August 20, 2025

Japan and India Forge 10-Year Economic Security Partnership: Building a Resilient Supply Chain Beyond China

Japan and India will create a new cooperation framework to secure critical supplies vital for economic security. Under a 10-year action plan, semiconductors, essential minerals, artificial intelligence (AI), and other important fields will be set as priority areas, with governments leading efforts to encourage corporate investment and joint ventures. The aim is to develop a resilient supply chain less reliant on China by utilizing the strengths of both countries.

Six Priority Sectors for Collaboration

The upcoming decade will be a critical period for Japan-India partnership, with economic security at its center. The overall framework will cover six sectors: (1) semiconductors, (2) critical minerals, (3) communications, (4) clean energy, (5) science and technology including AI, and (6) pharmaceuticals, supporting each other from research and development to procurement.

Shared Challenge: Reducing Reliance on China

Both countries face the issue of depending too much on China. India relies on China for raw materials used in antibiotics and fertilizers, while Japan depends on Chinese imports of semiconductors and rare earth elements. Focusing procurement in specific countries or regions risks major supply chain problems during crises. As global efforts to diversify sources grow, Japan and India are strengthening their ties to protect their economies.

Rising Investment and Technological Potential

Japanese investment in India continues to grow. Direct investment is expected to hit ¥924 billion in 2024, more than triple what it was ten years ago. Meanwhile, India is strengthening its role as a center for emerging technologies, with top-tier research capabilities and a rapidly expanding start-up ecosystem.

Shinkansen Export Deal Nears Completion

An agreement is also expected on introducing East Japan Railway’s new E10 series rolling stock, developed for the Tohoku Shinkansen, to India’s high-speed rail project currently under construction. If finalized, it would mark Japan’s second Shinkansen export deal, following Taiwan High Speed Rail, which started operations in 2007.