India, Japan sign first joint defense deal at 16th summit
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- India and Japan signed pacts on AI, metals, energy, and economic security at their 16th annual summit in New Delhi on July 2, with PM Modi citing the "convergence of Japan's precision technology and India's software capabilities" for global AI development.
- The summit produced their first joint defence co-development project, a milestone Modi announced as an agreement in the defence sector.
- Modi launched the India-Japan bio-gas initiative, committing to build 1,000 bio-gas and organic fertiliser plants in India.
- Bilateral trade between the two countries reached US$27.5 billion in fiscal year 2025/26, according to Indian government data.
- Japanese investment in India totalled US$3.2 billion between April and December 2025, including a US$1.6 billion deal for a 20 per cent stake in Yes Bank.
- Japan continues backing major Indian infrastructure projects, including the Mumbai-Ahmedabad high-speed rail corridor.
Why it matters: The first joint defence co-development project elevates the relationship beyond previous procurement-only ties, and the $3.2 billion investment pipeline — anchored by a $1.6 billion Yes Bank stake — shows Japanese capital deepening its foothold in Indian financial and infrastructure sectors at a time when bilateral trade already stands at $27.5 billion.
