India pitches its large market and expanding FTA network as a strategic advantage for Japanese companies seeking scale and global supply-chain opportunities
India can provide Japanese companies with the scale, market access and supply-chain capabilities needed to strengthen their competitiveness globally, Commerce and Industry Minister Piyush Goyal said on Monday, pitching the country as a strategic partner for Japan’s technology-driven economy.
Speaking in Tokyo during his four-day visit to Japan, Goyal said the strengths of the two economies complement each other, with Japan bringing advanced technology and business practices while India offers a large domestic market and economies of scale.
“One can clearly see that for an economy like Japan, which has very good technologies but not enough people, which has excellent business practices but not enough market, India can be an excellent partner which provides economies of scale with a large domestic market,” Goyal said.
He said India’s expanding engagement with the global economy, including through a growing network of free trade agreements (FTAs), makes it an increasingly attractive partner for Japanese businesses.
India, he added, is now a “trusted partner in global supply chains”, while closer cooperation with the country could give Japanese companies a competitive edge over rivals in other markets.
“For Japan to enjoy competitive advantage over other countries, working with India, will give it a natural edge,” Goyal said.
More from BusinessJapan investment target
Goyal’s comments come as India seeks to attract a larger share of Japanese investment into manufacturing, technology and emerging industries.
Japan had set an investment target of 10 trillion yen in India over the next decade, reflecting Tokyo’s long-term interest in expanding its economic presence in the country.
Goyal is leading a business delegation of around 200 representatives during his four-day visit, which covers Tokyo, Nagoya and Osaka.
The delegation includes companies and industry representatives from manufacturing, semiconductors, clean energy, steel, automotive, financial services, healthcare and start-ups.
The minister is holding meetings with senior executives of Japanese conglomerates and industrial groups, besides engaging with the Japan Business Federation, or Keidanren, which represents more than 1,500 Japanese companies.
Dedicated discussions are also being held on semiconductors, artificial intelligence, start-ups and foreign institutional investment.
Trade ties gain momentum
Bilateral trade between India and Japan rose 9.18 per cent to $27.47 billion in 2025-26 from $25.16 billion in 2024-25.
However, the trade relationship remains heavily tilted in Japan’s favour. India’s exports to Japan stood at $6.03 billion in 2025-26, while imports were $21.43 billion, leaving India with a trade deficit of about $15.4 billion.
The deficit had stood at $12.66 billion in the previous financial year.
Goyal has stressed the need for stronger economic ties to eventually produce a more balanced trade relationship between the two countries.
The two sides are also looking at a review of the India-Japan Comprehensive Economic Partnership Agreement (CEPA), which came into force in August 2011.
The seventh meeting of the India-Japan CEPA Joint Committee was held in Tokyo in March this year.
India has been pushing for changes to the pact amid concerns over the widening trade deficit. Domestic steel producers have also raised concerns over rising imports of Japanese steel products, while Japanese companies have flagged issues linked to India’s quality control requirements.
Japan among India’s top investors
Japan is the fifth-largest investor in India, according to the Commerce Ministry.
Between April 2000 and March 2026, India received $48.14 billion in foreign direct investment from Japan, accounting for about 6 per cent of total FDI attracted during the period.
New Delhi is seeking to channel more Japanese capital into sectors such as advanced manufacturing, electronics, semiconductors, automotive, clean energy and digital technologies.
Goyal is also expected to engage with Japanese investors and business organisations on expanding two-way investment and addressing operational issues faced by companies.
In Nagoya, the industrial hub of central Japan, the delegation will focus on manufacturing and engage with investors in sectors such as automotive and steel. The visit will conclude in Osaka with business and investor meetings covering electronics, industrial products and consumer sectors.
India’s FTA push
Goyal’s pitch to Japanese businesses also comes as India expands its network of trade agreements.
India is currently negotiating FTAs with at least eight to nine additional groups of countries and individual nations, which together represent another $15 trillion in GDP.
The minister has said India’s existing FTAs already provide preferential market access to economies worth around $70 trillion. With the agreements under negotiation, India expects its trade arrangements eventually to cover around 75 per cent of global trade.
India has signed nine FTAs over the past four years, covering 38 developed countries with a combined GDP of around $60 trillion. Earlier trade arrangements with Japan, South Korea and the ASEAN region cover economies accounting for another $10 trillion.
For New Delhi, the FTA strategy is increasingly tied to its ambition of becoming a larger part of global value chains rather than simply expanding merchandise exports.
India’s scale, Japan’s technology
Goyal’s message in Tokyo is built around the complementary strengths of the two economies.
Japan has global expertise in advanced manufacturing, technology, automobiles, machinery and industrial processes. India, meanwhile, offers a vast domestic market, a large workforce, a growing manufacturing ecosystem and expanding access to international markets.
As global companies reassess their supply chains amid geopolitical and trade uncertainties, India is seeking to position itself as a stable production and investment base.
