Japan Plans to Pump Billions into Indo-Pacific

During his official visit to India from 20 to 21 March 2023, Japanese PM Fumio Kishida announced an updated plan for the Indo-Pacific. The plan supports the vision and strategy of Japan for a Free and Open Indo-Pacific (#FOIP). On the other hand, Japan is a key ally in India’s Act East foreign policy; and both are members of the #Quad.

Bilateral trade between Japan and India stood at USD 21 billion for FY 2021-2022. From 2000 to 2019, Japan’s #FDI into India cumulated at USD 38 billion.

As a matter of fact, one of the flagship cooperation projects between India and Japan is in the area of Shinkansen, or Bullet Train. Currently, a high-speed rail track between Mumbai and Ahmedabad is being implemented with the financial and technical assistance from Japan. The project started back in 2018 under late PM Shinzo Abe and now, the service is expected to launch by December 2023. The project is valued at USD 14 billion and during this visit, a 4th tranche of financing for the bullet train project in India was inked.

In total, PM Kishida pledged over USD 75 billion of financing in the #IndoPacific region for the period up to 2030 with India well-place to take the lion’s share. In fact, Japan believes India could be the ‘lighthouse’ guiding ‘like-minded countries with shared values’ in the Global South.

In a bid to deepen ties and boost exchanges, the two parties declared 2023 as ”The India-Japan Year of Tourism.” In turn, PM Modi suggested to proclaim 2024 as “The Year for Youth Exchanges between India and Japan.”

The next meeting between the two leaders is most likely to take place in the margins of the G7 Summit in Hiroshima in May 2023. Actually, Japanese PM Fumio Kishida personally extended an official invitation to his Indian counterpart Narendra Modi to attend given “the convergence of geopolitical and economic interests.”