A new report reveals automobiles are the biggest driver of India”s export growth to Japan, rising from 1% to 13%. Japanese firms plan expansion, but trade deficit widens.
Exports of engineering and industrial products also gained prominence, with unwrought aluminium, turbo jets and propellers increasing their shares from 3 per cent to 6 per cent and 1 per cent to 6 per cent, respectively, it said. â
India has remained the most promising investment destination for Japanese companies for the fourth consecutive year, with 81.5 per cent of Japanese firms planning to expand operations in India over the next 1-2 years, the ‘IndiaâJapan Business Scenario’ report by Rubix Data Sciences said on Tuesday.
The report was released on the occasion of Japanese Prime Minister Sanae Takaichi’s upcoming three-day visit to India starting July 1, 2026, for the 16th India-Japan Annual Summit.
India’s goods exports to Japan increased from USD 4.4 billion in FY21 to USD 6.2 billion in FY25, the Rubix Data Sciences report said.
“Automobiles emerged as India’s largest export growth driver, with their share in exports to Japan rising sharply from 1 per cent in FY2021 to 13 per cent in FY2026, indicating growing integration into Japan-linked automotive value chains,” it said.
Imports, on the other hand, rose from USD 10.9 billion in FY21 to USD 18.9 billion in FY25. âIndia’s trade deficit with Japan widened from USD 6.5 billion in FY21 to USD 12.7 billion in FY25, growing by more than two times, driven by faster growth in imports than exports.
It added that industrial raw materials and high-value inputs dominate imports, led by refined copper and copper alloys and precious metals in FY2026.
Technology-intensive imports also gained importance, with auto components, flat-rolled alloy steel, and electronic integrated circuits (EICs) increasing their share of imports, it said.