Indian Commerce Minister Piyush Goyal and Japan’s Trade Minister Akazawa Ryosei have initiated a review of the India-Japan CEPA to boost trade and address the $15.4 billion trade deficit. The nations have set a target for 10 trillion yen (approximately $62 billion) in investments over the next decade. Investors should track this for potential growth in semiconductors, AI, and steel.
Indian Commerce Minister Piyush Goyal and Japan’s Minister of Economy, Trade and Industry Akazawa Ryosei met in Tokyo on August 25, 2026, to fast-track the review of the India-Japan Comprehensive Economic Partnership Agreement, known as CEPA. The ministers are aiming to update the trade deal to better fit current global economic needs. This move is significant as India looks to address a widening trade deficit with Japan, which stood at $15.4 billion in the 2025-26 fiscal year.
Beyond trade, the discussion focused on a major financial goal. Both nations are aiming for a total investment of 10 trillion yen, which is roughly $62 billion, over the next decade. This partnership is designed to make India a more attractive destination for Japanese companies, positioning the country as a stable alternative for manufacturing and technology investments, often referred to as the China-plus-one strategy.
The meeting also brought together industry leaders from both nations. Major Japanese companies, including Tokyo Electron, Fujifilm Holdings, and NEC Corporation, participated in roundtables centered on semiconductors and artificial intelligence. Discussions with firms like JFE Steel, Nippon Steel, and IHI Corporation also highlighted a push for collaboration in steel, aerospace, and advanced industrial engineering. The focus is not just on trade volumes but on bringing advanced technology into India’s manufacturing ecosystem.
While the potential for investment is high, investors should be aware of certain challenges. The trade deficit remains a persistent point of pressure, and past efforts to balance trade have faced hurdles. Additionally, Indian exporters, particularly in the pharmaceutical sector, have previously faced complex regulatory and certification barriers in Japan that can limit market access. Success in these high-tech sectors will also depend on India’s ability to improve local infrastructure and reduce project delays, which can impact large-scale industrial execution. Investors may track the specific timeline for the CEPA review and whether these high-level talks translate into firm, committed project announcements, as well as the progress of companies involved in these cross-border collaborations.