By AFP and Focus | 2026-07-08

NEW DELHI -- India and Japan will work more closely on critical minerals to boost "resilience" in their supply chains, Prime Minister Narendra Modi said on July 2, as the two huge Asian economies look to cut dependence on top exporter China.

Both India and Japan depend on imports for many such minerals, used in everything from electric vehicles, solar panels and smartphones to jet engines and guided missiles.

They have been seeking new suppliers, including the United States and other countries, as China's dominance of rare earth element production may leave them vulnerable to changes in their ties with Beijing.

Chinese restrictions on Japan

China on June 29 highlighted Japan's vulnerability when it imposed export controls on 20 Japanese companies. The 20 firms became part of a growing Chinese blacklist in a months-long row with Tokyo.

These companies "participated in enhancing Japan's military capabilities," Beijing said.

Tokyo called the move "unacceptable and deeply regrettable" and demanded its reversal.

A joint statement by India and Japan on July 2 expressed "grave concerns" over non-market actions and said that "arbitrary export restrictions," particularly on critical minerals, could disrupt supply chains.

Forging supply resilience

The Modi-Takaichi summit held out hope of cooperation against such Chinese behavior.

"We have agreed to strengthen supply chain resilience in strategic sectors such as semiconductors, quantum technologies, and critical minerals," Modi said after talks with his Japanese counterpart Sanae Takaichi in New Delhi.

Japan and India are members of the Quad security alliance along with the United States and Australia, a group seen as a counterweight to China's expanding presence in the Indian Ocean and wider Asia-Pacific region.

Takaichi said both Japan and India were facing challenges such as "weaponization of the economy and non-market policies and practices."

"We need to urgently build resilience in our critical-mineral supply chains," she said in her speech.

Japanese and Indian businesses concluded investment deals worth $12.3 billion, the two sides said. They form part of a Japanese pledge to pour $68 billion into India over 10 years.

Cooperation between India and Japan "should not target" Beijing, China said July 3.

"Cooperation between nations ... should not target or harm the interests of third parties," Chinese Foreign Ministry spokesperson Guo Jiakun said.

Defense cooperation

India and Japan are exploring cooperation in other fields as well.

Modi said the countries had agreed to co-develop a naval radio antenna project aimed at boosting maritime surveillance. The system, called UNICORN (Unified Complex Radio Antenna), marks the first defense co-development project between the two countries, with Modi saying the effort is meant to boost "regional peace, maritime security and a rules-based order," according to Nikkei Asia.

New Delhi is particularly keen for Tokyo's aid in building up Indian defense manufacturing.

The two sides also issued a joint statement on artificial intelligence (AI). Pairing Japan's precision technology with India's software capabilities would give "new speed and strength" to global AI development, Modi said. Concurrently, officials signed a separate agreement on pharmaceuticals, medical devices and biotech aimed at global health security.

Asia's second- and third-largest economies identified economic security and energy resilience as key pillars of Indo-Japanese ties, Indian Foreign Secretary Vikram Misri said.

Trade between the two nations in 2025–2026 topped $27 billion, according to official figures from India.

Tokyo is backing India's high-speed railroad project with a major loan, and has supported key urban infrastructure and subway projects in several cities.