What does the throws keyword in Java indicate?

throws is used in a method signature to indicate that the method potentially can throw the specified types of exceptions. It is part of the method's contract, informing the calling code about possible issues that need to be handled.

For example:

// The method can throw an IOException
public void readFile(String path) throws IOException {
    // File reading code
    // If an input/output error occurs, an IOException will be thrown
}

The calling code must either handle the exception with a try-catch block or declare it in its signature with throws.

This applies to checked exceptions, such as IOException or FileNotFoundException, which the compiler requires to be explicitly handled. Unchecked exceptions, such as RuntimeException, do not require declaration with throws, although it is permitted.