Prime Minister Narendra Modi and Japanese Prime Minister Sanae Takaichi used the 16th India-Japan Annual Summit in New Delhi to broaden a strategic partnership built around defence, economic security, technology and regional stability, with both governments placing supply chains, clean energy and the Indo-Pacific at the centre of a new phase in ties.
The July 2 talks produced agreements covering artificial intelligence, energy resilience, critical minerals, metals, defence co-development and economic security. The two sides also moved to update their long-standing trade framework and set a target of attracting 10 trillion yen in Japanese investment over the next decade, while seeking to expand the presence of Japanese companies operating across the country.
The summit reaffirmed the Special Strategic and Global Partnership at a time when Asia’s economic and security architecture is under pressure from maritime tensions, fragile supply chains, energy shocks and intensifying competition over advanced technologies. Modi and Takaichi signalled that the relationship would now move beyond infrastructure and capital flows to include co-development, digital innovation and resilience in sectors considered vital to national security.
A joint roadmap on economic security placed emphasis on semiconductors, critical minerals, batteries, clean energy systems, telecom networks and next-generation mobility. The focus reflects concerns in both capitals over excessive dependence on concentrated supply chains, particularly in technologies that drive manufacturing, defence systems and green transition industries. Japan’s precision manufacturing base and India’s software capacity are being positioned as complementary strengths.
The defence component marked one of the most closely watched outcomes. Both sides agreed to deepen cooperation in defence equipment and technology, including co-development, while expanding military exchanges and exercises. The move fits into a broader pattern of closer coordination between the two countries in the Indo-Pacific, where both have backed freedom of navigation, respect for international law and a rules-based maritime order.
The leaders also condemned terrorism and violent extremism in all forms, including cross-border terrorism, and stressed the need to deny safe havens, financing and logistical support to groups involved in attacks. Security officials from the two countries are expected to continue consultations on regional threats, maritime domain awareness, cyber security and defence industrial collaboration.
Trade remains an uneven part of the relationship despite the political warmth. Bilateral trade stood at about $27.5 billion in the 2025-26 financial year, below the potential suggested by the size of the two economies. The decision to review and upgrade the Comprehensive Economic Partnership Agreement is intended to address market access concerns, improve trade diversification and encourage investment in manufacturing-led supply chains.
Japan has already become a key partner in major infrastructure projects, including the Mumbai-Ahmedabad high-speed rail corridor, industrial corridors and urban transport systems. The latest summit expands that cooperation into energy and digital infrastructure, with the two governments exploring LNG supply security, clean hydrogen, renewable energy, storage technologies and grid modernisation.
Artificial intelligence emerged as a prominent theme in the talks. The two sides agreed to promote joint work between research institutions, start-ups and industry, with attention to trustworthy AI, industrial applications and public-sector digital systems. The technology agenda also covers semiconductors, quantum technologies, space, robotics and advanced manufacturing.
Takaichi’s visit carried political significance beyond the agreements. As Japan’s first woman prime minister and a leader associated with economic security policy, she has sought deeper partnerships with countries that can help diversify Tokyo’s strategic and commercial exposure. Her engagement with Modi reflected Japan’s view that New Delhi is central to its Indo-Pacific, supply chain and investment strategies.
For New Delhi, the summit offered a chance to draw higher-quality investment into manufacturing, electronics, energy and transport while strengthening strategic alignment with a major G7 economy. The investment target is also linked to the wider push to turn the country into an alternative production base for companies seeking to reduce risk from over-concentrated manufacturing networks.
The partnership, however, faces practical challenges. Japanese companies have long cited land acquisition, regulatory complexity, contract enforcement and infrastructure gaps as barriers to faster expansion. Trade negotiators will also have to manage sensitive issues around tariffs, standards, services, data flows and procurement rules if the upgraded economic framework is to deliver measurable results.
