Expanding into the Japanese Market: Opportunities for Indian Businesses

US$68 Bn Investment Commitment – A Game Changer

Recently, at the 15th India–Japan Annual Summit, Prime Ministers of both countries announced a ground-breaking 10-trillion-yen (US$ 68 billion) private sector investment commitment from Japan into India in the next ten years.

This pledge is beyond numbers – it signals Japan’s confidence in India’s growth story. The proposed investment will be channelled in future-focused industries such as:

• Semiconductors and Artificial Intelligence
• Clean Energy & Mobility
• Critical Minerals and High-tech manufacturing

This financial commitment is expected to restructure the bilateral trade, strengthening tech collaborations, and lead the cross-border industrial growth in coming years.

Key to Success - Joint Ventures & Partnerships

While Japan has traditionally been viewed as a challenging market for foreign businesses, the best channel for Indian companies to succeed is through strategic partnerships. This was reaffirmed by the Chief Director of JETRO India during his conversation with our Managing Partner at the recent CII MSME Summit, wherein he emphasized that joint ventures, tech collaborations and partnerships are not only the preferred route for Indian businesses looking to enter Japan but also for Japanese companies planning to venture into India.

Such collaborations help companies overcome regulatory and cultural barriers while giving access to advanced technology, precision manufacturing and R&D of Japan alongside India’s strength in scale, cost-efficiency, and market adaptation.

Institutions Catalyst to Bilateral Engagement

There are various government supported as well as private institutions in both countries that have a played a pivotal role in strengthening the business relationships between the two nations.

From Japan to India:

• JETRO (Japan External Trade Organization)
• JCCII (Japan Chamber of Commerce and Industry in India)
• JICA (Japan International Cooperation Agency)

From India to Japan:

• Invest India & DPIIT (Department for Promotion of Industry and Internal Trade):
• CII, FICCI, and ASSOCHAM
• Embassies & Trade Commissions

 

Sectors in Spotlight for India – Japan Collaboration

India–Japan economic engagement has been concentrated in sectors where the two countries’ strengths naturally complement each other with following sectors accounting for bulk bilateral trade and investments:

• Automotive & Mobility: Japan is long-standing largest partner of India in the automotive sector with companies like Suzuki, Toyota, Honda, and Nissan running extensive manufacturing units in India. Nearly 40% of Japanese FDI in India is in automobiles and auto components with EV, hybrid vehicles, and clean mobility solutions being considered as the next growth phase.
• Infrastructure & Smart Cities: Japan has made significant investments in India’s flagship infrastructure projects like Delhi–Mumbai Industrial Corridor (DMIC) and the Mumbai–Ahmedabad High-Speed Rail (“bullet train”).
• Electronics, Machinery & Technology: Machinery, electrical equipment, and electronic goods form substantial share of India’s imports from Japan with Japanese companies emerging as key partners for high-tech and advanced manufacturing solutions.
• Chemicals & Specialty Materials: Another significant imports from Japan to India is of Chemicals, plastics, and speciality materials whereas India exports organic chemical products in return – showcasing the interlinking between both countries in chemical supply chain.
• Pharmaceuticals & Healthcare: India is exporting generic medicines, vaccines, and API to Japan, while Japan provides cutting-edge biotech and life sciences R&D.

How can ILO support you with Expansion?

We leverage our strong network and relationships in Japan to provide end-to-end support especially designed for helping Indian companies successfully establish and grow their presence in Japan. Our support includes:

• Market Entry Strategy – Evaluate your business model and develop a tailored market entry roadmap in alignment with Japan’s industry practices and consumer preferences. 
• Partner Search – Identifying and connecting with distributors, corporates, technology holders, and investors that match your business needs.
• Incorporation & Compliance – Setting up an entity, tax and statutory compliances, contracts, and workforce management.  
• Cross-Border Transactions – Structuring & negotiating joint ventures, M&A, technology licensing and strategic investments between entities from both countries.
• Trade & Customs Facilitation – Guidance on the rules of origin, securing necessary certification and approvals and custom procedure.

With Japan becoming as an important strategic partner for India and rising demand for technology-driven solutions, clean energy, advanced manufacturing, and mobility innovations, now is the time for Indian businesses to explore collaborations.

Let’s connect to discuss your market entry to Japan!