Japanese Presence in India Reaches Record Levels
Japanese companies are expanding their presence in India at a rapid pace, increasingly moving beyond traditional manufacturing into technology, engineering, research and development, digital operations and global business services.
According to a new Grant Thornton Bharat report, the number of Japanese-owned businesses operating in India has reached a record 1,463 in 2026, employing more than 459,000 people. Japanese Global Capability Centres (GCCs) have also increased to 75, highlighting the country’s growing importance as a technology and services hub.
Japanese Investment Crosses $48 Billion
Japanese cumulative foreign direct investment in India has reached $48.14 billion, with $3.75 billion flowing into the country during FY2025-26.
The investment relationship has also accelerated sharply in recent years. Between 2021 and 2025, India and Japan recorded 51 investment deals worth $12.17 billion, with 2025 alone accounting for nearly two-thirds of the total deal value.
Bilateral merchandise trade has nearly doubled over the past decade, reaching $27.48 billion in FY2025-26.
Technology Becomes a Bigger Focus
While manufacturing remains an important part of Japanese corporate activity in India, technology is gaining ground. The report said technology now accounts for 13% of Japanese companies operating in India.
Japanese GCCs are increasingly being used to build capabilities in software, engineering, R&D, digital operations and business services. These centres are supporting not only Indian operations but also the global businesses of their parent companies.
This represents a significant shift from the traditional model of Japanese companies primarily using India as a manufacturing base.
India-Japan Partnership Moves Into Strategic Sectors
The expanding relationship is also reaching emerging industries such as semiconductors, artificial intelligence, digital infrastructure, critical minerals, clean energy and advanced manufacturing.
Japan brings strengths in advanced manufacturing, technology, quality systems and long-term capital, while India offers a large domestic market, a growing talent pool and strong digital capabilities.
The combination is increasingly positioning India as a strategic destination for Japanese companies looking for growth, supply-chain resilience and innovation.
A Broader Business Relationship
The latest numbers suggest that the India-Japan economic relationship is becoming broader and more deeply integrated. Instead of focusing only on factories and production facilities, Japanese companies are increasingly building technology capabilities, research teams and global delivery operations in India.
For India, this could mean more high-value employment, technology transfer and integration into global corporate operations. For Japanese companies, India offers both a large market and a growing base for developing capabilities that can serve customers worldwide.
Summary: Japanese companies are significantly expanding their India footprint, with 1,463 Japanese-owned businesses and 75 GCCs now operating in the country. With cumulative Japanese FDI at $48.14 billion and growing activity in technology, AI, semiconductors, digital infrastructure and clean energy, the India-Japan business relationship is increasingly moving beyond manufacturing toward technology and innovation.
