India Pushes Major Investment Drive in Japan, but Implementation Challenges Loom Over 10 Trillion Yen Target

Dragon Media News Desk

India’s Commerce and Industry Minister Piyush Goyal has led a nearly 200-member business delegation to Japan, making investment pitches in Tokyo, Nagoya and Osaka. India described it as its largest-ever business delegation, but the visit has so far produced no formal announcement containing explicit new investment commitments from either side.

The delegation included companies from manufacturing, semiconductors, clean energy, steel, automobiles, financial services, healthcare and start-ups. A key objective of the visit was to accelerate efforts toward attracting 10 trillion yen, or roughly $63 billion, in Japanese private investment in India over the next decade, a target agreed during Prime Minister Narendra Modi’s visit to Japan in 2025.

Goyal held discussions with major Japanese financial institutions including MUFG, Mizuho and Nomura. He also highlighted India’s ambition to develop a globally competitive semiconductor ecosystem, with semiconductor demand in the country projected to reach $150 billion by 2032.

Japanese companies continue to show strong interest in India. A 2025 survey by the Japan Bank for International Cooperation ranked India as the most promising medium-term business expansion destination for Japanese manufacturers for the fourth consecutive year. However, a significant gap remains between that optimism and actual large-scale corporate presence.

As of October 2024, 1,434 Japanese companies were operating in India. By comparison, Thailand hosted 6,083 Japanese firms, Vietnam 2,543 and Malaysia 1,643.

Japanese institutions have raised concerns over the ease of repatriating profits, access to Indian capital markets and the predictability of the regulatory environment. Share buybacks, capital reductions and secondary equity sales have also reportedly faced lengthy regulatory procedures.

The Indian government has signaled that it recognizes these concerns. Goyal said a framework would be developed to simplify compliance and regulatory requirements, including Bureau of Indian Standards certification. India has also eased some foreign direct investment regulations and is working toward a more predictable FDI regime and an updated model bilateral investment treaty.

Wan Zhe, a professor at Beijing Normal University, said India has begun simplifying certification and approval procedures for some high-tech companies, which could reduce entry costs. However, she argued that deeper institutional issues such as exchange rate management, capital repatriation and judicial efficiency are unlikely to change substantially in the short term. Her assessment reflects the view of a Chinese expert rather than an official Japanese position.

India’s main challenge is therefore no longer simply convincing Japanese companies that opportunities exist, but demonstrating that those opportunities can generate stable, predictable and long-term returns.

Whether the 10 trillion yen target is ultimately achieved will matter, but an even more important measure of success will be how many Japanese companies actually enter the Indian market, expand their operations and remain there over the long term.