India-Japan Trade Dynamics Shift As Automobile Exports Capture 13% Share Ahead of 2026 Summit

New Delhi, Jul 1 (KNN) Automobiles have emerged as the single largest driver of India's export growth to Japan, with their share in outbound shipments rising sharply from 1 per cent in FY21 to 13 per cent in FY26, reflecting deepening integration into Japan-linked automotive value chains, according to the India-Japan Business Scenario report released by Rubix Data Sciences on Tuesday.

The report was released ahead of Japanese Prime Minister Sanae Takaichi's three-day visit to India beginning 1 July 2026 for the 16th India-Japan Annual Summit, PTI reported.

Engineering and industrial products also gained ground, with unwrought aluminium's share rising from 3 per cent to 6 per cent and turbo jets and propellers climbing from 1 per cent to 6 per cent over the same period.

India's goods exports to Japan grew from USD 4.4 billion in FY21 to USD 6.2 billion in FY25. However, imports rose at a faster pace — from USD 10.9 billion to USD 18.9 billion over the same period — causing India's trade deficit with Japan to more than double, widening from USD 6.5 billion in FY21 to USD 12.7 billion in FY25.

On the investment front, India retained its position as the most promising destination for Japanese companies for the fourth consecutive year, with 81.5 per cent of Japanese firms surveyed planning to expand operations in India over the next one to two years.

(KNN Bureau)