Japan and India announce plans for semiconductor supply chain cooperation

As it became known on July 15, the governments of Japan and India are signing an agreement to establish a semiconductor supply chain.

Minister of Economy, Trade and Industry (METI) Yasutoshi Nishimura will visit India starting Wednesday 19th July and meet Indian Minister of Electronics and Information Technology Ashwini Vaishnaw. At that point, the two are expected to sign a memorandum of understanding.

Nishimura will also introduce a new “Japan-India Industrial Co-Creation Initiative” to strengthen bilateral economic ties. Japan hopes to strengthen its strategic partnership with India, which is part of the “quad” framework being organized by Japan, the United States, Australia and India to counter China’s growing power.

Nishimura will visit India and Bangladesh during his trip to the Indian subcontinent from July 19-25. During his stay in India, Nishimura will not only meet with VIPs but also attend the Group of 20 (G20) Energy Transition Ministers Meeting.

Diversification of the semiconductor supply chain

The proposed MOU on the semiconductor supply chain will require political dialogue between the two governments. He will also promote cooperation between the industries of both countries.

Semiconductors are critical to decarbonization and digitalization, and critical to economic security. Nonetheless, India relies on imports to meet its needs.

A top official at METI says, “Japan has strengths in manufacturing equipment and materials. India now has a large, highly qualified workforce. We want to build a win-win relationship.”

In addition, it is planned that Nishimura will launch the Japan-India Industrial Co-Creation Initiative in a speech he will deliver during his visit to India. It will also be on the agenda when he meets with Indian Trade and Industry Minister Piyush Goyal.

Supporting startups for economic growth

Under the motto “Creating Future Industries”, Nishimura will call for cooperation in the support of startups in addition to cooperation in the field of semiconductors. These are seen as a catalyst for economic growth. The goal is to gain insights from India, which is home to more than 100 “unicorns” (private companies with an enterprise value of more than $1 billion), the third largest number in the world.

Cooperation on clean energy sources such as hydrogen and ammonia is on Japan’s wish list. Given India’s status as a representative of the Global South (emerging and developing countries, particularly in the Southern Hemisphere). There is a desire to cooperate in promoting exports to Africa and other regions.

Nishimura aims to strengthen the framework for implementing this concept. To this end, the METI Minister will also announce the establishment of a new “Japan-India Industrial Cooperation Organization”. At the same time, he will announce a policy for providing financial support.

Nishimura’s visit will be accompanied by leaders of the non-partisan Japan-India Parliamentarians’ Friendship League (JIPFL), of which he is the chairman. The delegation also includes entrepreneurs involved in startups.

The aim is to deepen bilateral relations between Japan and India in the public and private sectors.

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