Japan’s Ministry of Foreign Affairs has set up the Japan-India Economic Affairs Division to facilitate Japanese companies’ investments in India. This move aims to enhance economic ties between the two countries. The Ministry stated that this division will work towards promoting business expansion and investment from Japan to India, focusing on economic security cooperation.
The initiative is particularly geared towards fostering collaboration in sectors like artificial intelligence, startups, and critical minerals. It aligns with the broader strategic goals of both Japan and India. Tokyo’s increased attention to India as a significant economic and strategic partner is evident in this development, especially amidst changing global supply chains and geopolitical dynamics.
This step is in line with the shared objective of India and Japan to attract 10 trillion yen (approximately $62.6 billion) in private sector investments in India by 2035, as decided during a bilateral summit in 2025. Japanese foreign direct investment (FDI) in India has amounted to around $43.2 billion since 2000, with notable investments in sectors such as automobiles, electronics, telecommunications, chemicals, and financial services.
Japanese companies see India as a promising market for growth, but concerns persist due to varying regulations across Indian states. The newly established facilitation cell intends to provide support and ease entry barriers for companies seeking to expand their presence in India. In recent years, Japanese FDI inflows into India have been on the rise, reaching $3.1 billion in 2023-24, primarily directed towards sectors like automobiles, electrical equipment, telecommunications, chemicals, financial services, and pharmaceuticals.
Moreover, India hosts Dedicated Japan Industrial Townships (JITs) like those in Neemrana and Sri City, accommodating over 100 Japanese firms. This new division complements existing support structures such as the SME Facilitation Cell initiated by the Indian Embassy in Tokyo and JETRO’s assistance for startups. The initiative forms part of a broader strategic partnership discussed by Prime Minister Narendra Modi and former Japanese Prime Minister Shigeru Ishiba in August 2025, focusing on strengthening security and economic cooperation within the Quad framework.
