India seeks more trade deals with Japan push

India aims to expand its network of free trade agreements to cover 75% of global trade, Commerce and Industry Minister Piyush Goyal announced during a visit to Japan. The country is currently negotiating deals with at least eight or nine additional groups of nations, representing another $15 trillion in GDP.

Goyal told business representatives from both countries that India’s existing trade pacts already provide preferential access to economies worth $70 trillion. These agreements include deals with the EU, EFTA bloc, UAE, Australia, and the UK. The minister described the expansion as a strategy to establish India as a reliable partner in global value chains.

Over the past four years, India has signed nine free trade agreements covering 38 developed countries and a combined GDP of $60 trillion. Earlier deals with Japan, South Korea, and the ASEAN region add another $10 trillion. The target is to eventually cover three-quarters of global trade through these arrangements.

Negotiations are underway with Israel, Canada, and the South Africa-led Southern African Customs Union. India has also signed terms of reference to begin trade talks with the six-nation Gulf Cooperation Council.

A delegation of over 200 Indian business representatives accompanied Goyal to Japan to strengthen economic ties. The visit highlighted opportunities in data centers, manufacturing, and artificial intelligence while addressing the need to balance trade flows.

Bilateral trade between India and Japan reached $27.47 billion in the fiscal year ending March 2026, a 9.18% increase from the previous year. India exported $6.03 billion worth of goods to Japan, while imports totaled $21.43 billion, widening the trade deficit to $15.4 billion. The gap has grown steadily over the past four years, rising from $11 billion in 2022-23.

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Goyal noted that opening India’s space sector to private participation could create new collaboration opportunities. He also pointed out that 1,580 Japanese firms already operate in India, including Suzuki, whose Indian subsidiary now has a higher market capitalization than its parent company. The minister expressed hope that more such success stories would emerge.

Innovation costs in India are significantly lower than in developed economies, making it an attractive destination for research and development. Goyal invited Japanese companies to establish operations in India’s 20 planned industrial smart cities and 100 plug-and-play industrial parks.

The minister met with executives from Tokyo Electron and Mitsubishi Corporation to discuss deeper collaboration in semiconductors and other sectors. In a social media post, he said India’s semiconductor ecosystem offers strong opportunities for Japanese firms to expand their presence.

The trade deficit suggests Japan still views India more as a market than a manufacturing hub. However, with ongoing FTA negotiations, the balance could shift—either with Japan or other partners.

Goyal’s visit concluded with bilateral meetings, including one with Mitsubishi Corporation, which has operated in India for over nine decades. Discussions focused on mobility, energy, and infrastructure, as well as ways to increase the company’s long-term investments in India’s growing ties with global partners.