Japan to Establish Dedicated Cell to Boost FDI in India

Japanese Investment into India has reportely risen in recent years, though it remains limited relative to Japan’s global outflows.  

Inflows stood at $1.79 billion in 2022-23 and increased to $3.1 billion in 2023-24. For 2024-25, inflows reached $1.36 billion up to December, as per The Economic Times report. 

Cumulative investment between 2000 and December 2024 is estimated at $43.2 billion, placing Japan fifth among India’s foreign investors. Capital has largely flowed into automobiles, electrical equipment, telecommunications, chemicals, financial services and pharmaceuticals. 

New Facilitation Centre 

Japan’s Foreign Ministry will set up a dedicated centre to support companies entering the Indian market. The unit is scheduled to begin operations on Wednesday.  

It will function as a coordination point for firms dealing with administrative and regulatory requirements. 

The centre is expected to assist with state-level compliance, legal processes, and tax-related issues. It will also support cooperation in areas such as artificial intelligence, startups and critical minerals. 

Corporate Presence Remains Limited 

The number of Japanese companies operating in India has not kept pace with interest levels. As of 2024, there were 1,434 firms present in India. This compares with around 6,000 in Thailand and close to 4,500 in Singapore. 

Surveys by the Japan Bank for International Cooperation have identified India as the most preferred overseas destination for Japanese manufacturers for 4 consecutive years. However, companies have cited operating conditions as a constraint on expansion. 

Policy Alignment and Investment Target 

At the India-Japan annual summit in August 2025, both countries set a target of ¥10 trillion (approximately $62.6 billion) in private-sector investment into India over the next decade. The new centre forms part of efforts to support this objective. 

India’s economic size and growth rate have been key considerations. Projections indicate that India’s nominal GDP could exceed Japan’s by 2026. 

Read More: India Increases ATF Prices by 115% for Charters amid West Asia Conflict! 

Conclusion 

The centre will support Japanese companies with processes in India. It comes as investment activity between the 2 countries continues. 

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