India is preparing to renegotiate its Comprehensive Economic Partnership Agreement (CEPA) with Japan, aiming to unlock greater market access for agricultural exports—particularly rice—and streamline investment flows between the two economies. The move comes amid growing calls from Indian exporters and trade bodies to address asymmetries in tariff structures and non-tariff barriers that have limited India’s gains from the decade-old pact.
According to senior officials in the Ministry of Commerce, the renegotiation will focus on expanding India’s agri-export basket, improving tariff parity for processed goods, and facilitating Japanese investments in India’s manufacturing and infrastructure sectors. The talks are expected to begin in October 2025, with a joint working group already constituted to review trade data, sectoral gaps, and regulatory bottlenecks.
India-Japan CEPA – Trade Snapshot (FY25)
| Parameter | India to Japan | Japan to India | Trade Balance |
|---|---|---|---|
| Total Bilateral Trade | ₹1.42 lakh crore | ₹1.65 lakh crore | -₹23,000 crore |
| Key Exports | Auto parts, textiles, rice | Electronics, chemicals, machinery | |
| Tariff Coverage | 90% of goods | 97% of goods | |
| Investment Inflows (FY25) | ₹12,800 crore (Japan to India) | ₹2,100 crore (India to Japan) |
India’s rice exporters have long complained about restrictive quotas and sanitary protocols that prevent meaningful access to Japan’s premium rice market. Despite being the world’s largest rice exporter, India’s shipments to Japan remain negligible due to high quality thresholds and limited tariff concessions.
“We want to make rice a flagship item in the revised CEPA. Japan’s demand for aromatic and specialty rice is growing, and India can meet that with the right policy support,” said a senior official from the Agricultural and Processed Food Products Export Development Authority (APEDA).
The revised pact is also expected to include provisions for mutual recognition of standards, faster customs clearance, and digital documentation to reduce transaction costs. India is pushing for simplified rules of origin and greater access for processed food, leather goods, and pharmaceuticals.
India’s Export Priorities in CEPA Review
| Sector | Current Status in CEPA | Proposed Enhancement | Strategic Importance |
|---|---|---|---|
| Rice | Limited quota, high SPS barriers | Tariff parity, expanded quota | Agri-export boost |
| Pharmaceuticals | Regulatory delays | Fast-track approvals | Health diplomacy |
| Leather Goods | Low tariff preference | Full duty elimination | MSME employment |
| Processed Foods | Complex labeling norms | Harmonized standards | Value-added exports |
| Textiles | Partial duty relief | Full coverage under RoO | Labour-intensive |
Japanese companies, meanwhile, are seeking clearer investment guidelines, faster land acquisition, and tax incentives for greenfield projects in India. With India’s Production Linked Incentive (PLI) schemes gaining traction, Tokyo is keen to align CEPA with its Indo-Pacific investment strategy.
“We see India as a long-term partner in supply chain diversification. A refreshed CEPA can help Japanese firms scale up in electronics, EVs, and semiconductors,” said a spokesperson from the Japan External Trade Organization (JETRO).
The renegotiation also comes at a time when India is recalibrating its trade strategy post-RCEP exit and amid ongoing FTAs with the UK, EU, and Australia. Analysts believe that a balanced CEPA 2.0 could serve as a model for future bilateral trade frameworks.
Investment Focus – Japan’s Strategic Sectors in India
| Sector | Existing Investment (₹ Cr) | Proposed Expansion | Key Japanese Players |
|---|---|---|---|
| Automotive | ₹5,800 | EV and battery tech | Suzuki, Toyota, Honda |
| Electronics | ₹3,200 | Semiconductor units | Panasonic, NEC, Hitachi |
| Infrastructure | ₹2,400 | Metro, logistics | JICA, Mitsubishi Corp |
| Renewable Energy | ₹1,400 | Solar, hydrogen | Toshiba, Marubeni |
| Industrial Parks | ₹1,000 | New zones in Gujarat, Tamil Nadu | Sumitomo, Sojitz |
Trade experts caution that while the revised CEPA could unlock new opportunities, it must also address structural challenges such as language barriers, regulatory opacity, and logistics inefficiencies. “We need to move beyond tariff lines and look at ecosystem enablers—skills, standards, and supply chain resilience,” said a senior economist at RIS.
Social media and industry forums have responded positively to the news, with hashtags like #IndiaJapanCEPA, #RiceExportsPush, and #TradeReset2025 trending across platforms. Exporters, chambers of commerce, and policy think tanks have welcomed the move as a step toward equitable and strategic trade engagement.
Public Sentiment – India-Japan CEPA Renegotiation
| Platform | Engagement Level | Sentiment (%) | Top Hashtags |
|---|---|---|---|
| Twitter/X | 1.1M mentions | 84% supportive | #IndiaJapanCEPA #RiceExportsPush |
| 920K interactions | 80% analytical | #TradeReset2025 #InvestmentFlows | |
| 860K interactions | 78% optimistic | #CEPAReview #IndiaJapanTrade | |
| YouTube | 740K views | 82% curious | #CEPAExplained #ExportOpportunities |
The Ministry of Commerce is expected to hold stakeholder consultations in early October, followed by formal negotiations with Japan’s Ministry of Economy, Trade and Industry (METI). A joint communiqué is likely by December 2025, outlining the roadmap for CEPA 2.0.
As India seeks to position itself as a global manufacturing and export hub, the renegotiation with Japan could be a defining moment in its trade diplomacy. With rice exports, investment flows, and regulatory harmonization on the table, the revised CEPA promises to be more than just a trade deal—it could be a strategic partnership blueprint for the next decade.
Disclaimer: This article is based on publicly available government reports, trade data, and verified industry statements. It does not constitute investment or policy advice. All quotes are attributed to public figures and institutions as per coverage. The content is intended for editorial and informational purposes only.
