Economic relations between India and Japan have vast potential for growth, given the obvious complementarities that exist between the two Asian economies. Japan's interest in India is increasing due to a variety of reasons including India's big and growing market and its resources, especially human resources. The signing of the historic India-Japan Comprehensive Economic Partnership Agreement (CEPA) and its implementation in August 2011 has accelerated economic and commercial relations between the two countries.
During the visit of the Hon’ble Prime Minister of Japan Mr. Fumio Kishida to India in March 2022, both Prime Ministers expressed the intention to realize US$ 37 billion (JPY 5 trillion) of public and private investment and financing from Japan to India in the next five years, to finance appropriate public and private projects of mutual interest.
In recent years, the economic relationship between the two countries has expanded and deepened steadily. The trade volume has increased with India being Japan’s 18th largest trading partner. Japan was the 12th largest trading partner for India in 2020.
Direct investment from Japan to India has increased, and Japan is currently the 5th largest investor in India. Presently, about 1,455 Japanese companies have branches in India. Besides, the two nations had committed to building a High-Speed Railway in India by introducing Japan’s Shinkansen System, which is the flagship project of Japan-India relations.