India and Japan share a multifaceted partnership encompassing defense, trade, investment, technology, education, culture, and people-to-people exchanges. Over the years, the relationship has strengthened, reflecting shared strategic interests, democratic values, and mutual aspirations for economic growth and regional stability. Continuous reciprocal visits of Prime Minister’s of both countries, and the  recent developments underscore a deep trust and broadening of this bi-lateral partnership across multiple sectors.

Over the last two decades or so India has continued to attract steady Japanese investments. With economic engagement forming the cornerstone of a successful partnership, in FY 2023-24, and 2024-25 bilateral trade remained well above USD 20 billion. The 15th India-Japan Annual Summit (2025) (“Annual Summit”) set a new target of JPY 10 trillion from JPY 5 trillion in private Japanese investment in India. Various initiatives such as the India-Japan Industrial Competitiveness Partnership (IJICP) aim to strengthen co-operation and bolster investments in logistics, textiles, food processing, agriculture, automotive, industrial capital goods, and MSMEs. Defense ties have also seen significant progress with multiple joint military exercises having been conducted. The Annual Summit emphasized the elevation of defense ties through a Joint Declaration on Security Cooperation to address contemporary geopolitical challenges.

Digital and technology collaboration has expanded between the two nations through the establishment of India-Japan Digital Partnership (IJDP, 2018), by focusing on start-ups, digital talent exchange, etc. and also including cooperation in semiconductor development. In November, 2024, India and Japan signed a Memorandum of Implementation (MoI) signalling enhanced technological collaboration.

Similarly, a number of other programs / initiatives have been taken between the two nations, covering areas such as skill development, healthcare, education and culture, people to people exchanges, etc. to promote a stronger all round bilateral relationship.

While the various initiatives over the years between India and Japan reflect a comprehensive, strategic partnership across defense, economy, technology, education, and people-to-people ties with  intensified collaboration in trade, AI, energy, healthcare, and skill development; various bilateral agreements, summits, and frameworks have strengthened trust and provided roadmaps for sustainable cooperation, showcasing India-Japan relations as a model for forward-looking bilateral engagement in the 21st century.

However, what needs to be ensured is that the various initiatives for promoting the bilateral co-operation does not remain only on paper and is implemented with full force. The various political complexities between Centre and State relations seen in India should not act as an impediment for the ease of doing business in India by Japanese companies. There is a need to ensure that the various schemes/policies of the State Governments and the Central Government be complementary to each other when it comes to attracting Japanese investment. Japan being one of the strongest ally of India should be given preference in doing business with special incentives which should be common throughout the length and breath of the nation. Additionally, Japanese investment focus centres should be set up in major cities with representatives of State Governments (including bi-lingual officials adept in speaking Japanese language) to assist and guide Japanese companies in their investments and endeavour to do business in such states. Although progress has been made to curtail bureaucratic lethargy and delays due to multiplicity of departments / permissions, much more needs to be done for simplifying the processes further. While there is no doubt that Governments are doing their best to attract investment and talent, it is also a reality that on account of the diverse culture, language barriers and complex structure of the nation, many Japanese companies, specially the MSME’s looking towards India, continue to remain hesitant in expanding their operations here. Finding the correct joint venture business partner remains one of the main areas of concern. To this effect, various organizations such as JETRO, JCCII, FICCI, PHDCC, and others promoting Indo-Japan bilateral relations could contribute immensely by facilitating in the finding of correct joint venture business partners in India for Japanese companies and vice versa to ensure long term smooth business operations. The ease of doing business in India would also necessarily include ease of dispute resolution. The right legal advise from the time of incorporation to initiation of business to continued business operations will also go a long way in ensuring the success of Japanese business in India. More emphasis ought to be given on alternative dispute resolution mechanisms such as mediation to resolve and/or reduce the number of issues between parties.

In conclusion, while Government to Government level activities continue to progress to promote and strengthen this strategic partnership; equally important is the focused and increased contribution from the industry, service and professional sectors of both the nations to truly make this relationship as a resounding success of cooperation among nations.

At the Japan Desk of SNG & Partners, we are proud to be able to contribute to the Indo-Japan Bilateral relations.

Ashish Kumar, Partner – SNG & Partners and Head of Japan Desk