India–Japan trade at $22.85 billion in FY24; Modi’s first post-Trump tariff visit puts focus on boosting ties

Business News:Prime Minister Narendra Modi’s two-day visit to Japan is not just another diplomatic stopover—it comes at a turning point for India’s economy. With the United States recently imposing a steep 50 percent tariff on Indian goods, concerns about trade shocks and export slowdowns have been running high. Against this backdrop, Japan, one of Asia’s strongest economies and a longtime partner of India, has emerged as a key ally in navigating this uncertain global environment.

For India, Japan is more than a trading partner; it is a country that has stood by New Delhi during crucial economic shifts. As Modi touched down in Tokyo, the focus was not only on strengthening ties but also on finding new ways to cushion India’s economy from the global turbulence created by protectionist policies.

Trade Relations at a Glance

In the financial year 2023–24, bilateral trade between India and Japan stood at US $22.85 billion. Of this, Japan exported nearly $18 billion worth of goods to India, while India exported around $6 billion in return. While the trade balance tilts heavily in Tokyo’s favor, the relationship is far deeper than numbers. Japan has been one of the top investors in India, with foreign direct investment (FDI) worth over $43 billion between 2000 and 2024.

On the ground, Japanese investments have powered projects ranging from the Delhi Metro to high-speed rail, reflecting how the partnership translates into real-life infrastructure that millions of Indians use every day.

What Flows Between the Two Nations

India’s exports to Japan highlight the strength of its traditional industries and emerging sectors. From engineering goods, chemicals, marine products, gems, jewelry, and electronics to pharmaceuticals, Indian businesses have carved out a strong space in the Japanese market.

On the other hand, India heavily relies on Japan for machinery, vehicles, aluminum, and iron and steel—essentials that fuel Indian industries, construction, and technology growth.

A Bond Beyond Economics

The India–Japan relationship goes far beyond business. Rooted in cultural and spiritual links, both nations are also strong democracies committed to stability in Asia. Over the years, the partnership has been elevated step by step—from being declared a Global Partnership in 2000, to a Strategic and Global Partnership in 2006, and finally a Special Strategic and Global Partnership in 2014.

Since 2006, annual summits between the two countries have helped leaders assess challenges and opportunities. Modi’s latest visit is expected to build upon this tradition and possibly unlock new collaborations in manufacturing, technology, and security.

Why This Visit Matters

For ordinary Indians, these high-level visits may seem distant, but their outcomes shape everyday life—from the cars we drive to the metro trains we ride and even the jobs being created in industries linked with Japanese investment. As global trade becomes unpredictable, Modi’s engagement with Japan is not just about balance sheets; it is about creating resilience. At a time when tariffs threaten to shrink India’s exports, Japan’s role as a reliable partner may prove crucial in keeping the country’s economic growth engine running.