Japanese Cos. already invested 3.8 Trillion Yen in India against target of 5 trillion yen by 2027

New Delhi, India – Gaku Yoda, Deputy Director General, METI (Japan) has emphasized the importance of collaboration with India to establish the necessary frameworks for Japanese companies to expand into African region which has a high growth potential. He said this while addressing the ‘48^th Joint Meeting of India-Japan and Japan-India Business Co-operation Committee’, organized by FICCI, jointly with the Japan Chamber of Commerce and Industry (JCCI) in New Delhi recently.

“Under this Japan aims to promote investment by its companies in India and establishing business bases that will accelerate bilateral business with various African countries.”

He also added that the target of 5 trillion yen of investments in public and private investment in India from Japan set in 2022, is closed to be achieved, with 3.8 trillion yen already achieved in just first two years. He also mentioned that METI has allocated approximately 1.5 billion yen (USD 10 million) for a budget programme dedicated to industrial Human Resource exchange with India from the budget for the Global South.

During the Prime Minister Kishida’s visit to India in March 2022, he leaders of India and Japan had confirmed that they will promote active investment by Japanese companies in India in light of the 5-trillion-yen target of public and private investment and financing from Japan to India over the next 5 years. Both leaders had however, concurred on the importance of the Indian side further improving the business environment for smooth operations of Japanese companies in India, including cooperation for the diversification and enhancement of supply chains through the “India-Japan Industrial Competitiveness Partnership”.

While addressing the ‘48^th Joint Meeting of India-Japan and Japan-India Business Co-operation Committee’, Keiichi Ono, Ambassador of Japan to India said that to further India-Japan Economic Partnership, we need to have more deeper cooperation in people-to-people exchange. This deeper exchange of people is required from both sides. Japanese population is fast ageing, and Japan needs skillful people for its industry from India, he added.

He further added that many Japanese companies would also like to have greater involvement of their Japanese manpower here in India for certain operations. India is now the centre of economic growth in the world. He added that we need to have more ambitious targets for engagements between the public and private sectors and further foster people-to-people relationships for strengthening economic engagement between India and Japan. With around 1500 Japanese companies currently present in India, both sides felt the need for increasing this number manifold especially with Japanese MSMEs in coming years, noted Mr. Ono.

Sibi George, Indian Ambassador to Japan while addressing virtually said highlighted that there are 1500 success stories of Japanese companies in India, which should be elevated to 15,000 in the forthcoming times through collaboration in significant areas such as Semiconductors, Artificial Intelligence, Critical technologies and SME cooperation.

Dr Bhuvnesh Pratap Singh, Deputy Secretary, DPIIT highlighted that JIBCC and IJBCC have ensured that businesses from both sides continue to explore new business opportunities. MSME cooperation can be the cornerstone of the future of India-Japan partnership as Indian MSMEs have a lot to learn from MSMEs of Japan, he added.

Onkar S. Kanwar, Chairman, IJBCC, Past President, FICCI and Chairman, Apollo Tyres Limited said that Japan is an important partner for India and there are significant opportunities for collaboration across sectors such as Electronics, Chemicals, Automobiles, Semiconductors, EVs and Green Mobility among others.

Tatsuo Yasunaga, Chairman, JIBCC and Representative Director and Chair of the Board of Directors, Mitsui & Co. Ltd elucidated there are ample examples of Japanese companies collaborating with Indian companies contributing to the vision of Make in India and Make for the world. Japanese companies are exploring new areas for expansion in India, like the supply chain for semiconductors, etc.

Rohit Relan, Co-Chairman, IJBCC and Chairman &Managing Director, Bharat Seats Limited said that FICCI is actively working towards promoting economic partnership between India and Japan. We are looking forward to the 50th IJBCC meeting in 2027, which coincides with 75 years of India-Japan relationship and 100-year celebration of FICCI, he added.

Ambassador Deepa Gopalan Wadhwa, Chairperson Indian-Japan Friendship Forum also emphasized on partnership between the two sides by engaging more MSMEs and people-to-people connect.

Ms Jyoti Vij, Director General, FICCI shared that Japan has been an important economic and geopolitical partner for India. She added that FICCI has been at the forefront of promoting India-Japan relations through its holistic agenda and supplementing the efforts of the Governments on both sides.

FICCI-Shardul Amarchand Mangaldas & Co report on ‘India’s Growth Story: Unlocking New Opportunities for Japanese SMEs’, was released during the event. The report extensively discusses how the confluence of the economic priorities of Japan and the economic outlook and policy regime of India present new opportunities for Japanese businesses and especially Japanese SMEs. Driven by mutual interests in economic growth, technological advancement, and sustainable development, the future of the India-Japan relationship and collaboration between businesses of these countries is promising.

The report highlighted that the deep integration of Japanese subsidiaries in Southeast Asia into Japan’s supply chain contrasts with the relatively nascent and diversified export patterns seen in India. As a result, although FDI in India is on an upward trajectory, its contribution to Japan-bound exports from Japanese subsidiaries in India remains smaller. Japanese investments in Thailand, Indonesia, and Vietnam are closely aligned with Japan’s global supply network. Products-ranging from auto components to consumer electronics- are often produced in these hubs and then exported to Japan or other global markets. In sectors like automotive and electronics, Japanese subsidiaries contribute between 25-40% of exports to Japan, reinforcing the region’s role as a critical node in Japan’s production strategy. While production capabilities of Japanese companies in India are expanding, they are currently less focused on the export channel to Japan. The emphasis remains on serving local and regional demand, with export linkages to Japan constituting a smaller portion of overall output.