Chips over subs: Why Sanae Takaichi's India visit is about economics first

Japanese Prime Minister Sanae Takaichi's first official visit to India since assuming office marks a significant moment in India-Japan ties, but the biggest takeaway is unlikely to be defence cooperation. Instead, New Delhi and Tokyo are expected to focus on strengthening economic security through increased investments, semiconductor manufacturing, critical minerals, artificial intelligence and resilient supply chains.

Takaichi arrived in New Delhi on a three-day visit to participate in the 16th India-Japan Annual Summit with Prime Minister Narendra Modi. The visit comes at a time when both countries are seeking to diversify supply chains, reduce dependence on China for critical technologies and expand collaboration in high-value manufacturing sectors.

At the heart of the discussions is a push to elevate economic ties. Japan has committed to increasing its investment in India to more than $61 billion over the next decade, while bilateral trade has already reached $27.5 billion in FY2025-26. Nearly 1,400 Japanese companies now operate in India, with almost half engaged in manufacturing, underscoring Tokyo's growing confidence in India's industrial and consumer markets.

One of the key agenda items is semiconductor cooperation. India and Japan are expected to strengthen collaboration in chip manufacturing, research and development, and the creation of resilient technology supply chains. Alongside semiconductors, discussions will cover critical minerals, pharmaceuticals, clean energy, information and communication technology, and artificial intelligence—sectors increasingly viewed as essential for economic security.

The summit is also expected to produce several government-level agreements and around 120 memorandums of understanding (MoUs) between private companies from both countries. These agreements are aimed at boosting investment, facilitating technology transfer and encouraging collaboration across manufacturing, energy and digital sectors.

Infrastructure remains another cornerstone of the bilateral relationship. Japan continues to back flagship projects in India, including the Mumbai-Ahmedabad High-Speed Rail corridor, while discussions are likely to explore new opportunities in logistics, industrial corridors and urban infrastructure. Officials are also expected to discuss financial cooperation, including mechanisms to facilitate yen-rupee transactions and expand investment flows.

Although economics dominates the agenda, strategic and security issues will also feature prominently. As members of the Quad, India and Japan are expected to review cooperation in maintaining a free and open Indo-Pacific, maritime security and regional stability amid evolving geopolitical challenges. Defence collaboration, including technology partnerships, is expected to progress, though it is unlikely to overshadow the economic agenda.

The visit also reflects a broader shift in the India-Japan relationship. While previous engagements focused heavily on infrastructure financing, the partnership is now evolving towards advanced manufacturing, clean energy, next-generation technologies and supply-chain resilience. Analysts see this transition as a response to global geopolitical uncertainties and the growing importance of trusted economic partnerships.

With a large Japanese business delegation accompanying Takaichi, the summit is expected to reinforce India's position as a preferred destination for Japanese investment while helping both countries build a more secure and diversified economic partnership for the coming decade.