Authored by Alankrita Dutta
Since the beginning of June, Guwahati has been in a hullabaloo to host the 16th India-Japan Summit from July 1-3, 2026. However, the change of the Summit’s venue to New Delhi, just weeks before its commencement, comes as a missed opportunity for Assam and the larger Northeast (NE) to deepen its paradiplomacy with a dynamic Japan. This was nothing short of a déjà vu, as a similar diplomatic exchange between Assam and Japan was stalled seven years ago due to the CAA (then CAB) stir across the state. Assam being chosen as the host for a bilateral Summit of this stature is more than mere symbolism. It represents Northeast’s geostrategic pertinence, opportunities for a brimming demographic dividend and a chance to embolden the Region as a global investment hub. Given Japan’s diversified ODAs (Official Development Assistance) across NE, particularly in Assam, this partnership is set to sustain, though Takaichi’s presence in Dispur would have accelerated it. However, this episode raises the question -- Why have Assam and the NE been of continual interest to contemporary Japan, apart from the shared history of World War II?
Japan is grappling with a twin problem - an ageing population and a steadily declining birth rate. According to the World Economic Forum (WEF), more than 1 in 10 people in the country are 80 years or above. Over the years, this has quietly reshaped the archipelago nation. An ageing population has manifested in greater strain on Japan’s public finances as spending is directed towards healthcare and pensions. An elderly demographic has meant increased savings for retirement, thereby impacting the domestic demand for goods and services. This has consequently affected investment avenues across the country as an elderly population tends to save more and spend less. Given this, a labour shortage is knocking at Japan’s door, which is only set to increase to 11 million workers by 2040. In such a scenario, foreign workers have become an integral part of Japan's economy. Since 2008, the number of foreign workers has nearly quadrupled in sectors such as manufacturing, hospitality and services. To meet the labour shortage, Japan increasingly imports labour from Vietnam, China, the Philippines and Nepal. This is where Assam and NE come into the picture.
India is currently experiencing a bulge in its demographic dividend, with close to 65 per cent of the population falling within the working age group of 15 to 64 years. With a median age of 28 years, a young India, with the right policy mix, is poised to reap immense benefits from this. However, we face a paradox: a disproportionality between burgeoning workforce and dearth of jobs. This structural mismatch is glaring in NE, with high rates of youth unemployment across the region. NE thus presents itself as a hub-and-spoke centre for meeting both the country’s gaps.
Under the Action Plan for India-Japan Human Resource Exchange and Cooperation, Assam’s Chief Minister’s Foreign Language Initiative for Global Talent (CM-Flight) Scheme is a strategic step towards this. Japan’s willingness to offer the Specified Skilled Worker (SSW) visa to Assamese youth would address the former's labour shortage while providing placement assistance for the latter. Launched in 2025, more than 100 candidates are currently being trained under the scheme. However, with a growing international workforce, Japan has recently witnessed stricter visa rules and regulations. As of 2025, Japan hosts 2.57 million foreign workers. It remains to be seen how Takaichi’s government strikes a balance between meeting its labour deficit and welcoming foreign talent amid such developments.
An overarching argument that finds prominence in the India-Japan partnership is the geostrategic relevance of the Northeastern corridor. Tokyo-Beijing relations have been at their lowest since Takaichi’s remarks on Taiwan last November. Viewing bilateral tensions as a source of Japan’s ‘remilitarization’ efforts, China has imposed fresh export controls on 40 Japanese entities as of June 29.
Tokyo, akin to India, views China’s Belt and Road Initiative (BRI) with suspicion and advocates for a rules-based Indo-Pacific through its ‘Free and Open Indo-Pacific’ vision. As Japan attempts to reduce its trade surplus with China, NE offers a two-pronged advantage. First, a geopolitical alternative to the BRI and second, an avenue to diversify its supply chain through investment in infrastructure, manufacturing, connectivity, semiconductors, clean energy etc. As per government officials, Northeast will continue to be on ‘high-agenda’ at the Summit in New Delhi.
For more than a decade, Japan has been a key foreign direct investor in the NE. Be it JICA’s Guwahati Water Supply Project, the North East Road Network Connectivity Improvement Project connecting Assam and Meghalaya, or the Agriculture and Irrigation Development Project in Mizoram, Japan’s interest has been persistent. However, these projects grapple with structural challenges such as implementation delays, planning gaps and terrain-induced impediments. Secondly, Japan’s connectivity aspirations between the NE, Bangladesh and Myanmar face diplomatic barriers. For instance, JICA’s Matarbari Port in Bangladesh lies close to Myanmar's Sittwe Port, a major part of India’s Kaladan Multimodal Transit Transport project. However, any connectivity efforts now face impediments with a stifling India-Bangladesh relationship (since Sheikh Hasina’s ousting) and a military-coup-grappled Myanmar.
Japan stands to benefit from a rising NE. Faced with an ageing population and a belligerent China, NE offers Japan a de-risking avenue - helping build Japan’s strategic influence and filling its demographic gaps. However, India’s Act East vision should be cautious of a bio-diverse NE, avoiding treating the region as a unitary entity and recognising the varied investment alternatives each state offers. Further, India’s collaboration should not overly rely on an FDI-induced development model. It should adopt an approach that balances and counterbalances FDIs and harnesses the NE's inherent strengths and resources.
