Japan to unveil plan to invest $68 bn in India over 10 years in AI, chips

Japanese PM Shigeru Ishiba, who is scheduled to meet Prime Minister Narendra Modi on Friday, is expected to unveil plans to deepen the business ties between the two Asian countries

Japanese Prime Minister Shigeru Ishiba plans to invest ¥10 trillion ($68 billion) to boost bilateral business ties with India over the next decade, Nikkei Asia reported.

 

Ishiba, who is scheduled to meet Prime Minister Narendra Modi on Friday, is expected to unveil plans to deepen the business ties between the two Asian countries. PM Modi will be visiting Japan from August 29 to August 30 for the 15th India–Japan Annual Summit.

 

The two prime ministers will revise the countries' joint declaration on security cooperation for the first time in 17 years, Nikkei Asia reported. Both Tokyo and New Delhi plan to cooperate over the next decade, which includes the proposed ¥10 trillion investment from Japan. The initiative is expected to target eight priority fields, including mobility, the environment, and medicine. 

 

 

Focus on AI and semiconductors

 

According to the report, the investments will help Japanese companies in sectors such as artificial intelligence and semiconductors to expand into India. These companies will be employing Indian specialist workers as part of their plan to boost India's economy by building closer business ties between the countries.

 

The discussions between the two leaders will involve establishing an exchange of younger researchers in artificial intelligence, under an agreement called the 'AI Cooperation Initiative'.

 

The report suggests that New Delhi is interested in Japan's strength in the semiconductor sector, its related materials, and equipment. 

 

On Saturday, Ishiba and PM Modi will visit the Miyagi prefecture facility of Tokyo Electron, a leading chipmaking equipment manufacturer. The two leaders will also tour the company’s customer training centre, providing Japan with an opportunity to highlight its technological capabilities.

 

Tokyo plans to expand investments through official development assistance to help startups trying to enter the Indian market. The Japan International Cooperation Agency has already extended yen loans to startups in Telangana, the state that houses the country’s IT hub, Hyderabad.

 

Japan to support hiring of elite talent in India

 

Tokyo plans to support the hiring of elite talent in India, as the country is home to the world's largest population and has a pool of talented engineers. Japan plans to educate talent that can work as a bridge to help Japanese companies set up their shops in Indian markets.  

 

Ishiba, during his meeting with PM Modi, will also announce Tokyo's intention of taking in more specialist talent related to chips and technology. According to the report, in the last five years, as many as 25,000 Indians with specialised skills entered Japan to join the workforce or to complete study or training programmes.

 

It is worth noting that companies in Japan are already hiring Indian workers to address domestic labour shortages and encourage cooperation with Indian businesses.

 

Japanese companies look for Indian talent

 

Sompo Care, a subsidiary of Sompo Holdings and a nursing care provider in Japan, has already begun to hire and train Indian workers, with the first class of employees starting work after completing training at a facility set up in India by the company in 2024.

 

Sekisho, an energy company, is working on a matching programme that connects Indian students to Japanese businesses. Earlier this month, Sekisho formed an entity in India to provide support for students and companies, including Japanese-language education and job placement, with a focus on regional companies in Japan.

 

Japan expects a shortage of up to 790,000 workers trained in advanced technologies by 2030. In contrast, India produces about 1.5 million engineering graduates every year.