Clean Energy, EV: Japan Plans To Invest $100 Billion In India Over 10 Years

Japan plans to invest 10 trillion yen (around $100 billion) in India over the next 10 years. The investment is expected to create new opportunities in manufacturing, electric vehicles, clean energy and technology.

Japan has invested around $48 billion in India between 2000 and 2025. There are also around 1,460 Japanese companies operating in India, a record number, according to figures shared during a discussion at the NDTV Indo-Japan Summit.

Japanese companies have invested in India mainly in cars, railways, transport and infrastructure. In the coming years, more money could also go into electric vehicles, batteries, robotics and semiconductors.

A representative from Mitsui said Japanese investment in India has been much lower than in China. Between 2000 and 2025, Japan invested around $98 billion in China, compared with around $47-48 billion in India.

"The India-Japan geopolitical relationship and spiritual relationship is right up there, but the Japanese FDI investment in India is kind of still work in progress," he said, adding that both countries need to work together to bring more Japanese businesses to India.

"If you're looking at really enhancing the flow of Japanese FDI, Japanese businesses in India beyond auto, beyond infrastructure into consumer spaces or MSME-based manufacturing, I think it's very important for both the countries to collaborate," he said.

The panel also discussed how Japanese money and technology could help Indian companies make more products in India. "In the era of AI, that AI is just a brain, but what we need is something, a body. Body is nothing but manufacturing," he said.

An entrepreneur who works in the electric vehicle sector said that new technology alone is not enough. Companies also need factories and machines to turn new ideas into products that people can use.

A representative from Sumitomo Corporation said energy security has become very important for India. "Energy security has become extremely, extremely important," he said.

Sumitomo has invested in renewable energy projects, city gas distribution and compressed biogas in India. Its representative said the company expects energy-related investments to remain important.

The panel said India must make it easier for companies to set up factories and complete projects on time. Land acquisition, infrastructure and delays in putting plans into action can make it difficult for businesses to expand.

A representative from Mitsui said India could learn from the way Japanese companies plan their businesses. "One of the things that we should learn from Japan is the Japanese investing community or strategic community's almost psychotic focus on the invisible backend," he said.

He said India needs to focus on these areas as it prepares to receive more Japanese investment over the next 10 years.

The panel also discussed opportunities for Japanese companies selling food and other everyday products in India. A representative from Kikkoman, a Japanese company known for its soy sauce, said businesses need to understand what Indian consumers want before trying to sell their products in the country.

"Co-creation is very important to understand Indian consumers better," he said, explaining that companies need to work with local businesses and understand Indian tastes and preferences.