Subrata Majumder
China and ASEAN have always been the prime destinations for Japanese investment in Asia. But, there was a turnaround in the trajectory of investment destination with global trade tension intensifying. India emerged as the second biggest destination for Japanese investment in Asia, followed by China and ASEAN (except Singapore) in 2023 and 2024.
The seeds of a new era of overall India–Japan relations, including economic and political dynamism, were sown with the legacy of the Abe regime. The new era of India -Japan relations diversified from a mere bilateral economic relation to specific strategic relation, including defence and global partnership. The relation extended to a joint partnership for economic development in third countries, development of AAGC project (Asia Africa Growth Corridor), and the joint cooperation for development of Chabahar Port in Iran. The new era gave strong backbone to India-Japan special strategic and global partnership in political dynamism.
Giving strength to Shinzo Abe’s policy for combating China’s rise in power, followed by the COVID 19 pandemic, Japanese investment made a sharp downturn in China in the post Abe period. It fell from US$11,024 million in 2020 to US$3,305 million in 2024, leaving a big space for India to attract Japanese investment. Eventually, Japanese investment in India surged five times more in the post Abe period, from US$ 1,570 million in 2020 to US$5,341 million in 2024.
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