Tariffs forge an India-Japan reset

When Prime Minister Narendra Modi last made a bilateral visit to Japan in 2018, the mood was one of optimism. Shinzo Abe was in office, the Indo-Pacific was a concept still gaining traction, and India-Japan ties were cast as a partnership of like-minded partners. Seven years later, as Modi returned to Tokyo, the context and the content of the partnership had changed dramatically.

The geopolitical backdrop, then, was also different. The US reliability was still largely taken for granted, even under President Trump. India and China, having just emerged from the Doklam standoff, were talking of a “Wuhan spirit” reset. Russia was not yet so isolated by sanctions. There was broad confidence that both nations could advance connectivity together within the framework of a relatively stable global order. Fast forward to 2025, and Modi’s meeting with PM Shigeru Ishiba unfolded against a far more turbulent world. Unsurprisingly, the two leaders had considerable ground to cover.

The bilateral agenda itself has grown more ambitious. Beyond bullet trains and infrastructure loans, the relationship now spans defence interoperability, semiconductor supply chains, and collaboration on AI. Underlying the visit was also a shared recognition that reducing overdependence on the US or China requires building robust capacity with the help of one another.

In 2018, Japan pledged ¥3.5 trillion in investments in India with an emphasis on “hard connectivity” through ports, industrial corridors, and physical infrastructure. This year, Japan committed more than ¥10 trillion in investments, shifting the focus to newer and emerging technologies. In a landmark agreement, ISRO and JAXA are set to collaborate on Chandrayaan-5, a joint lunar mission to the Moon’s south pole.

At the time, defence ties were important, but secondary to economic cooperation. With the adoption of the Joint Declaration on Security Cooperation, defence is now placed at the centre of the relationship. The focus is on interoperability, technology transfer, and co-development in advanced systems. Mobility initiatives were also limited, with Japan cautiously opening to skilled Indian workers in select sectors. Student exchanges were modest. Now, there is a commitment to facilitate the exchange of half a million workers and students, along with state-prefecture partnerships to embed cooperation at the subnational level. This underlines people-to-people connections, which have long been a missing pillar in Indo-Japanese ties.

The most immediate geopolitical shadow over the visit was cast not by Beijing, but by Washington. President Trump’s decision to impose a 50% tariff on certain Indian exports, citing New Delhi’s continued purchase of Russian oil, has generated unease in India. From New Delhi’s perspective, the move smacks of double standards since other major importers of Russian oil have not faced comparable penalties. For Japan, too, Trump’s protectionist turn has been disruptive, with trade negotiations abruptly being cancelled last week.

This shared experience of being mistreated by the US is a powerful catalyst in pushing India and Japan closer together. In essence, the tariffs are inadvertently accelerating a process that was already underway, compelling both nations to deepen their economic and strategic interdependence.

A counterpoint to China

Japan is central to India’s China strategy, not only as a Quad partner but also as a model of how to balance security cooperation with economic pragmatism. The choice to visit Tokyo before the SCO Summit in Tianjin signalled that India’s long-term bets remain firmly in the Indo-Pacific and with trusted partners, even as it engages China and Russia out of necessity.

Moreover, Modi’s choice to skip China’s victory day parade after the SCO summit is important in this regard. Held in Beijing to mark the end of the Second World War and Japan’s surrender, the event was accompanied by calls from the Japanese government urging world leaders not to attend. By absenting itself, India extended a quiet gesture of solidarity to Tokyo while still engaging Beijing at the multilateral table.

There is no doubt that the US remains central to the vision of a stable Indo-Pacific, but Trump’s indication to skip the Quad summit this year is hardly reassuring for the region. Without being held hostage to the whims of American foreign policy, the Quad is likely to endure as a dialogue and a platform for cooperation.

The tariff dispute has certainly forced India and Japan to prioritise a more robust bilateral relationship that can endure regardless of Washington’s mood swings. PM Modi’s return to Tokyo highlights how the partnership has undergone a qualitative transformation. It is now anchored not just in steel and concrete but also in silicon chips and space missions. The relationship reflects the times and is stronger for it.

(The writer is a research analyst with the Indo-Pacific Studies Programme at the Takshashila Institution)