WHY INDIA IS SEEKING A NEW SUNRISE IN JAPAN

India missed out on Japanese investment in its initial post-reform years. That could change now

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Prime Minister Narendra Modi with his Japanese counterpart Shigeru Ishiba, during a press conference in Tokyo, Japan, on 29 August.

(REUTERS)

Japan has set a target of investing 10 trillion yen (about ₹60,000 crore) in India over the next decade, following talks between the Indian Prime Minister and his Japanese counterpart last month.

The two governments presented a joint roadmap to deepen their partnership through greater economic, security and ecological cooperation. At a time when old alliances are under threat from geopolitical tensions, the prospect of furthering a productive and friendly relationship with Japan is a welcome development.

As countries go, Japan and India are studies in contrast. Japan is a small, modern, developed country. It is safe and clean, largely homogenous in language and ethnicity, with a population that is known to be orderly and civic minded. India, on the other hand, is large, developing, diverse, multilingual, multi-religious and chaotic. But despite the disparities, or perhaps because of them, Japan and India complement each other very well, making them ideal economic and business partners. What makes the India-Japan partnership special are three latent synergies.

First, the countries have diametrically opposite, yet complementary, demographic structures. In 2024, 30% of Japan's population was estimated to be 65 years or older and 11% were in the 0-14-age group. The corresponding numbers for India are 7% and 25%, respectively. This difference shows up in the share of the population aged 15-64 years or working age population. This is 59% for Japan and falling, versus a stable 68% for India. Simply put, Japan is an ageing economy (median age nearly 50 years), while India has a young population (median age just under 30 years).