India and Japan Focus on Semiconductors and Resilient Supply Chains

via AP 

Indian and Japanese officials revealed plans for collaboration in critical technologies, including semiconductors and resilient supply chains, aiming to achieve a target of $35.9 billion Japanese investment in India by 2027. The Foreign Ministers of India and Japan, S. Jaishankar and Yoshimasa Hayashi, held a meeting in New Delhi on Thursday, during which they also discussed deepening defense equipment and technology cooperation. Hayashi's two-day visit to the Indian capital facilitated important discussions on various aspects of bilateral relations.

The disruption in the global supply of parts and raw materials due to Russia's war in Ukraine has led both countries to explore ways to ensure the continuity of production in diverse sectors, ranging from automobiles to computer chips.

During their meeting, Hayashi and Jaishankar emphasized the significance of a strong partnership between India and Japan in promoting an open and prosperous Indo-Pacific region based on inclusivity and adherence to rules. This partnership aims to address the growing challenges posed by an assertive China in the region. Discussions also encompassed cooperation under multilateral and plurilateral frameworks, including the Quad grouping, which includes the United States and Australia.

Japan considers India an essential partner in achieving a free and open Indo-Pacific, and Hayashi encouraged Japanese companies to invest in sectors identified by India as eligible for subsidies, including telecommunications equipment, automobiles, and applied chemical batteries. These collaborative efforts have already resulted in notable growth in Japanese investment in crucial technologies like medical equipment, electronics, and household electric appliances.

The two officials expressed satisfaction at the strengthening of defense and security cooperation between India and Japan, including regular exercises and talks involving all three services.

However, India faced a potential setback in its ambitions to establish a chipmaking industry, as Foxconn, a major electronics giant, withdrew from a $19.5 billion semiconductor joint venture with Indian mining conglomerate Vedanta Ltd. India had been actively promoting the development of a domestic chipmaking sector as part of its self-reliance policy to ensure stable supplies. The country has introduced financial incentives of up to 50% of project costs under a $10 billion plan for semiconductor and display manufacturing projects.

Despite challenges, India and Japan maintain strong economic ties, with trade between the two countries amounting to $20.57 billion in the fiscal year 2021-2022. The ongoing dialogues and collaborative efforts seek to strengthen this relationship further, fostering mutual growth and prosperity in the region and beyond.

Source: Associated Press (AP)