Pacific Hedge

Narendra Modi’s two-day visit to Japan comes at a moment of unusual strain in India’s relations with America. Donald Trump’s announcement of a steep 50 percent tariff on imports is likely to hit India’s micro, small and medium enterprises (MSMEs) the hardest. In response, India has tilted its diplomatic gaze elsewhere. Japan, with capital, technology and strategic alignment to spare, is the obvious partner.

The centrepiece of Modi’s trip was economic. Tokyo pledged to raise its investment target in India to ¥10 trillion ($67.9 billion) over the next decade, aimed particularly at small and medium enterprises and start-ups. The promise of patient Japanese money stands in stark contrast to Washington’s weaponisation of trade. For India, whose export sector already feels vulnerable, such commitments offer not just capital but a buffer against the knock-on effects of tariffs.

Technology and innovation loomed large. The two countries agreed to expand collaboration in artificial intelligence, digital partnership and high-speed rail. A joint initiative on economic security will cover critical supply chains, while the Indian Space Research Organisation and Japan’s JAXA will co-operate on the Chandrayaan-5 mission.

People-to-people ties are also being nurtured. Modi and Shigeru Ishiba, his Japanese counterpart, announced an exchange of half a million people over the next five years, including 50,000 skilled Indian professionals. Such flows will further deepen familiarity between societies and add ballast to a relationship that has too often relied on leaders’ summits and official communiqués.

The trip carried its share of symbolism. Modi and Ishiba boarded a Shinkansen bullet train to Sendai, where Indian drivers are training for the Mumbai-Ahmedabad high-speed line built with Japanese support. The PM stressed the complementarity between India’s emerging chip ecosystem and Japan’s advanced manufacturing. Both countries are positioning themselves as reliable nodes in a global semiconductor supply chain that has grown politically charged.

Green technology was another highlight. The leaders unveiled a partnership on sustainable fuels, a joint credit mechanism for clean-energy finance and a battery supply chain initiative. For two economies dependent on imported energy, such measures strengthen resilience as well as climate credentials.

The partnership now spans transport, space and energy as well as trade and investment. Crucially, it comes just as India frets about protectionist impulses in Washington. If America cannot be relied on to keep markets open, India will turn to others. Japan, with its capital, technology and shared anxieties about China, fits the bill.

There are limits, though. Japanese firms often grumble about India’s regulatory obstacles, while India sometimes over-promises and under-delivers. Yet the trajectory is clear. The two democracies are working to deepen a partnership that can withstand the vagaries of American politics.

The tariffs may not sink India’s trade with America. But they have the effect of nudging India into accelerating partnerships elsewhere. By turning to Japan, India has shown that the Indo-Pacific future will be shaped less by Trump’s tempests than by those prepared to invest in its long game.