Print

Trade, technology and investment: The expanding economic story of India and Japan

Economic cooperation has become one of the strongest pillars of India-Japan relations. The India-Japan Comprehensive Economic Partnership Agreement (CEPA) came into force on 1 August 2011, covering trade in goods and services, investments, movement of professionals, intellectual property rights and customs procedures. Under CEPA, tariffs were reduced on approximately 94 per cent of traded items by 2021.

According to the Ministry of External Affairs (MEA), India-Japan bilateral trade has witnessed consistent growth. During FY 2025-26, total trade reached US$27.48 billion, with India’s exports to Japan at US$6.04 billion and imports at US$21.44 billion. India’s key exports include organic chemicals, automobiles, aluminium products and seafood, while imports primarily comprise machinery, electrical equipment, copper, iron and steel, inorganic chemicals and nuclear reactor components.

Japan remains one of India’s largest investors. The MEA said that between April 2000 and March 2026, cumulative Japanese FDI in India stood at approximately US$48.14 billion, making Japan India’s fifth-largest source of foreign direct investment. Investments are concentrated in automobiles, electrical equipment, telecommunications, chemicals, financial services and pharmaceuticals. Nearly 1,500 Japanese companies operate in India through around 5,000 business establishments, while more than 100 Indian companies have established operations in Japan.

Major economic initiatives include the India-Japan Industrial Competitiveness Partnership, India-Japan Digital Partnership, cooperation in semiconductors, critical minerals, clean energy, artificial intelligence and supply chain resilience.

The MEA said that the two countries also launched an Economic Security Initiative in 2025 to strengthen collaboration in strategic sectors including semiconductors, telecom, pharmaceuticals and clean energy.

Japan is also India’s largest bilateral development partner. Since 1958, it has extended Official Development Assistance (ODA) supporting infrastructure, transport, energy and environmental projects. ODA disbursements during 2024-25 amounted to approximately 440 billion Yen. Flagship projects include the under-construction Mumbai–Ahmedabad High-Speed Rail Corridor, India’s first bullet train project, being developed with Japanese financial and technological support.

RELATED ARTICLES

7 hours ago | Domestic equity benchmarks ended sharply higher

Sensex surges 685 points, Nifty reclaims 22,750 ahead of RBI policy outcome

Domestic equity benchmarks ended sharply higher on Tuesday as investors accumulated pharma, private banking and oil & gas stocks while awaiting the outcome of the Reserve Bank of India's policy meeting. The Sensex rose 685.34 points, or 0.95 pe...

7 hours ago | SME Growth Fund

Cabinet approves Rs 10,000 crore commitment for SME Growth Fund

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved a government commitment of ₹10,000 crore towards establishing the SME Growth Fund to provide direct equity investments in small and medium enterprises and help them gro...

8 hours ago | Crude Steel Output

India’s steel consumption rises 7.5% in H1 FY27; crude steel output grows 2.9%

India’s finished steel consumption rose 7.5% to 84.9 million tonnes during April–September 2026, while crude steel production increased 2.9% to 85.1 million tonnes, according to provisional Joint Plant Committee data released by the Ministry of S...