Stories
India Receives Under 1% of Japan Imports Despite Strategic Ties
- •A new study reveals that India accounts for less than 1 percent of Japan's imports, highlighting a gap between diplomatic cooperation and economic engagement.
- •The report titled India–Japan Economic Corridor was launched in Tokyo by Ashoka University and Iron Pillar to explore strengthening business links.
- •Nobel laureate Michael A. Spence noted that less than 1 percent of Japan's foreign portfolio assets are invested in India due to information barriers and risk perception.
- •Opportunities exist to strengthen supply chains in semiconductors and rare earths, given India's large reserves and Japan's refining expertise.
- •Skilled worker mobility remains limited, with only about 27,000 Indians holding employment visas in Japan, which has a median age of 50 compared to India's 29.
Key Questions Answered
During the 16th India-Japan Annual Summit in July 2026, both countries reaffirmed a target to attract ¥10 trillion, approximately $63 billion to $68 billion, in Japanese private-sector investment into India by 2035.
Japanese equipment makers can partner with India's emerging chip industry to diversify supply chains, as India currently sources over 60% of its semiconductor manufacturing equipment from China. Additionally, Japan's expertise in refining and magnet manufacturing can help India expand its rare earth processing capacity and reduce its reliance on Chinese supplies.
The report notes a stark contrast between Japan's median age of 50 and India's median age of 29. However, skilled worker mobility remains limited, with only around 27,000 Indians holding employment visas in Japan, which accounts for less than 2% of its foreign workforce.
