India-Japan Trade Relations – UPSC GS2

 India and Japan Trade Relations:
  • 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.
Challenges to India and Japan Trade Relations
  • 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).
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