“As India’s merchandise trade deficit with Japan nearly tripled from $5.18 billion in 2015-16 to $15.4 billion in 2025-26, the government is reviewing the existing free trade agreement (FTA) with the island nation. While officials acknowledge that it is difficult for Indian exporters to make significant inroads into the Japanese market, they believe the pact can be better leveraged to attract higher Japanese investments into India.”
“Over the past decade, India’s imports from Japan more than doubled from $9.8 billion in 2015-16 to $21.43 billion in 2025-26, while exports increased only modestly from $4.6 billion to $6 billion during the same period.”
“India’s merchandise exports to Japan have largely remained subdued over the last decade, with only a couple of years registering positive growth. In 2025-26, exports to Japan declined 3.36%, following a sharp 21.2% increase in 2024-25. The steepest decline was recorded in 2016-17, when exports fell by more than 17%.”
“Japanese foreign direct investment (FDI) in India has increased in recent years, although it remains modest compared with Japan’s total outward FDI. Japanese FDI into India stood at $3.1 billion in 2023-24 and $2.48 billion in 2024-25, while it reached $3.2 billion in 2025-26 (up to December 2025). Cumulatively, from April 2000 to June 2025, Japanese investments in India amounted to $44.97 billion, making Japan the fifth-largest source of FDI into the country, according to official government data.”