Why Assam Matters in the India-Japan Strategic Partnership: Geopolitics, Supply Chains and Northeast India's Gateway Role

Despite attracting less than one percent of India's FDI, Assam is gaining strategic importance in India-Japan relations. The state's location at the gateway to Southeast Asia aligns with India's Act East Policy and Japan's Free and Open Indo-Pacific (FOIP) vision.

Assam and Northeast India highlighting strategic connectivity routes under India-Japan cooperation and the Indo-Pacific framework

Assam has never been a potential destination for foreign investment in India. It accounts less than  1 percent of total FDI flow in the country. Owing  to geographical isolation, inadequate infrastructure,  and landlocked state, losing the benefit of mainland ports , the State is averse to foreign investors’ choice.

Notwithstanding, priority for “India Summit” by Japanese Prime Minister  in Assam perplexed  viewers and analysts. This is  against the backdrop of India emerging a key destination for Japanese investment in Asia since past two years.   India outsmarted China and ASEAN and  emerged the 2^nd biggest destination for Japanese investment in Asia.  

Are the geopolitical significance or the  late Japanese Prime Minister Shinzo Abe could not hold the Assam meet to establish a new gateway for economic penetration in South East Asia, are the main causes for choosing Assam for the summit. ?  The Annual India-Japan Summit, scheduled in Guwahati,  Assam , by the late Japanese Prime Minister Shinzo Abe in December 2019,  was cancelled due to widespread local protests and violence against CAA ( Citizen Amendment Act).

During the long period of Shinzo Abe’s Prime Ministership,  politicians and economists in both countries observed that the old approach of India-Japan relation was sagging and rallying behind keeping pace with the changing of geo-economic and geopolitical situations. Currently, India is no more only a destination for natural resource procurement for Japan. It has emerged an important gateway to South East Asia,  which turns vulnerable with the growing Chinese penetration in the region.

To this end, RCEP ( Regional Comprehensive Economic Partnership) and BRI (Belt and Road Initiative) are the triggers for Chinese influences.  They   accelerate Chinese presence in South East Asia region.  RCEP, comprising of 15 nations – ASEAN 10 +5 , including Japan – is a new challenge to global trade, without USA.   It is driven by China. It accounts for nearly one-third of intra-RCEP trade. India is not a member of RCEP.

Given China’s predominance in the trade block, fears mounted over Chinese predatory role  in the geo-economic situation in South East Asia. China  used this platform to increase its global geopolitical influence and the global trade power. China used similar aggressive moves in grabbing global power through BRI , where several smaller nations were dragged into unbearable debt burdens in the name of infrastructure development.

Eventually, the last visit of Japanese Prime Minister Fumio Kishida, in March 2022 , demonstrated a new vision for India-Japan relation. India’s Act East policy was re-energized , aligning with Japan’s FOIP ( Free and Open Indo-Pacific) strategy. The main aim is  to counter security threats and promote economic cooperation in Indo-Pacific area.  

Consequently, India-Japan Act East Forum  was established. The main aim of this forum is to give a joint institutional approach and establish the core platform for collaboration on economic growth in the region through infrastructure development and industrial linkage in India’s Northeast.

FOIP committed support through Japanese ODA ( Official Development Assistance) for development of infrastructure in India’s Northeast, paving the way for vital economic gateway to Southeast Asia.  

Prime Minster Sanao Takaichi never visited India.  Nonetheless, she is well versed with India, by virtue of her close contact with India through diplomatic channel to increase self reliance and economic revival through bilateral relation.

 Prime Minister Sanao Takaichi’s  assertion  towards  anti-China move  and build India as a new power house to counter China  could be one of the focus point of the summit in Assam . In recent statement in Japanese Diet ( Parliament), she feared that a Chinese attack or blockade of Taiwan could constitute a “ survival threatening situation” for Japan 

The converse  relationship between USA - Japan and China - Japan are significant in driving the Japanese economy and its global stake in trade and investment. USA is the biggest  destination for Japanese exports.  In contrary, China is the biggest source for Japanese imports, relying more on low cost supply chain. India, emerging a new supply chain destination, could be one of the motives for Japan shifting from China in the India Summit. Japanese Prime Minster, Sanae Takaichi, is accompanied by 50 leading Japanese corporate  in this summit.

Caught in the crossfire between USA’s  high tariff  and historical political conflicts with China, Japan is in disarray for  its dependence on external  economies and sustain its resilience to global trade and investment conundrum.  To this end, India emerges a new economic ally for Japan. It   opens   new opportunity  to combat  Trump’s threat of high tariff  and China’s growing influences in South East Asia.

Given the Japanese strategic shift from China, India vied for  better  alternative for supply chain manufacture.  India made a momentum growth in its electronic and electrical industries due to its policy dynamism. PLI scheme ( Productivity Linked Incentive) is a case in point. It catapult investment and growth in these sectors. Production of electronic goods   reached US$101 billion  in 2023-24 , from a mere US$48 billion in 2017-18

Trump’s high tariff  on  China and high transshipment tariff on  Vietnam opened  new opportunities for India to penetrate in USA market. It can outplace Vietnam , as it exempted from transshipment tariff.

USA is the biggest destination for India’s exports. Conversely, compared to the earlier basket of exports, electronics emerged the biggest item of exports in 2024-25,  leaving behind pharmaceutical , oil refinery products, diamonds and garment. These demonstrate India’s growing challenge to China and Vietnam.   

In sum , Assam emerged a new fulcrum for Japanese gateway to South East Asia and counter balance Chinese growing influence, signifying its role in Northeast .  

About the Author

S. Majumder,

Adviser , Research ( former) , JETRO (Japan External Trade Organization) New Delhi

Subrata Majumder is  former Adviser/Research Head of Japan External Trade Organization (JETRO), New Delhi office , India. He worked with JETRO over five decades.

He has been contributing regularly to national media, like Indian Press Agency, the Northlines, Millennium Post, South Asia Monitor, Echo of India  and international media like Eurasia Review ( USA) and Arabian Post (Dubai).  He is the author of “ Doing Business with Japan” ( 1994). He won JETRO’s global essay competition on the commemoration of JETRO’s 30 years  

(The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of JapanCalling.in, its editors, publishers, or affiliated organizations.)