Japan is demonstrating a strong commitment to fostering India's semiconductor ecosystem, viewing it as a crucial partnership for technological advancement and economic security. This commitment is underscored by significant investments, collaborative projects, and a shared vision for a resilient global supply chain.
In August 2025, Japan announced a $68 billion (¥10 trillion) investment plan in India over the next ten years, with a strong focus on the semiconductor and artificial intelligence (AI) sectors. This commitment signifies a major turning point in India-Japan relations, especially as both nations seek greater technological and economic independence. The plan is expected to help India accelerate its ambition to become a global semiconductor manufacturing hub, while providing Japan with a vital partner in South Asia's growing tech ecosystem.
The collaboration extends beyond financial investment. In July 2024, India and Japan signed a memorandum of cooperation aimed at the joint development of the semiconductor ecosystem. This partnership seeks to bolster semiconductor design, manufacturing, equipment research, talent development, and supply chain resilience. The agreement positioned Japan as the second Quad member, after the United States, to commit to enhancing India's semiconductor capabilities.
Several concrete projects have already emerged from this cooperation. These include Japanese semiconductor major Renesas Electronics partnering with CG Power to set up an Outsourced Semiconductor Assembly and Testing (OSAT) facility in Gujarat, collaborations with IIT Hyderabad and the Centre for Development of Advanced Computing under the Chips to Startup programme, and a strategic tie-up between Tokyo Electron and Tata Electronics to strengthen India's semiconductor ecosystem. In early September 2025, Tokyo Electron launched a new development hub in Bengaluru, focusing on semiconductor equipment design, software development, and joint research with Indian universities.
Japan's commitment also involves strengthening human capital ties. Japan aims to double the number of Indian technology specialists working in the country – from approximately 25,000 to 50,000 over the next five years. To facilitate this, Japan will offer language support, training programs, and smoother integration pathways for Indian professionals, especially in advanced technology roles.
India's domestic semiconductor market was valued at about US$38 billion in 2023 and is projected to reach around US$109 billion by 2030, driven by demand from smartphones, automotive electronics, industrial automation, and data centers. To reduce import dependence and attract fabrication and advanced packaging investments, the government launched the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India in 2021, with a total outlay of INR 760 billion (~US$10 billion) and the creation of the India Semiconductor Mission (ISM) as the nodal agency. As of late 2025, the government has approved 10 semiconductor projects across six states under ISM, with total investments of about INR 1.6 trillion.
This partnership between India and Japan is strategically important, especially given the current geopolitical landscape. By working together, India and Japan aim to create a resilient semiconductor supply chain that benefits not just their domestic markets but also the global technology ecosystem. Japan's expertise offers a pathway for India to achieve its ambitious semiconductor targets. For Japan, India provides a growing market and an opportunity to solidify its role in the global semiconductor landscape.
