Japanese firms accelerate investment in India as China ties weaken
Japan's leading companies are expanding rapidly in India, spurred by a record delegation led by Commerce Minister Piyush Goyal and a shift away from China.
India's commerce minister Piyush Goyal headed the largest Japanese business delegation to the subcontinent, underscoring a deepening economic partnership. Japanese consumer names—including Uniqlo, Muji, Onitsuka Tiger and newcomer Nitori—are rapidly opening stores in major Indian cities, while Lawson plans a massive network of outlets. In finance, MUFG Bank acquired a $4.4 bn stake in Shriram Finance and SMBC took a 24.22% share of Yes Bank, marking the biggest foreign inflows into India's banking sector.
More than a hundred Japanese firms operate global capability centres in India, and a July summit during Prime Minister Sanae Takaichi's visit resulted in $12.5 bn of commitments across 120 projects. Analysts attribute the shift to Japan's declining domestic demand and reduced attractiveness of China, the United States and smaller Southeast Asian markets. Nonetheless, challenges such as regulatory uncertainty and infrastructure delays persist, threatening the momentum of Japanese investment.
Why it matters
Japanese capital is fueling India's growth while reducing Japan's reliance on a volatile China market.
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