India-Japan trade reached a record $27.48 billion in FY2025-26, but the number also exposes the central challenge in the relationship: India exported just $6.04 billion to Japan while importing $21.44 billion.
Against that backdrop, Commerce and Industry Minister Piyush Goyal is in Japan with more than 200 Indian business representatives, seeking to expand investment, technology partnerships and market opportunities across manufacturing and emerging industries.
A Bigger Push For Japanese Capital
Goyal’s August 24-27 visit covers Tokyo, Nagoya and Osaka and includes India’s largest-ever business delegation to Japan, according to the Commerce Ministry. The delegation spans manufacturing, semiconductors, clean energy, steel, automotive, financial services, healthcare and start-ups.
The timing follows a significant upgrade in the investment relationship. India and Japan agreed in 2025 to facilitate JPY 10 trillion in private investment from Japan to India over the next decade. At their 16th Annual Summit in July 2026, the two governments reviewed progress towards that target.
Modi subsequently urged businesses to ensure Japanese investment exceeds the JPY 10 trillion mark over the next decade.
This is a private-investment target, rather than a claim that Japan has already committed or transferred the entire amount.
Trade Growth Masks Imbalance
The investment push comes alongside a persistent trade imbalance.
India-Japan bilateral trade rose from $25.17 billion in FY2024-25 to $27.48 billion in FY2025-26. However, India’s exports declined from $6.25 billion to $6.04 billion, while imports increased from $18.92 billion to $21.44 billion.
The result was a trade deficit of roughly $15.40 billion for India in FY2025-26.
India’s major exports to Japan include organic chemicals, vehicles, nuclear reactors and machinery, aluminium and fish and aquatic products. Its imports include nuclear reactors and machinery, copper, electrical equipment, inorganic chemicals, and iron and steel.
That composition helps explain why investment is strategically important. Greater Japanese manufacturing capacity in India could potentially allow more production to take place locally while integrating Indian operations into Japanese and global supply chains.
Technology Moves Centre Stage
The current delegation is not focused only on conventional manufacturing. The government has scheduled dedicated sessions in Tokyo on semiconductors, artificial intelligence and start-ups, alongside engagement with foreign institutional investors. In Nagoya, discussions will focus on automotive and steel investors, while the Osaka programme includes electronics, industrial and consumer companies.
That agenda reflects the direction of the wider partnership. At the July 2026 summit, India and Japan adopted agreements covering economic security, artificial intelligence and energy resilience, while also expanding cooperation in areas including semiconductors and critical technologies.
The relationship also has an established trade framework. The India-Japan Comprehensive Economic Partnership Agreement has been in force since 2011, and its implementation was reviewed at the seventh Joint Committee meeting in Tokyo on March 2, 2026. Indian officials specifically called for more diversified and balanced trade and greater use of CEPA’s export opportunities.
Test Is Execution
For India, the opportunity is larger than attracting another round of foreign capital. Japanese investment can support manufacturing capacity, technology transfer and integration into higher-value supply chains, particularly in sectors such as semiconductors, automotive, clean energy and advanced industrial production.
But the trade numbers show why investment alone is not enough. India needs Japanese-linked production to translate into higher exports from India, rather than simply expanding the country’s import bill.
Goyal’s delegation therefore arrives with a dual objective: attract more Japanese investment while creating conditions for Indian companies and India-based manufacturing to gain greater access to the Japanese market.
The success of the partnership will ultimately be measured not by the size of announced targets, but by factories built, technology transferred, exports generated and investments actually deployed.
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