India, Japan Deepen Trade Ties: PM Modi and Takaichi, Calling Ties 'Like an Elder-Younger Sister' Bond, Sign MoC Featuring $10 Billion Investment and AI Cooperation

Leaders sign Memorandum of Cooperation at 16th Annual Summit, covering defence, technology, energy and biotech partnerships

A New Chapter in Bilateral Ties

India and Japan advanced their trade and strategic relationship on Thursday by signing a Memorandum of Cooperation (MoC) and pledging deeper bilateral and global collaboration. The agreement was finalized during the 16th India-Japan Annual Summit, held at Hyderabad House in New Delhi, where Prime Minister Narendra Modi hosted his Japanese counterpart, Prime Minister Sanae Takaichi.

Prime Minister Narendra Modi and Japanese Prime Minister Sanae Takaichi

Wide-Ranging Agreements Signed

Following delegation-level discussions, the two nations formalized plans to work together on naval radio antenna systems and adopted a shared roadmap focused on economic security. They also committed to expanding cooperation across artificial intelligence, shipbuilding, biogas production, semiconductors, and other critical technologies.

A Warm Welcome, A Personal Touch

PM Modi extended a warm welcome to Takaichi, noting it was her first visit to India for the annual summit and highlighting her status as Japan's first female prime minister. He also pointed to her roots in Nara Prefecture, a region tied to the countries' shared Buddhist heritage. In a notably personal gesture during his address, Modi referred to Takaichi as his "younger sister."

A Shared Vision for the Indo-Pacific

Modi emphasized that both nations now rank among the world's largest economies and share a commitment to a free, prosperous, and rules-based Indo-Pacific region. He framed the day's agreements as steps toward regional peace, stability, and progress, given India and Japan's status as the area's leading democratic and market economies.

Investment Momentum Builds

On the economic front, Modi noted that roughly 120 new business agreements were finalized over the past year, expected to channel more than $10 billion in Japanese investment into India. A newly signed agreement between the two countries' financial services agencies is expected to further ease capital flow. Modi set an ambitious target: attracting 10 trillion yen in Japanese investment and doubling the number of Japanese firms operating in India within the next decade, aided by ongoing business-reform efforts.

Technology and AI Take Center Stage

Technology cooperation emerged as a defining theme of the summit, with Modi describing it as the strongest pillar of the countries' future partnership. India and Japan issued a joint statement on artificial intelligence, and several major Indian AI institutions signed agreements with Japanese counterparts. The two sides also discussed reinforcing supply chains in semiconductors, quantum technology, and advanced materials, alongside new decisions on energy security. Modi suggested that pairing Japan's precision engineering with India's software strength could give global AI development fresh momentum.

Defence Partnership Reaches a Milestone

The two countries marked a first in their defence relationship by signing an agreement for a joint co-development project involving the Naval Radio Antenna "Unicorn." This is the first collaboration of its kind between India and Japan, seen as opening a new phase in their defence-technology ties. Modi said the effort would focus on jointly developing technologies that support regional peace, maritime security, and a rules-based order.

Health and Biotech Collaboration

Beyond defence and technology, India and Japan signed agreements spanning pharmaceuticals, medical devices, and biotechnology. Modi described the goal as merging India's manufacturing scale with Japan's quality standards to deliver affordable and advanced healthcare solutions globally.

A Push Toward Renewable Energy

Modi also announced the India-Japan Biogas Initiative, under which 1,000 biogas and organic fertilizer plants will be established across India. He said the initiative would reinforce the country's GobarDhan scheme while supporting rural livelihoods and sustainability.

Ceremonial Welcome and Diplomatic Backdrop

Ahead of the summit, Takaichi received a ceremonial reception at Rashtrapati Bhavan, where Modi introduced her to Cabinet members and other officials. External Affairs Ministry spokesperson Randhir Jaiswal described the occasion as reinforcing a "special partnership" built on trust and shared values. The Indian delegation for the talks included External Affairs Minister S. Jaishankar, National Security Adviser Ajit Doval, and Foreign Secretary Vikram Misri.

Visit Details and Broader Context

Takaichi's visit to India runs from July 1 to 3, at Modi's invitation, with the summit serving as a platform to review bilateral cooperation and discuss regional and global issues. Diplomatic sources suggest the agenda also touched on maritime security, defence-technology collaboration, and plans for an "Industrial Value Chain" linking the Bay of Bengal with India's Northeast. The visit follows Modi's trip to Tokyo in August 2025 for the 15th Annual Summit, continuing efforts to strengthen the countries' Special Strategic and Global Partnership.