnant and lopsided

Year	India’s exports to Japan	India’s imports from Japan	Total	India’s deficit
2020-21	$4.43bn	$10.90bn	$15.33bn	$6.47bn
2021-22	$6.18bn	$14.39bn	$20.57bn	$8.21bn
2022-23	$5.46bn	$16.49bn	$21.95bn	$11.03bn
2023-24	$5.15bn	$17.69bn	$22.84bn	$12.54bn
2024-25	$6.25bn	$18.90bn	$25.15bn	$12.65bn
2025-26	$6.04bn	$21.43bn	$27.47bn	$15.39bn

• India’s exports to Japan have not grown in five years. They were $6.18 billion in 2021-22 and $6.04 billion in 2025-26. Every rupee of headline growth in the relationship has come from rising Indian imports.
• The deficit has more than doubled since 2020-21, to about $15.4 billion — an important correction to the figure of roughly $11 billion that most reference material still carries.
• The mutual weight is trivial by the standards of the political rhetoric. Japan is India’s tenth-largest trading partner with about 2.3 per cent of its trade; India is Japan’s fourteenth, with about 1.75 per cent. India’s exports to Japan are barely 1.4 per cent of India’s global exports.
• The export basket is narrow and low-value. India exceeds a 3 per cent share of Japan’s imports in only three categories — organic chemicals, fish and crustaceans, and pearls and precious stones — with machinery, vehicles and mineral fuels the recurring candidates for expansion that have not materialised.
• The import basket is exactly what a technology-rich economy sells — machinery and mechanical appliances, inorganic and rare-earth chemicals, electrical machinery, iron and steel, copper. The composition, not the balance, is the analytically significant fact: India buys production capability and sells raw and semi-processed goods.

CEPA and its review

• The Comprehensive Economic Partnership Agreement was signed on 16 February 2011 and entered into force on 1 August 2011, committing the two to eliminate tariffs on about 94 per cent of trade over ten years and covering services, investment and the movement of natural persons as well as goods.
• It is the least successful of India’s major trade agreements by its own metric. Trade grew slowly, Indian utilisation of preferences has been poor, and Japanese exporters gained more from Indian liberalisation than Indian exporters gained from Japanese.
• Indian complaints are concentrated in non-tariff barriers: Japanese standards, certification and testing requirements, distribution practices and language, which together mean a zero tariff does not produce market access — the problem is most acute in agriculture, marine products and pharmaceuticals, where Indian generics face a registration regime that has kept them largely out.
• Japanese complaints run the other way: tariff volatility, retrospective taxation, contract enforcement, land acquisition and the difficulty of exit.
• A review was agreed at the 16th summit in July 2026 and confirmed by both trade ministries, to modernise the agreement, widen its coverage and address the deficit. A CEPA 2.0 would be the first structural change in the economic relationship since 2011.

Investment: the one leg that is growing

• Cumulative Japanese foreign direct investment into India exceeded $47.6 billion by December 2025, making Japan India’s fifth-largest source of FDI — a correction to the widely repeated claim that Japan ranks third.
• Japanese investment flows to India have overtaken flows to China.
  • Japanese outward FDI into India, on Japan’s own balance-of-payments measure, rose from $3.7 billion in 2021 to $7.6 billion in 2025; flows into China fell from $12.5 billion to $1.7 billion over the same period.
  • India has been ahead for three consecutive years.
• The composition has shifted from manufacturing to finance and services. Sumitomo Mitsui took a 20 per cent stake in YES Bank, MUFG a 20 per cent stake in Shriram Finance and a strategic partnership with the State Bank of India — deals driven by return on capital in an under-banked market, not by geopolitics.
• The number of Japanese firms in India has barely moved. Roughly 1,400 companies operate about 5,200 establishments, a figure essentially unchanged since 2018 even as investment values rose; Japan’s stated aim is 5,000 companies by 2029.
• The flow is small by Japan’s own standards. Japanese investment in India has for years trailed its investment in far smaller economies such as Vietnam, and Indian investment in Japan is negligible — about a hundred Indian companies operate there.
• Successive investment targets have been missed. Tokyo announced ¥3.5 trillion over five years in 2014, ¥5 trillion in 2023 and ¥10 trillion over a decade in 2025; actual inflows on India’s own DPIIT equity measure, about $3.2 billion in the nine months to December 2025, were below the pace the current target requires.
• The honest reading is that business, not politics, drives the money. Japanese firms invest in India for market size and long-term growth, and mid-sized firms still choose Southeast Asia for faster permitting and cheaper land. Where government targets and corporate calculation diverge, corporate calculation wins.

Japanese capital has stopped going to China. It has not, in any commensurate volume, started going to India.

Development assistance and the infrastructure ledger

• Japan is India’s largest bilateral development partner and has been for most of the period since 1958. Cumulative yen-loan commitments approach ¥7 trillion, with recent annual commitments of ¥191.7 billion in 2024-25 and ¥275.8 billion in 2025-26 — a rising, not a tapering, programme, which is unusual for a middle-income recipient.
• The terms are the point. Japanese official loans carry interest rates far below commercial finance with repayment periods measured in decades, which is why India accepts them where it would refuse other conditional finance.
• The project list is a map of Indian urban and logistics infrastructure: the Delhi Metro, the flagship and the template; the Western Dedicated Freight Corridor; the Delhi–Mumbai Industrial Corridor with its twelve planned industrial townships; the Chennai–Bengaluru Industrial Corridor; metro systems in Ahmedabad, Chennai, Bengaluru, Mumbai, Kolkata and Patna.
• The North East Road Network Connectivity Improvement Project is strategically distinctive: Japan is the only external partner India has invited to build in the North-East, a region otherwise closed to foreign actors because of the Chinese claim on Arunachal Pradesh. Both governments understand the involvement as a signal.
• The India–Japan Act East Forum, established in 2017, is the institutional vehicle for that work, covering roads, bamboo value chains, hydropower, disaster management and connectivity to Bangladesh and Myanmar.
• The Japan Industrial Townships — a dozen sites offered to Japanese manufacturers with pre-cleared land and utilities — are the physical form of the investment promise, and their uneven take-up is a fair index of how far declaration outruns delivery.
• A bilateral currency swap arrangement of $75 billion underwrites the rupee against balance-of-payments stress — a facility India has with no other partner on that scale, and one whose value is entirely contingent.

The Mumbai–Ahmedabad High Speed Rail

• The project is 508 kilometres of Shinkansen technology between Mumbai and Ahmedabad, financed by a Japanese soft loan covering the bulk of the cost at about 0.1 per cent interest over fifty years with a fifteen-year moratorium — the most concessional terms Japan offers anywhere.
• It has been delayed repeatedly, principally in Maharashtra, where land acquisition stalled under a state government hostile to the project between 2019 and 2022, and where roughly 21 kilometres of tunnelling including an undersea section remains the critical path.
• Costs have escalated sharply, from an original estimate of about ₹1.08 lakh crore toward roughly ₹2 lakh crore; about ₹87,000 crore had been spent to the end of 2025. The Japanese implementing agency’s own 2023 valuation was under revision by both governments.
• Physical progress by mid-2026 was substantial — over 450 km of piers, around 355 km of girders and 209 km of track bed completed — with the Surat–Bilimora section targeted for first services in 2027 and the corridor’s full completion projected later.
• The rolling-stock arrangement changed in 2025. Japan agreed to introduce the next-generation E10 Shinkansen in India and Japan at broadly the same time, expected in the early 2030s, with E5-series trainsets and signalling deployed for the initial phase. No completion date for the full corridor should be treated as settled.
• Its significance exceeds its economics. The project is a bet on Japanese technology becoming the Indian standard for high-speed rail, and its difficulties are the most-cited evidence in Japanese boardrooms for the proposition that India is hard to build in.

Economic security, semiconductors and rare earths

• The Economic Security Initiative of 2025 is the most consequential new economic instrument because it reframes the relationship around a shared vulnerability rather than a shared market: both economies depend on China for the inputs that make their manufacturing possible.
• Japan learned this in 2010, when China curtailed rare-earth shipments after a collision near the Senkaku Islands while holding over 90 per cent of world production. India learned it in 2025, when export controls on rare-earth magnets disrupted Indian automotive and electronics output. The two episodes are fifteen years apart and identical in structure.
• The Japanese response after 2010 diversified mining but not processing. Japan secured Australian ore but never built independent refining and magnet capacity at scale, which is why it remains exposed — and why cooperation with India is about processing, not extraction.
• Toyota Tsusho’s joint venture with Indian Rare Earths Limited at Visakhapatnam, set up in the aftermath of the 2010 episode to supply rare-earth oxides to Japan, is the precedent for the current effort — and its modest output over a decade is a caution against expecting quick results.
• Three obstacles are structural.
  • India’s deposits are overwhelmingly light rare earths — cerium, lanthanum, neodymium — while the elements behind the 2025 crisis, dysprosium and terbium, are heavy rare earths India lacks in quantity.
  • India has no industrial-scale refining capacity, so the partnership is circular unless Japanese technology transfer is real.
  • Environmental clearances for monazite processing are slow and contested.
• Semiconductor cooperation rests on a memorandum of 2023 on design, manufacturing, equipment research and talent, with Japanese equipment and materials firms the natural suppliers to India’s fabrication and assembly projects. Japan’s comparative advantage is in materials, chemicals and tools rather than leading-edge fabrication, which fits India’s stage of entry.
• The gap between declaration and industrial reality remains wide. Announcing a supply chain does not build one, and neither country currently possesses the refining, magnet-making or advanced-node capacity that would make the initiative more than a hedge.

Security and Defence Cooperation

The agreement stack

Instrument	Date	What it does
Joint Declaration on Security Cooperation	22 October 2008	Political framework; India the third such partner after the US and Australia
Agreement on Security Measures for Protection of Classified Military Information	12 December 2015	Allows exchange of classified material — the precondition for everything technical
Defence Equipment and Technology Transfer Agreement	12 December 2015	Legal basis for transfer of defence equipment and joint development
Civil Nuclear Cooperation Agreement	Signed 11 Nov 2016; in force 20 July 2017	Japan’s only such agreement with a non-NPT state
Two-plus-Two Foreign and Defence Ministerial	From November 2019	Ministerial-level strategic coordination; fourth round due in Tokyo
Acquisition and Cross-Servicing Agreement (ACSA)	Signed 9 Sept 2020; in force July 2021	Reciprocal logistics — supplies and services between the two militaries
Cyber Security Agreement	October 2020	Cooperation on 5G, critical infrastructure and capacity building
Memorandum of Arrangement on Maritime Security Cooperation	20 August 2026	Framework for navy-to-navy coordination, MDA sharing and mine countermeasures

The Acquisition and Cross-Servicing Agreement

• The ACSA is a reciprocal logistics arrangement, not a basing agreement. It allows the Indian Armed Forces and the Japan Self-Defense Forces to provide each other supplies and services — fuel, water, food, transport, spare parts, repair and maintenance, medical care, accommodation and airfield and port services — on a reimbursable, case-by-case basis.
• It applies to defined activities: bilateral exercises, United Nations peacekeeping, humanitarian assistance and disaster relief, international cooperation efforts, and other purposes the two governments agree on. It confers no right of access, no basing, no stationing and no obligation to assist.
• What it changes operationally is reach.
  • An Indian warship in the western Pacific can replenish from Japanese stocks instead of returning home or negotiating each transaction; a Japanese destroyer in the Indian Ocean can do the same, including at Andaman and Nicobar.
  • Japan’s facility at Djibouti, its only overseas one, becomes usable by Indian ships on anti-piracy patrol in the Gulf of Aden.
• It compresses the distance between the two theatres. Japan’s security interest ends in the Indian Ocean at the point where its crude oil originates; India’s naval ambition ends in the Pacific at the point where sustainment becomes impossible. The agreement narrows both limits.
• It sits within a network rather than standing alone.
  • India has comparable arrangements with the United States (LEMOA, 2016), France (2018), Australia (2020), Singapore, South Korea and the United Kingdom; the Russian agreement of 2025 is not yet operative.
  • The cumulative effect is that the Indian Navy can sustain itself across the Indo-Pacific without a single overseas base — a specifically Indian answer to the problem of reach.
• What it does not do is the honest part. It creates no security guarantee, no consultation obligation in crisis, no interoperability of command and no joint planning. It is an administrative instrument that makes cooperation cheaper; it does not make it certain.

Exercises

• Malabar — the India–US naval exercise begun in 1992; Japan became a permanent participant in 2015, and Australia joined in 2020. It is a naval exercise, not a Quad activity, and the distinction matters because the Quad has no military component.
• JIMEX, begun in 2012 and now conducted as JAIMEX — the bilateral maritime exercise; the 2025 edition was held off Yokosuka with INS Sahyadri and Japanese units, working on anti-submarine, air-defence and replenishment drills.
• Dharma Guardian — the army exercise, from 2018, alternating between the two countries; the 2026 edition was held at Chaubattia in Uttarakhand, focused on counter-terrorism and sub-conventional operations in mountainous terrain.
• Veer Guardian — the air exercise, first held in Japan in 2023 with Indian Su-30MKIs; the 2026 edition brings Japan Air Self-Defense Force fighters to India for the first time.
• Shinyuu Maitri — air transport cooperation; and Japanese participation in the multilateral MILAN naval gathering and Tarang Shakti air exercise, and in the International Fleet Review at Visakhapatnam in 2026.
• A trilateral naval exercise with Indonesia was agreed in 2026 — the first time the two have brought a Southeast Asian partner into a bilateral format, which is the direction Japanese and Indian planners want the maritime relationship to take.

Defence equipment: the US-2 and the UNICORN

• The US-2 negotiation is the honest illustration of Japanese export difficulty. India explored buying ShinMaywa US-2 amphibious search-and-rescue aircraft from around 2013, a capability with obvious value for the Andamans, the Lakshadweep and long-range maritime rescue.
• It never closed. The negotiation foundered on unit cost — the aircraft is built in tiny numbers for a single customer — and on India’s insistence on local manufacture and technology transfer, which Japanese industry was not structured to provide. No contract was signed and the proposal is dormant.
• The lesson generalised beyond the aircraft. A defence industry that has never exported cannot price for export, cannot absorb offset obligations and has no experience of transferring production. Japan’s legal liberalisation of 2014 was necessary but not sufficient.
• The UNICORN — Unified Complex Radio Antenna, designated NORA-50 — is the breakthrough, and it is deliberately modest. Developed by NEC with Sampa Kogyo and Yokohama Rubber, it packs a warship’s communications and electronic-support antennas — Link 16, TACAN, IFF, ESM, UHF and VHF — into one radome-enclosed mast, sharply cutting radar cross-section.
• Its transfer was agreed at the two-plus-two of 20 August 2024 and the remaining technical details were closed at the 2026 summit; it will be fitted to Indian Navy vessels with an element of co-development and Indian production. It is the first completed defence equipment transfer between the two countries.
• The choice of item is strategic. A mast subsystem is politically unobjectionable in Japan, technically valuable to India, and establishes the procedural precedent — export licence, security-of-information handling, industrial partnership — on which larger transfers depend.

Maritime domain awareness and the two chokepoints

• The geography is the argument. India sits between the Strait of Hormuz and the Strait of Malacca, the chokepoints through which Japan’s energy security passes: about 90 per cent of Japan’s crude comes from the Gulf, and Malacca is its main route into the South China Sea.
• Neither country can secure those waters alone and neither wants the other to fail. That is the most durable strategic logic in the relationship, and it is independent of who governs in Tokyo or Delhi.
• Information sharing has become the practical expression of it. Japan has engaged with the Information Fusion Centre – Indian Ocean Region at Gurugram, the two navies exchange white-shipping information, and the 2026 summit added satellite-based maritime domain awareness and cooperation on naval maintenance, repair and overhaul in India under Make in India.
• The unresolved question is capability, not intent. Japanese planners want an Indian Ocean presence larger than the Japan Maritime Self-Defense Force can sustain; Indian planners want a Pacific presence larger than the Indian Navy can sustain. Ambition outruns hulls on both sides.

Working in Third Countries

India and Japan are the only two partners that build together in other people’s countries. It is the most distinctive feature of the relationship and, so far, its least successful. The logic is exact: Japan has capital, technology and project discipline but little political capital in South Asia and Africa; India has political access, cheaper delivery and regional legitimacy but not the money. Combined, they offer a development model that competes with Chinese lending without saying so.

The connectivity doctrine

• The India–Japan joint statement of September 2017, “Prosperity through Partnership”, set out the governing principles: infrastructure developed and used in an open, transparent and non-exclusive manner, on international standards, with responsible debt financing, respecting sovereignty and territorial integrity, the rule of law and the environment.
• Every clause is a criticism of the Belt and Road Initiative and not one names it. India’s objection to a corridor running through territory it claims, and its objection to opaque lending, are both carried inside the formulation.
• The Asia–Africa Growth Corridor was the flagship. Its vision document was released at the African Development Bank’s annual meeting in Ahmedabad in May 2017, proposing development projects, quality infrastructure, capacity building and people-to-people partnership across Africa and the Indian Ocean, built on consultation with recipients rather than on lender-designed projects.
• It has largely stalled. No financing vehicle and no secretariat were created, and the corridor now frames separate national programmes rather than functioning as a joint instrument — the clearest statement of what a non-Chinese development model would look like, and of how hard one is to fund.

The project ledger

• Bangladesh is the most substantial theatre.
  • The Ramgarh–Baraiyarhat highway is financed by an Indian line of credit alongside Japanese loans; the Jamuna railway bridge is financed by Japan and built by an Indian contractor.
  • Japan’s Matarbari deep-sea port and the Bay of Bengal Industrial Growth Belt concept aim to link the Bengal littoral to India’s North-East.
• Sri Lanka saw the two announce an LNG terminal and a trilateral development of the East Container Terminal at Colombo — the latter cancelled unilaterally by Colombo in 2021, an instructive reminder that recipient-state politics can undo the best-designed alternative to Chinese finance.
• Myanmar hosted a trilateral commitment to build fifteen schools in Rakhine State, and Japanese and Indian development work there has been severely constrained since the coup of February 2021.
• The North-East and the Andamans remain the exceptional cases: infrastructure inside India, built with Japanese money, in the two theatres where India admits no other foreign partner.

The Quad, in one place

• India and Japan are two of the four members of the Quadrilateral Security Dialogue, whose lineage runs from the tsunami relief core group of 2004 through Abe’s 2007 proposal, the 2008 collapse and the 2017 revival.
• For this relationship the Quad does three specific things.
  • It provides a standing setting in which Indian and Japanese ministers meet without needing a bilateral occasion.
  • It supplies a shared vocabulary — maritime security, critical technologies, critical minerals, resilient supply chains — that has migrated wholesale into their bilateral documents.
  • It distributes among four members costs neither would carry alone.
• The grouping’s architecture, its working groups, its criticisms and the lapse of the leaders’ summit are treated with the subject of India in the Quad and the Indo-Pacific. What is distinctively Japanese is the authorship: the concept, the initial proposal and the persistence through the 2008 collapse were all Abe’s.
• Japan and India are also partners in the Supply Chain Resilience Initiative with Australia, launched in 2021 on a Japanese proposal, which was the first explicit attempt to institutionalise de-risking from China outside the Quad.

The China Factor

Why convergence is China-shaped

• Both states face the same power on different faces of it. India faces a contested land boundary, a nuclear-armed client in Pakistan and a growing naval presence in its ocean; Japan faces a maritime dispute over the Senkaku Islands, an air defence identification zone declared unilaterally in 2013, and near-daily coastguard incursions.
• Both experienced the same coercive instrument fifteen years apart — Chinese restriction of rare-earth supply, against Japan in 2010 and against India in 2025 — which is the sharpest available illustration that economic interdependence with China is a channel of pressure rather than a restraint on it.
• Both are inside Chinese supply chains they cannot leave. India’s trade deficit with China exceeded $110 billion in 2025-26 and Japanese manufacturing remains deeply integrated with Chinese production. Neither can decouple, which is why both frame the problem as de-risking.
• The convergence therefore has an inherent limit. A partnership formed by a shared external pressure is only as durable as the pressure, and each partner retains the option of accommodating China separately — an option both have used.

The Taiwan crisis of 2025-26 and what India did

• Takaichi told the Diet’s budget committee in November 2025 that a Chinese armed blockade of Taiwan could constitute a “survival-threatening situation” for Japan — the legal threshold under the 2015 security legislation that would permit the exercise of collective self-defence. Her predecessors had kept the question deliberately ambiguous.
• China’s response was the sharpest since 2012: restrictions on Japanese seafood imports, suspension of flights and travel promotion, the withdrawal of pandas, and an inflammatory statement by a Chinese consul-general in Osaka.
• India said almost nothing. New Delhi neither endorsed nor criticised the remarks, and continued its own normalisation with Beijing — resumed direct flights, resumed pilgrimage, eased visas, and in March 2026 a relaxation of investment screening for Chinese capital in capital goods, electronics and solar.
• This is the most revealing episode in the current relationship.
  • Indian and Japanese threat perceptions of China are convergent in direction and divergent in intensity.
  • India’s China policy is set by its own boundary and trade calculus, not by partnership solidarity, and any claim of a common China strategy has to account for that.
• The reciprocal test is equally instructive. Japan issued no statement of substance during the Galwan crisis of 2020 beyond opposing unilateral change to the status quo, and has consistently avoided taking a position on the boundary itself.

The two agree completely about China in principle and reserve, in practice, the right to manage it separately.

The mirror-image question

• Whether a shift in China’s relations with Japan tracks a shift in its relations with India is a standing question. The evidence supports a weaker claim: Chinese pressure on one has historically preceded or accompanied pressure on the other, because both are treated as elements of a single encirclement problem in Chinese strategic writing.
• The corollary matters more. Because Beijing reads India–Japan alignment as encirclement, the alignment itself generates part of the Chinese behaviour it is meant to answer — the classic security-dilemma structure, and the strongest argument for keeping the relationship below the threshold of alliance.

The Drivers and the Brakes

What drives the partnership	What holds it back
China, on the land boundary for India and at sea for Japan	Asymmetric threat intensity: Japan’s is immediate and maritime, India’s is continental and diffuse
Complementarity — Japanese capital, technology and demographic decline against Indian demand, labour and scale	Business environment — permitting, land, contract enforcement, tariff volatility
No historical baggage: no war, no territory, no diaspora grievance	Perception gap — decades of non-engagement left thin mutual knowledge
Japan’s need for a partner not dependent on the US alliance	Japan’s alliance discipline — in a crisis it acts with Washington
India’s need for capital that is neither Chinese nor conditional on alignment	India’s strategic autonomy: no alliance, no automatic alignment
Convergence of Act East with the Free and Open Indo-Pacific	Japan’s constitutional and industrial limits on defence exports
Institutional density — annual summits, two-plus-two, ACSA, seven exercise series	Institutional thinness where it counts — no joint planning, no combined command

• The drivers are structural and the brakes are structural too, which is why the relationship neither collapses nor accelerates. It has moved in one direction continuously since 2000 and at a rate neither government is satisfied with.
• Japanese support for the relationship crosses the domestic political spectrum.
  • The conservative nationalist constituency, uncomfortable with security dependence on the United States and clear that China is the principal threat, is among the warmest advocates of ties with India.
  • It sees a partner with comparable disputes with China, no history of colonising Japan, and no plausible reason to abandon it.
• The strongest driver is the one least often stated: each is the other’s insurance against American unreliability. Japan’s alliance is its security and its vulnerability; India’s partnership with Washington is deep and transactional. A hedge that is itself a democracy with no history of coercing either is scarce.

Multilateral and Human Ties

• Japan supports India’s permanent membership of an expanded Security Council and the two coordinate as members of the G4 with Germany and Brazil; Japan also supports India’s entry to the Nuclear Suppliers Group and, since 2026, full International Energy Agency membership.
• The two work together in the East Asia Summit, the ASEAN Regional Forum, the G20 and the Quad, and Japan is the only Quad partner with which India also runs a full development-finance relationship.
• The human relationship is unusually thin for a partnership this old. Roughly 50,000 people of Indian origin live in Japan, a fraction of the Indian presence in any comparable economy, though it is growing quickly in IT, engineering and services.
• Mobility is now policy. Japan’s demographic contraction has made labour a strategic import; memoranda on the Technical Intern Training Programme (2017) and Specified Skilled Workers (2021) cover fourteen sectors.
  • The 2025 action plan’s 50,000-person target is the first serious attempt to make India a source of skilled labour for Japan; immigration remains domestically contested there, which is the constraint.
• Cultural exchange runs on two rails — the classical register of Buddhism, Tagore and yoga, and a contemporary one in which Japanese animation, manga and gaming have a large Indian audience and Japanese language teaching is expanding under the Nihongo Partners programme.

The Scholarly Debate

Official commentary on this relationship is uniformly celebratory and the scholarship is not. The sceptical literature is the better half of it, and an assessment that does not engage it is not an assessment.

The sceptics

• Rohan Mukherjee calls it a marriage of convenience, and argues that academic and official assessments are far more ambitious than the actual state of affairs.
  • There is no military alliance; the two cannot balance China even together; and for all the talk of a rules-based order, neither alone nor jointly can enforce one.
  • He does not dismiss it. He identifies an implicit bargain in which each supplies what the other structurally lacks, and treats that pragmatism as the relationship’s real content.
• David Malone, in Does the Elephant Dance?, describes the relationship as tepid in reality: strategically rather than economically driven, with substantial Japanese disappointment at India’s economic policy, and with trade that remains insignificant beside Sino-Japanese or Sino-Indian volumes. The CEPA record since 2011 has vindicated him.
• Kanti Bajpai argues that, contrary to official pronouncements, India and Japan have never been close, and that while China’s rise makes a case for coming together, soft balancing is the better option — there is no gain in accepting the risks of confrontation at this stage.
• Victoria Tuke identifies a perception gap produced by decades of non-engagement: Japanese policymakers have read India as economically modest and peripheral to Asia’s core, Indian observers have doubted Japanese autonomy inside the American alliance, and the two diverge on how explicitly to name China.
• Pratnashree Basu locates the limits in structure rather than will: divergent geographies, different risk thresholds, unlike threat hierarchies, and an institutional architecture that produces signalling rather than interoperable capability. In a China contingency, Japan would act with the United States and India would calibrate narrowly around its own interests.
• Toshiro Nishizawa makes the economic version of the same point: business, not politics, drives Japanese investment in India, government targets have been repeatedly missed, and geopolitical motive alone does not move capital.

The alliance argument and its answer

• C. Raja Mohan, in The Case for Alliance, argues that India and Japan should go further than partnership. Both need insurance against wide oscillations in American policy; both live next to the same rising power; and a formal commitment would give the arrangement the credibility that loose alignment cannot.
• Rajesh Basrur, in India and Japan: Assessing the Strategic Partnership, replies that alliances are a Cold War form ill-suited to interdependence: partnership preserves flexibility, allows each to keep engaging the common adversary, and avoids entrapment in a partner’s quarrel. Indian practice has followed Basrur.
• Brahma Chellaney treats the two as the natural lynchpin of any Asian balance, on the ground that they are the only Asian democracies with the scale to matter, and faults both for underinvesting in the relationship.
• Jagannath Panda and Takenori Horimoto both argue that the partnership’s future lies in institutionalising the working level — supply chains, technology, third-country projects, defence-industrial links — rather than seeking a headline security commitment neither political system will supply.
• Tanvi Madan’s account of how the China factor has repeatedly reorganised India’s major-power relationships applies here directly: the alignment is China-driven, it has survived changes of government in both countries, and it should be expected to loosen if the Chinese pressure ever genuinely eases.
• The Kautilyan reading is the oldest version of the same logic. In the Mandala, a state’s neighbour is a natural adversary and the neighbour’s neighbour a natural friend — Japan as India’s mitra across China.
  • It is a real insight into the geometry and a poor guide to the content: it explains why the two should align, and nothing about why they find it so hard to trade.

“A free, open and inclusive Indo-Pacific is at the core of our Special Strategic and Global Partnership.”

— S. Jaishankar

Assessment

• The strategic case is settled and the economic case is not. Every security instrument that could reasonably be built between two non-allied states now exists; the commercial relationship remains at a level that would be unremarkable between countries with no strategic content at all.
• The relationship’s real achievement is that it is not conditional. Japan has never asked India to choose, never sanctioned it since 2001, never lectured it on Ukraine or Russian oil, and never made assistance contingent on political alignment. Among India’s major partners, that is rare.
• Its real weakness is that it is elite-driven and personality-dependent. The Modi–Abe relationship carried it for a decade; three Japanese prime ministers in three years have not disrupted it, which is evidence of institutionalisation, but the constituencies behind it in both countries remain narrow.
• The next five years have three measurable tests: whether the CEPA review produces a genuinely modernised agreement, whether the ¥10 trillion investment target is approached rather than announced, and whether the UNICORN transfer is followed by a second and a third.
• The most likely trajectory is continued deepening at the current unsatisfying pace — more agreements, more exercises, more finance, and a trade relationship that grows more slowly than the political architecture built to support it.

“Strong India is in the best interest of Japan and strong Japan is in the best interest of India.”

— Shinzo Abe