Amidst escalating trade tensions with the United States, Prime Minister Narendra Modi is currently in Japan, showcasing India's political and economic stability to attract foreign investment and strengthen strategic partnerships. This visit, his eighth to Japan since assuming office, underscores the importance India places on its relationship with Japan, particularly during a period of economic uncertainty.
Modi's visit occurs against the backdrop of a sharp downturn in relations with the U.S., triggered by President Trump's decision to impose a 50% tariff on Indian goods in response to India's continued purchase of Russian oil. The U.S. argues that these purchases are indirectly funding Russia's war against Ukraine. This has led to criticism from Indian officials, who point out that other countries, including China and those in the European Union, import more Russian oil but face lower tariffs. The steep tariffs, which took effect on August 27, 2025, are expected to significantly impact India's exports to the U.S., potentially jeopardizing billions of dollars in trade and hundreds of thousands of jobs in key sectors such as textiles, gems, jewelry, and seafood.
Despite these challenges, Modi is emphasizing India's strong economic fundamentals and its potential as a global investment hub. Addressing the India-Japan Economic Forum in Tokyo, Modi asserted that India offers political stability, economic stability, policy transparency, and predictability. He highlighted that India is the fastest-growing major economy in the world and is on track to become the third-largest economy soon. Modi noted that capital in India doesn't just grow, it multiplies, referencing a JETRO (Japan External Trade Organisation) report indicating that 80% of Japanese companies want to expand in India, with 75% currently making profits.
The Prime Minister also touted India's "reform, perform, and transform" approach, referencing key initiatives such as the Goods and Services Tax (GST) and reforms aimed at improving the ease of doing business. He emphasized the India-Japan partnership across various sectors, including metro projects, manufacturing, semiconductors, and startups, as a symbol of mutual trust. Modi underscored the potential for Japan's technological excellence and India's vast scale to create a perfect partnership for the future, particularly in emerging technologies like artificial intelligence, semiconductors, quantum computing, biotechnology, and space.
During the 15th India-Japan Annual Summit, Modi and Japanese Prime Minister Shigeru Ishiba are expected to review the Special Strategic and Global Partnership between the two nations. Key areas of focus include defense and security cooperation, economic and trade collaboration, technological innovation, and people-to-people exchanges. Both leaders are also expected to discuss regional and global issues, reaffirming their shared commitment to peace, prosperity, and stability in the Indo-Pacific region and beyond. India and Japan are also expected to frame economic and science and technology cooperation as the "backbone" of bilateral ties and encourage the unscaling of Japanese investments in India.
The visit also serves as a platform to reassure Japanese investors, with Japan consistently ranking India as a promising long-term investment destination. Around 1,400 Japanese companies already operate in India, and there are plans to deepen cooperation in digital technologies, clean energy, supply chain resilience, and skill development. Modi and Ishiba are likely to launch an economic security initiative focused on semiconductors, critical minerals, AI, telecommunications, and clean energy.
Following his Japan visit, Modi will travel to China to attend the Shanghai Cooperation Organisation (SCO) Summit in Tianjin. This underscores India's careful balancing act in maintaining strategic ties with both Japan and China.
