India-Japan Trade Relations – UPSC GS2

In recent years, the economic relationship between Japan and India has steadily expanded and deepened.

The volume of trade between the two countries has increased.

India was the 18th largest trading partner for Japan, and Japan was the 12th largest trading partner for India in 2020.

Also, direct investment from Japan to India has been increased, and Japan was the 4th largest investor for India in FY2020.

India and Japan have set an investment target of “five trillion yen” ($42 billion) in the next five years.

The global post-COVID recovery process falters and “geopolitical developments” present new challenges.

Russia’s invasion of Ukraine is a grave development and there is a clear sign of differences over India-Japan stands on the Russia-Ukraine conflict.

Conflict in the India-China relationship is another matter of concern as Japan observed that normalcy would depend on the progress of the situation at the Line of Actual Control (LAC) with China.

Indian exports to Japan are presently affected by a number of issues, which include both tariff, and non-tariff barriers like Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS).