India and Japan Make the Most of the Potent Tool of Human Resources

In a recent development, India and Japan have decided on a two-way exchange of human resources. It includes 500,000 personnel in five years, including 50,000 skilled personnel and potential talents from India to Japan.

At the 2025 India-Japan Annual Summit, the prime ministers of India and Japan agreed on the need to foster a deeper understanding between their citizens through visits and exchanges. They were aiming to create a new wave of people-to-people exchanges between the two countries.

This new collaborative avenue for their human resources strives to co-create values and address respective national priorities. Consequently, it becomes a zone of confluence for the efforts of various entities in government, industry, and academia. Meanwhile, the public and private sectors in both countries are endeavoring to expand the exchange of personnel to serve as a bridge between the two countries in the next generation.

This article examines the potential of labor diplomacy as a powerful tool of soft power diplomacy.

*A Tokyo Electron official explains the semiconductor manufacturing process. August 30, 2025 in Miyagi. (©Prime Minister's Office)*

The New Proposition

India and Japan are set to begin a new golden chapter in their bilateral relations. Prime Minister Narendra Modi called this partnership a "winning combination of Japanese technology and Indian talent.

The human resource exchange aims to capitalize on the manpower complementarities for joint research, commercialization, and value creation in both countries. This includes attracting skilled personnel and potential talent from India to Japan by bridging respective perception gaps.

Japan's population has been in decline since 2010 and is expected to continue declining in the future. An estimate from the Ministry of Health, Labor, and Welfare suggests a decline in the working-age population (ie, individuals aged 15-64) from 65.3 million in 2017 to 60.82 million in 2025, and then to 52.45 million in 2040. As a result, the population in this age group is expected to decrease by nearly 20% between 2017 and 2040.

Furthermore, a survey conducted by the Ministry of Economy, Trade, and Industry in April 2019 found that the demand for IT workers in Japan would exceed supply by 300,000 in 2020. That shortfall is expected to grow to 450,000 by 2030.

While Japan faces a manpower shortage, India has the world's largest population, with 1.42 billion people. According to updated data from the World Population Prospects 2022, 65% of India's population is of working age (15-64 years). More than 65% is under 35, and over 55% is under 30. And more than 50% is under 25. This demographic structure enables India to harness a unique demographic dividend.

India aims to boost skill development and strengthen its manufacturing sector. This means tapping economically beneficial complementarities in terms of human resources and promoting bi-directional cultural, educational, and grass-roots exchanges as an investment for the future.

Beyond the Horizon

Three categories of personnel are brought into focus. They are high-skilled personnel, students and researchers, and Specified Skilled Workers (SSWs). To enhance the flow of Indian engineering professionals and academic personnel to Japan over the next five years, special missions of Japanese companies are partnering with Indian higher education institutions.

*Prime Minister Modi and then-Japanese PM Shigeru Ishiba meet Indian trainees at East Japan Railway Company on August 30, 2025. (©Prime Minister's Office)*

This move aims to raise awareness of employment opportunities in Japanese companies in targeted fields, including semiconductors and artificial intelligence. It also includes conducting a survey of employment of Indian professionals in Japan, identifying best practices, facilitating awareness, and smoothing employment, leading to higher job placement and retention of Indian talent.

Furthermore, to overcome the challenging language barrier, the employment of English language assistant teachers from India in Japan is being promoted under the Japan Exchange and Teaching, or JET Program.

Expanding Into Education

There is an added focus on measures to promote student exchanges between India and Japan, as well as to streamline post-education internship and employment opportunities for Indian talent in Japan. For this, a bilateral high-level policy dialogue on education will be conducted between the Ministry of Education (MEXT) in Japan and its counterpart in India. Furthermore, the Inter-University Exchange Project, supported by MEXT, enables Japanese universities to conduct quality-assured international student exchange programs with partner universities in India.

These programs also include annual visits by Indian students and researchers to Japan under the Japan Science & Technology Agency Sakura Science Exchange Program. Other collaborative training initiatives include partnerships between IIM Nagpur and Japanese firms such as Suzuki to equip students with practical business and technical skills.

State-level programs, such as Assam's FLIGHT scheme, provide Japanese language training to thousands of youths, enabling them to explore employment opportunities in Japan.

Similarly, the SSW system facilitates the flow of Indian personnel over five years. It strives to cover 16 categories for employment in Japan. For this, an SSW test is conducted in India. Efforts are being made towards establishing new test centers for skill exams and Japanese language tests, covering the North, East, South, West, and Northeast regions of India.

In addition, under the Pravasi Kaushal Vikas Yojana program, India's Ministry of External Affairs supplements pre-departure occupational language training for eligible Indian SSW personnel. Furthermore, Japan has been included as a destination country in India's e-Migrate portal, creating a dedicated India-Japan corridor on India's National Career Service platform for safe, legal, and orderly recruitment of certified Indian personnel by Japanese employers.

Regional and People-to-People Ties

The new initiatives include the India-Nippon Program for Applied Competency Training. It provides subsidies toward the cost of endowed courses and vocational training programs offered by Japanese companies in India, as well as training for Indian personnel in Japan. India's Ministry of Skill Development & Entrepreneurship, National Skill Development Corporation (NSDC), and other stakeholders conduct programs on employment opportunities in Japan and Japanese language education through job fairs at universities. Similarly, they use targeted advertisement campaigns and social media outreach.

*Prime Minister Modi visits Tokyo Electron in Miyagi Prefecture. (©Prime Minister's Office)*

Additionally, human resources and talent exchanges occur through state-prefecture partnerships. These match the skill initiatives of Indian states with recruitment drives of companies located in the corresponding prefectures in Japan. They also include employer-employee matchmaking seminars organized by NSDC in Japanese prefectures.

Regional and people-to-people ties, including sister-city/state partnerships, are already in place. Nonetheless, the current bilateral drive further accentuates the decentralized approach through a state-prefecture permanent initiative. It encourages regional tie-ups between Indian states and Japanese prefectures, meaning opportunities won't be limited to capital cities and will expand to smaller towns and hubs in both countries.

Win-Win Situation

The new convergence aims to leverage Japan's industrial, managerial, and manufacturing competence to upgrade skill levels in India. It would produce a Japan-ready workforce on a large scale and unlock doors for increased people-to-people exchange. This creates immense opportunities in both countries beyond the next five years.

By collaborating, both countries aim to address genuine economic needs. India has one of the youngest and largest workforces. Meanwhile, the world's fourth-largest economy, Japan, faces an aging population. Together, Japan brings capital and cutting-edge technology, while India brings talent and a growing market.

The partnership is futuristic at its core. It creates "next generation" collaborations across eight core pillars, spanning ten years ahead, with the potential to become an economic powerhouse. Meanwhile, it envisions a ￥10 trillion JPY ($63 billion USD) private investment push to scale industries and create more jobs.

There are joint initiatives in semiconductors, critical minerals, biotech, AI, and space missions. Additionally, massive transportation projects in bullet trains, advanced metro systems, smart cities, aircraft, and shipping manufacturing are already in the operational stage.

New avenues include a focus on clean energy, the circular economy, quantum technology, and high-performance computing. In the field of health, collaboration in gene therapy, cancer treatment, and geriatric medicine, as well as the establishment of new centers for Yoga & Ayurveda in Japan, are sunrise sectors.

Human resources stand at the center of all bilateral exchanges, with initiatives focused on co-production, co-development, and mutually beneficial exchanges.

Conclusion

With one-third of its population over the age of 65, Japan requires a workforce, academics for research, and a market for its goods and services. Meanwhile, 65% of India's 1.4 billion population is under 35, creating rising pressure for increasing youth opportunities. This is particularly true amid stricter immigration policies in the United States, Europe, and Canada.

Both Japan and India have a long tradition of friendship and mutual goodwill. Their labor diplomacy is creating lifelong opportunities in terms of scholarships, global research programs, skill development schemes, and career pathways at home and in the world at large over the next decade. It positions the bilateral relation at a sweet spot while bringing the people of the next generation closer together. They have seized the opportunity at the right time.