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Japan is set to provide up to 80 billion yen (around $492 million) in financing for a major electricity transmission project in India, marking the first initiative under a new regional energy cooperation framework aimed at strengthening clean energy infrastructure and economic security across Asia, Nikkei Asia reported.
The financing package, led by the Japan Bank for International Cooperation (JBIC) along with Sumitomo Mitsui Banking Corp. (SMBC), Kansai Mirai Bank and other lenders, is expected to be one of the key outcomes of the 16th India-Japan Annual Summit, the report said.
The announcement comes as Japanese Prime Minister Sanae Takaichi received a ceremonial welcome at the forecourt of Rashtrapati Bhavan, where Prime Minister Narendra Modi welcomed her with a Guard of Honour before both leaders introduced their ministerial delegations and proceeded to Hyderabad House for summit talks.
Takaichi, who arrived in New Delhi on Wednesday evening for her maiden three-day official visit to India since taking office, was received at the airport by Minister of State Jitendra Singh.
Ahead of the summit, Modi said on X that he looked forward to “wide-ranging talks” that would further strengthen the India-Japan Special Strategic and Global Partnership while advancing “peace, stability and prosperity across the Indo-Pacific.”
The Japanese Cabinet Public Relations Office also posted on X: “Our heartfelt thanks for your warm welcome. We are very much excited to be visiting India!”
First project under POWERR Asia
According to Nikkei Asia, the power transmission financing will become the inaugural project under POWERR Asia, a new regional energy cooperation framework proposed by Takaichi and spearheaded by JBIC to accelerate energy transition projects across Asia.
The funding will support a high-voltage direct current (HVDC) transmission project being developed by state-owned Power Grid Corporation of India.
The project will connect the massive renewable energy hub under development at Khavda in Gujarat with Nagpur in Maharashtra through an approximately 1,200-kilometre transmission corridor.
The transmission line is expected to begin operations in 2029, with the overall project estimated to cost around 550 billion yen (approximately $3.4 billion).
HVDC technology enables electricity to be transmitted over long distances with lower losses than conventional alternating current systems, making it particularly suitable for integrating renewable energy generated in remote locations into the national grid.
The financing is also expected to boost adoption of HVDC technology in India, an area where Hitachi Energy, a subsidiary of Hitachi, has established a strong presence. Its Indian operations and affiliated companies have already secured orders for transmission and distribution equipment linked to the project, Nikkei reported.
Clean energy, semiconductors and economic security on agenda
Beyond the power grid project, the summit is expected to produce a broad package of agreements spanning clean energy, advanced manufacturing and economic security.
According to Nikkei Asia, Modi and Takaichi are expected to unveil measures to support the production of green hydrogen and renewable ammonia in India as both countries seek to reduce dependence on imported fossil fuels and accelerate decarbonisation.
The two leaders are also expected to issue a Joint Declaration on Economic Security Cooperation, covering strategic sectors such as semiconductors, pharmaceuticals and resilient supply chains.
Japanese media reports also suggest that Japanese private companies are preparing to announce nearly $12.5 billion in investments across around 120 cooperation agreements aligned with the summit, highlighting growing corporate confidence in the Indian market.
Officials are also expected to discuss strengthening supply chains in critical minerals, artificial intelligence, pharmaceuticals and semiconductor manufacturing, while reviewing progress on flagship infrastructure projects such as the Mumbai-Ahmedabad High-Speed Rail corridor.
Another issue expected to feature prominently is a proposed rupee-yen settlement framework, which aims to facilitate bilateral trade by reducing reliance on the US dollar.
Strategic partnership expands beyond infrastructure
India and Japan have steadily expanded cooperation beyond traditional infrastructure financing to include defence, technology, critical minerals, clean energy and economic security.
The summit is also expected to review defence cooperation, including joint military exercises and collaboration under the Quad, as both countries seek to promote a Free and Open Indo-Pacific (FOIP) amid growing geopolitical uncertainty.
Following their bilateral discussions at Hyderabad House, Modi and Takaichi are scheduled to witness the signing and exchange of several Memorandums of Understanding (MoUs) before addressing a joint press conference.
Takaichi will later address the India-Japan Business Forum at the Taj Palace, where Japanese and Indian industry leaders are expected to discuss investment opportunities and commercial partnerships before she concludes her visit on Friday.
Supporting India’s energy transition
India has rapidly expanded renewable energy generation over the past decade, but much of its solar and wind capacity is located far from major demand centres.
Khavda, situated in Gujarat’s desert region, is emerging as one of the world’s largest renewable energy parks, making modern transmission infrastructure essential to integrating renewable electricity into the national grid while reducing transmission losses.
India imports nearly 90 per cent of its crude oil requirements, making energy diversification a strategic priority. According to Nikkei Asia, Japan views the financing as a way to help India reduce its dependence on imported fossil fuels while strengthening the economic resilience of one of its most important strategic partners in the Indo-Pacific.
