The number of Japanese-owned companies operating in India has surged to a record 1,463 in 2026, up from 1,374 in 2025, as India-Japan economic ties continue to deepen through higher trade and investment, according to Grant Thornton Bharat’s latest report titled “Indo he Yokoso: Shaping the Future of Japanese Investments in India.”
India-Japan bilateral merchandise trade has doubled over the past decade, rising from $13.60 billion in FY2016-17 to $27.48 billion in FY2025-26, the report said.
Japanese cumulative foreign direct investment (FDI) in India stood at $48.14 billion between April 2000 and March 2026. FDI equity inflows from Japan amounted to $3.75 billion in FY2025-26, accounting for 6.36 per cent of India’s total FDI equity inflows.
Japanese-owned companies in India employ about 459,333 individuals, up from 365,252 in 2025. The companies operate across sectors such as technology, automobiles, business services, industrial products, consumer, retail and e-commerce, financial services and others.
The largest concentration of these companies is in the National Capital Region (NCR), followed by Maharashtra, Karnataka and Tamil Nadu, according to the report.
Japan’s exports to India are concentrated in high-value capital goods, machinery, industrial inputs and technology-intensive intermediates. India’s exports to Japan, meanwhile, are more diversified, including vehicles and auto components, organic chemicals, machinery and mechanical appliances, marine products and others.
While the Comprehensive Economic Partnership Agreement (CEPA) provides the institutional foundation for economic engagement between the two countries, recent political engagement, including the visit of Japanese Prime Minister Sanae Takaichi, has strengthened bilateral ties, with the summit resulting in cooperation across areas including semiconductors, critical minerals, artificial intelligence, energy and digital technologies.
The two countries have also committed to mobilising 10 trillion yen, or approximately $67 billion, in Japanese private investment into India over the next decade.
The report noted that while recent reforms have strengthened the investment environment, consistent implementation and continued improvements in physical and regulatory infrastructure will be important in converting investor interest into sustained investment.
As Japanese companies look to build new engines of growth, resilience and innovation, India is emerging as a strategic destination for investment, technology and capability building. Cooperation expanding across sectors such as AI, semiconductors, clean energy and advanced manufacturing, digital infrastructure and critical minerals is expected to drive the next phase of the India-Japan economic partnership.
Cumulative Japanese FDI in India (USD bn)
| FY17 |
25.7 |
| FY18 |
27.2 |
| FY19 |
30.2 |
| FY20 |
33.4 |
| FY21 |
35.4 |
| FY22 |
36.9 |
| FY23 |
38.7 |
| FY24 |
41.9 |
| FY25 |
44.4 |
| FY26 |
48.1 |
Source: DPIIT Locations of Japanese companies
| NCR |
|
40% |
| Maharashtra |
|
20% |
| Karnataka |
|
17% |
| Tamil Nadu |
|
11% |
| Others |
|
12% |
Source- Grant Thornton Bharat analysis Sectoral distribution of Japanese companies
| Industrial products |
|
32% |
|
| Consumer, retail and |
|
16% |
|
| e-commerce |
|
|
|
| Technology |
|
13% |
|
| Auto & auto components |
|
12% |
|
| Business services |
|
9% |
|
| Financial services |
|
5% |
|
| Others |
|
13% |
|
Source- Grant Thornton Bharat analysis 
