Tokyo Bets Big on Delhi: EBC Unpacks ¥10 Trillion Investment

EBC Financial Group examines Japan’s jumbo-sized investment, its impact on trade flows, supply chains, and global markets.

NEW DELHI, INDIA, September 2, 2025 /EINPresswire.com/ -- Japan is preparing to double its investment target in India to ¥10 trillion (≈ USD 68 billion) over the next decade, announced during Indian Prime Minister Narendra Modi’s visit to Tokyo (29–31 August). Backed by nearly 100 Memorandums of Understanding (MoUs) signed between Indian and Japanese businesses, the initiative signals a global shift in how nations are building resilience across supply chains, technology, and energy security in the Indo-Pacific.

“Japan’s ¥10 trillion commitment is a strategic national move,” said Samuel Hertz, EBC Financial Group’s Head of APAC. “By anchoring India into its long-term economic and security framework, Japan is hedging against volatility while securing a reliable partner for supply chains and climate-tech collaboration.”

From Bilateral Investment to Global Strategy

Japan’s original commitment of ¥5 trillion in 2022 laid the groundwork for infrastructure and manufacturing projects. The new ¥10 trillion plan elevates that ambition, with projects ranging from Suzuki’s USD 8 billion investment to make India its global EV hub to a ₹2,500 crore green steel plant in Punjab. The scope now spans semiconductors, clean energy, digital partnerships, AI-led innovation, and pharmaceuticals.

The pledge comes at a critical moment for India, just weeks after Washington imposed new tariffs on nearly USD 87 billion of Indian exports. Analysts at EBC Financial Group (EBC) note that Tokyo’s capital provides both an alternative growth engine and a strategic counterweight, supporting New Delhi’s push to position itself as a resilient manufacturing and technology hub in the face of global trade headwinds.

Technology, Energy, and Human Capital

At the core of the agreement are a series of high-impact initiatives. A Digital Partnership 2.0 will link Indian startups with Japan’s advanced ecosystem in semiconductors, artificial intelligence, and critical minerals. A new Clean Energy Dialogue will focus on hydrogen, renewable energy, and carbon credit frameworks—ensuring that long-term growth is aligned with climate responsibility. EBC analysts say that this cooperation could create new demand cycles. For commodities, lithium and rare earths — Japan’s ESG commitments mean cleaner energy demand will accelerate sourcing competition worldwide.

Infrastructure development will also take centre stage, with confirmation that Japan’s next-generation E10 Shinkansen bullet train will be deployed for the Mumbai–Ahmedabad corridor. The agreement carries a human dimension too: pathways for 50,000 Indian professionals to work in Japan over the next five years, alongside targets for over half a million reciprocal visits.

EBC analysts comment that skilled Indian workers entering Japanese industries could lift productivity while deepening cultural and financial ties. For India, this means not only remittances and capital inflows, but deeper integration into the yen–rupee trade corridor.

“Japan’s ¥10 trillion commitment is less about cheque-writing and more about future-proofing global value chains,” added Hertz. “This is a long-term signal that capital, technology, and sustainability will converge in India, with ripple effects across global markets.”

A Regional Hedge Against Volatility

Beyond economics, the Tokyo summit is expected to see a revision of the 2008 Joint Declaration on Security Cooperation, deepening defense coordination between the two democracies. EBC analysts note that any enhancement of India–Japan security ties could serve as a regional hedge against mounting uncertainties - from South China Sea tensions to shifting US trade policies, including India’s recent exposure to Trump’s tariffs threatening nearly USD 87 billion in exports.

For New Delhi, closer ties with Tokyo are not only about balancing China but also reinforcing its “Make in India, Make for The World” strategy, diversifying export markets, and attracting investment into manufacturing and technology. As global supply chains fracture, India’s pursuit of deeper security and economic alignment with Japan signals a bid to position itself as both a geopolitical stabiliser and a growth hub.

Implications for Global Markets

For traders and investors, the ripple effects will be far-reaching. According to EBC analysts, there are three key areas to watch: Supply chain realignment could redirect flows of semiconductors, clean energy components, and critical minerals through India. Carbon markets and renewable-linked financing are likely to expand as the clean energy agenda gains traction. Meanwhile, long-term Japanese capital inflows may help stabilise the rupee–yen corridor, giving India access to lower-cost funding while offering Japan a more diversified outlet for its surplus capital. This FX dynamic could strengthen the rupee’s resilience against dollar swings while deepening yen-linked trade finance in the Indo-Pacific.

Disclaimer: This article reflects the observations of EBC Financial Group and all its global entities. It is not financial or investment advice. Trading in commodities and foreign exchange (FX) involves significant risk of loss, potentially exceeding your initial investment. Consult a qualified financial advisor before making any trading or investment decisions, as EBC Financial Group and its entities are not liable for any damages arising from reliance on this information.

For more insights on commodity markets visit www.ebc.com.

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Michelle Siow
EBC Financial Group
michelle.siow@ebc.com
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