Tokyo [Japan], May 23 : Foreign Secretary Vikram Misri delivered the spotlight address at the 2nd edition of the Raisina Tokyo Dialogue, highlighting the multifaceted nature of the India-Japan partnership, including new greenfield sectors for cooperation.
Speaking on India's economic landscape at the event, Misri highlighted that the country continues to be a highly attractive destination for global capital, backed by strong foreign exchange reserves, declining inflation, and a large, young, and dynamic workforce. He noted that India's foreign exchange reserves have exceeded USD 690 billion, and retail inflation dropped to 3.16 per cent in April 2025, the lowest in nearly six years. With a population of 1.4 billion and a median age under 29, India remains one of the world's largest and most promising consumer markets. This demographic strength, combined with a rising middle class and an expanding workforce, positions India to play a key role in the technology-driven future.
He emphasized the strategic shift in India's economic model, with a renewed focus on manufacturing-led growth. The "Make in India" initiative, launched in 2014, has led to increased investment across diverse sectors, including electronics, defence, pharmaceuticals, and textiles. Misri highlighted the Production Linked Incentive Scheme, which is projected to attract USD 520 billion in investment and includes more than two dozen Japanese companies. India has also allocated USD 10 billion to develop a semiconductor ecosystem, while collaboration with Japan in this sector is expected to enhance talent and innovation on both sides. "We are also nurturing semiconductor-ready talent, which will supplement similar efforts by Japan to rediscover its traditional strength in this sector," he said.
India's electric vehicle sector is also undergoing transformation, supported by policies such as FAME-II and new incentives for battery manufacturing. As the world's fourth-largest vehicle producer, India is aiming to replicate the India-Japan success of Maruti-Suzuki in the age of electric mobility.
India has made significant reforms to foster a transparent and efficient business environment, liberalizing foreign direct investment (FDI) limits in defence, insurance, and space technology, while simplifying business compliance and tax structures. The country's ranking in the World Bank's Ease of Doing Business index improved from 142nd in 2014 to 63rd in 2020. Legal reforms have reduced over 39,000 business compliances and decriminalized hundreds of minor offences, streamlining enterprise operations.
The government has prioritized transparency and digital governance, with tools like the National Single Window System providing access to over 150 approvals and clearances. Initiatives such as MCA21 and GSTN have simplified filings and compliance for businesses. Misri said, "The simplification of India's complex labour regulations into four unified labour codes has reduced the compliance burden while balancing workers' rights with industry flexibility." He noted that the Goods and Services Tax has created a unified national market, while the Insolvency and Bankruptcy Code has transformed corporate insolvency resolution by ensuring time-bound processes and boosting creditor confidence.
Infrastructure development has been a major focus, with the PM Gati Shakti National Master Plan aligning investments across transport and logistics. The Bharatmala initiative aims to upgrade and construct 65,000 kilometres of highways, while Sagarmala is enhancing port infrastructure. The modernization of Indian Railways, full electrification, smart stations, and dedicated freight corridors have all contributed to reducing logistics costs and improving competitiveness. "Japan has been our preferred partner in urban mobility, with metro rail emerging as the new ambition of even second tier cities in India," he said, citing the Mumbai-Ahmedabad High-Speed Rail corridor as a flagship project in bilateral cooperation.
India's aviation sector is growing rapidly through the UDAN scheme, expanding regional connectivity and targeting the operation of over 200 airports by 2040. Integrated logistics parks are further improving freight movement. In energy, India is now the world's third-largest renewable energy producer, targeting 500 GW of non-fossil fuel capacity by 2030, with green hydrogen identified as a major area for future India-Japan cooperation.
The Digital India mission has revolutionized public service delivery, expanding e-governance, online education, and telemedicine. Misri noted that India's national AI strategy and rollout of 5G have democratized digital opportunities, fostering the growth of the startup ecosystem in areas such as fintech, agritech, clean energy, and health tech. India's space program, including missions like Chandrayaan and Gaganyaan, is now open to private enterprise and has become a major driver of innovation, with Japanese capital and expertise seen as potential partners for the future.
A parallel focus on education and skilling is equipping India's youth for the new industrial revolution, with India and Japan collaborating on training and language initiatives. Misri pointed to India's strategic positioning for manufacturing, digital empowerment, and infrastructure development, asserting that India is not only future-ready, but "shaping that future."
He underscored the importance of the Special Strategic and Global Partnership between India and Japan, calling it one of the most significant relationships of the 21st century. The bilateral partnership, he said, spans "Industrial Competitiveness, Clean Energy Partnership, Digital Partnership, Semiconductor Supply Chains, infrastructure development, energy, space, food-processing, science and technology, healthcare, and R&D cooperation." Trilateral initiatives, such as the India-Japan Cooperation Initiative for Sustainable Economic Development in Africa, reflect the growing scope of collaboration.
Japanese investment in India continues to grow, with Misri noting that in 2022, the countries set a target of 5 trillion yen in public and private investment and financing from Japan to India between 2022 and 2027, with 3.7 trillion yen realized by August 2024. He encouraged Japanese companies to expand in India and tap into its large pool of skilled personnel, saying, "Businesses in Japan must also recognise the immense pool of skilled personnel available in India to meet the changing needs of Japan."
He further urged Japanese businesses to broaden their engagement with India into sectors such as digital services, renewable energy, critical minerals, and semiconductors. "A broader trade engagement across sectors will not only unlock new business potential but also enhance economic stability, reduce over-dependence on concentrated markets, ensure supply chain resilience and strengthen long term economic security for both India and Japan."
Misri expressed confidence that the India-Japan partnership, rooted in mutual trust and shared principles, would drive sustainable growth, innovation, and prosperity for both nations well into the future.
The Foreign Secretary expressed deep appreciation for Japan's support in the aftermath of the April 22 terror attack in Pahalgam, Jammu and Kashmir. He acknowledged the solidarity extended by Japan and several colleagues present, reflecting the strength of the India-Japan relationship during challenging times.
"India is deeply appreciative of the support that is being extended by Japan, as we have dealt with the tragedy that took place on the 22nd of April in Pahalgam, Jammu and Kashmir in India," Misri said.
He stressed the need for global clarity on the issue of terrorism, urging against equating victims and perpetrators. "As we deal with the scourge that is terrorism that doesn't distinguish and that impacts everybody in the world from time to time, it is important that we don't equate the victim and the perpetrator of these attacks," he said.
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