India’s merchandise trade deficit with Japan has nearly tripled over the past decade, ballooning from $5.18 billion in 2015-16 to $15.4 billion in 2025-26, prompting a comprehensive government review of the existing Free Trade Agreement (FTA). While India’s imports from Japan more than doubled to $21.43 billion, its exports remained severely subdued, expanding modestly to just $6 billion during the same ten-year period. This massive export stagnation is primarily driven by Japan’s highly stringent non-tariff barriers, particularly its rigorous sanitary and phytosanitary (SPS) standards, vividly highlighted by the recent suspension of fresh mango imports from India due to quarantine lapses. Recognizing that breaking into the restrictive Japanese consumer market is an uphill battle, New Delhi is strategically shifting the objective of the FTA review; the government aims to restructure the pact as a powerful tool to attract massive Japanese corporate capital into India. Backed by Japan’s massive pledge to inject ¥10 trillion (approximately ₹5.5 lakh crore) into India over the next decade across critical sectors like semiconductors, clean energy, and next-generation mobility, India plans to utilize this influx of Foreign Direct Investment (FDI) to stimulate long-term economic growth, improve logistical infrastructure, and generate large-scale domestic employment.