India’s growing ambition to establish itself as a global manufacturing hub in electronics, semiconductors, and automobiles is paving the way for expanded Japanese investment, according to a new industry report released on Sunday.
Titled India’s Growth Story: Unlocking New Opportunities for Japanese SMEs, the report—jointly prepared by Shardul Amarchand Mangaldas & Co and the Federation of Indian Chambers of Commerce and Industry (FICCI)—highlights strategic areas where Indian and Japanese businesses can deepen cooperation. These include warehousing, packaging materials, cold chain infrastructure, dairy, defense, and aerospace.
The report emphasizes the potential of technological synergy between Japanese enterprises and India’s expanding information technology sector. With a thriving startup ecosystem and strong research institutions, India offers Japanese small and medium enterprises (SMEs) access to innovation in automation, data analytics, and the Internet of Things (IoT). Through collaborative research and technology transfer, Japanese SMEs can incorporate these advancements to improve operational efficiency and strengthen their global competitiveness.
India’s large domestic market, driven by a young and increasingly affluent middle class, supports strong internal demand in areas such as consumer electronics, automotive components, healthcare, and food processing. This internal resilience, according to the report, acts as a buffer against global market volatility and provides a solid base for sustained business growth.
India’s export-focused policies, combined with its extensive trade agreement network and strategic geopolitical positioning, further enhance its appeal as a production base for Japanese companies targeting markets in Africa and the Middle East. Establishing manufacturing units in India allows Japanese firms to capitalize on these global connections, expanding their international footprint.
Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas, noted that India’s current and upcoming free trade agreements and bilateral partnerships with major global economies open up significant export opportunities for Japanese businesses operating in the country. He added that Japan’s shifting investment focus towards services and high-tech sectors aligns with India’s modernizing digital and financial infrastructure, reinforcing the bilateral potential for long-term trade collaboration.
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