According to Grant Thornton Bharat's latest report titled 'Indo he Yokoso: Shaping the Future of Japanese Investments in India', the number of Japanese-owned companies operating in India has surged to a record 1,463 in 2026, up from 1,374 in 2025. These companies now employ about 459,333 individuals, up from 365,252 in 2025. The report reveals that Japanese cumulative foreign direct investment (FDI) in India stood at $48.14 billion between April 2000 and March 2026, with FDI equity inflows from Japan amounting to $3.75 billion in FY2025-26, accounting for 6.36 per cent of India's total FDI equity inflows.
According to reports from The Times of India, Sandeep Sikka, MD & CEO of Nippon Life India Asset Management Company and newly re-elected AMFI president, participated in a 200-member business delegation that accompanied commerce & industry minister Piyush Goyal to Japan last week. Sikka argues that there will be a rush of investments from Japan, with FDI translating into higher portfolio flows as retail investors also join the investment trend.
As reported by The Times of India, Sikka emphasizes that the relationship between India and Japan is only getting better, with both countries having different strengths. India has scale, talent and growth, while Japan has capital and technology. The conversation has shifted from why invest in India to how much more to invest, with internal discussions in Japanese boards moving from assembling in India for local markets to making in India and making for the world.
According to Grant Thornton Bharat's report, 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 notes that Japan's exports to India are concentrated in high-value capital goods, machinery, industrial inputs and technology-intensive intermediates, while India's exports to Japan are more diversified, including vehicles and auto components, organic chemicals, machinery and mechanical appliances, marine products and others. The Comprehensive Economic Partnership Agreement (CEPA) provides the institutional foundation for economic engagement between the two countries.
As reported by The Times of India, India-focused funds in Japan have shown significant growth from $6.7 billion in 2016 to $9.7 billion in 2021 and $19.6 billion in 2026. Sikka highlights that India is world's fastest growing economy and offers tremendous returns, with the investment pattern typically starting with FDI, followed by FPI and then retail participation. The report indicates that the two countries have committed to mobilising 10 trillion yen, or approximately $67 billion, in Japanese private investment into India over the next decade.
According to the report, Sikka addresses concerns about predictable policies and repatriation of profits, noting that there is a lot of political and policy certainty in India now since Mr Modi became PM. He emphasizes that Japan has seen five or six PMs in the same period, highlighting India's political stability. The sentiment among foreign portfolio investors was described as very strong during recent roundtables. The report notes 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.
