On October 21, 2025, Japan entered a historic chapter with the election of Sanae Takaichi as its first female prime minister. She took charge of the ruling Liberal Democratic Party (LDP) and was confirmed by the lower house of the Diet, becoming the 104th Prime Minister of Japan.
Takaichi’s political career has been influenced by her long-standing connection with the late Shinzō Abe and his economic and national-security priorities. As one of Abe’s protégés, she combines conservative social views, nationalist tendencies, and strong support for aggressive fiscal and monetary stimulus.
Domestically, her election is a significant milestone in a nation where female political leaders have been uncommon. Politically, her rise represents more than just a gender milestone. It indicates a rightward shift in Japan’s politics. To form a coalition, the LDP moved away from its long-standing partnership with the Komeitō party and instead struck a deal with the reform-focused Japan Innovation Party (JIP) just days before her election. This change ushers in a new phase of intra-party realignment and a focus on bold economic stimulus, constitutional changes, and a stronger defense strategy.
In terms of the economy, one of Takaichi’s first actions will likely be a significant stimulus package aimed at addressing inflation and supporting households. Sources indicate she is preparing a package that could exceed last year’s ¥13.9 trillion (around US$92 billion) supplementary budget. This package will focus on inflation relief, growth industries such as AI and semiconductors, and national security investments. At the same time, she takes on a major financial commitment to the US. The previous administration promised about US$550 billion for US-Japan projects, and Takaichi must now figure out how to fund that without harming Japan’s financial credibility.
Geopolitically, Takaichi’s leadership will be closely observed in East Asia and beyond. Her nationalist views include a preference for revising the pacifist Article 9 of the Japanese Constitution and even envisioning a “quasi-security alliance” with Taiwan, which suggests a tougher stance toward China. Additionally, she has pledged to strengthen the Japan-US alliance during Donald Trump’s upcoming visit.
In Japan’s political landscape, her time in office may reflect both continuity and change. There is continuity as she aligns with Abe-era policies; change emerges from her dealing with a more fragmented parliament, a weaker LDP majority, and a new coalition partner. Her government will need to rely on legislative coalitions and cooperation across parties, making stability uncertain. Analysts caution that investor enthusiasm could be premature if she merely restates old policies without addressing new challenges.
For India, Takaichi’s election coincides with growing strategic alignment in the Indo-Pacific. Her campaign and early remarks show a willingness to strengthen ties with India. Prime Minister Narendra Modi has already extended warm congratulations and expressed eagerness to work closely with her to enhance the India-Japan “Special Strategic and Global Partnership.”
His relationship with Abe is significant. He is largely credited with fostering one of the strongest periods in India-Japan relations, marked by increased defense cooperation, infrastructure investment, and alignment within the Quad (Quadrilateral Security Dialogue). Takaichi is expected to maintain and possibly enhance these connections. In this context, India can expect greater Japanese engagement in defense manufacturing, key technologies, supply-chain diversification, and regional security frameworks.
However, there are limitations. Takaichi’s focus on Japan-first nationalism and stricter immigration policies might restrict the extent to which Japan is willing to expand labour and people mobility agreements with India. Her aggressive fiscal stimulus could also limit Japan’s ability to support new international development projects in the short term. From India’s viewpoint, taking advantage of this moment will require active diplomacy, particularly if Japan becomes distracted by domestic economic issues or regional security tensions with China.
In diplomatic terms, a meeting between Modi and Takaichi is anticipated on the sidelines of upcoming ASEAN and East Asia forums. Reports suggest Modi may meet her in Kuala Lumpur, highlighting the common regional platforms where India and Japan cooperate.
Looking ahead, Takaichi’s term may focus on three main areas: significant fiscal stimulus to fight inflation and boost growth, a bold shift in security and foreign policy especially regarding China and Taiwan, and a reassessment of Japan’s domestic politics centered around coalition building and conservative social policies. Japan’s relationship with India is likely to deepen, particularly concerning shared goals of balancing China, securing supply chains, and building an Indo-Pacific framework inclusive of technology and defense ties.
However, the path forward is fraught with challenges. Japan’s massive public debt, declining population, slow growth, and the need to manage an assertive China all present obstacles. Takaichi must handle her fiscal promises, coalition dynamics, and regional tensions credibly. For India, the opportunity is available, but only if Japan remains focused on external engagement rather than internal consolidation.
The election of Sanae Takaichi represents more than a symbolic breakthrough. It signals a new phase for Japan: an economically proactive, security-focused nation aligned strategically with India and the US, while navigating a fragmented domestic environment. How she manages this transition will be crucial not just for Japan, but for the entire Indo-Pacific region.
