“I believe that India-Japan relations have now entered a new era”, says Mr. Daisaku Yukita, Chief Director General of JETRO (Japan External Trade Organization) in India.
Yukita spoke with Bridges on the recent India-Japan Joint Economic Forum, Japanese business in India and JETRO’s role in strengthening India – Japan ties.
Bridges: What was the outcome of the recent India-Japan Joint Economic Forum?
Yukita: On July 2, 2026, the India-Japan Joint Economic Forum was held in New Delhi, attended by Ms. TAKAICHI Sanae, Prime Minister of Japan and H.E. Mr. Narendra Modi, Prime Minister of India. In addition to government officials from both countries, the forum brought together more than 150 Japanese companies and over 100 Indian companies to discuss the future of India-Japan economic relations.
The forum can be seen as a symbolic event reflecting the current state of India-Japan relations. Under the circumstances where growing uncertainty in the global business environment, India and Japan are evolving beyond merely friendly nations into strategic partners that support each other’s growth and stability.
During the forum, Prime Minister TAKAICHI highlighted three key areas: strengthening cooperation in energy security, enhancing collaboration in decarbonization and clean energy, and promoting sustainable growth models utilizing underutilized resources in rural areas. She also expressed her vision of developing India-Japan cooperation into a new growth model that can be expanded across Asia, Africa, and South America. These initiatives have further strengthened the momentum toward deeper bilateral relations.
How would you describe the current state of Japanese business in India?
With 1,434 Japanese-affiliated companies operating in India as of 2024, India has become one of Japan’s most promising investment destinations and further expansion is expected in the future. Interest in India as a massive market has never been higher, particularly since it surpassed China to become the world’s most populous country. In recent years, there has been a significant increase in business and local government delegations from Japan visiting India, reflecting the growing enthusiasm surrounding the market.
According to JETRO’s 2025 Survey on Japanese-Affiliated Companies Overseas, more than 70% of Japanese companies in India have remained profitable for four consecutive years. Furthermore, over 80% of these companies indicated plans to expand their operations, the highest proportion among major countries worldwide. India has thus emerged as one of the most dynamic and promising regions for Japanese business.
“I believe that India-Japan relations have now entered a new era.”
Daisaku Yukita, Chief Director General of Japan External Trade Organization in India
How important is the India-Japan relationship today?
The significance of India-Japan relations extends well beyond markets and investment. The two countries are becoming increasingly complementary in new areas such as economic security related to energy and critical minerals, human resource exchange, and innovation.
In August 2025, JETRO published the Joint Action Plan for Japan-India Economic Security Cooperation. The report presented a new narrative for bilateral economic security cooperation based on the comparative strengths of both countries and proposed concrete public-private initiatives, including the identification of priority materials and technologies for cooperation.
India, widely recognized as an IT powerhouse, places strong emphasis on science and engineering education and produces a vast pool of highly skilled talent. There is considerable interest in leveraging this talent to drive innovation through the establishment of research and development centres, IT hubs, and collaborations with Indian startups.
In addition, an increasing number of Japanese companies are considering India as a platform for strengthening engagement with Africa. By combining Japan’s technological expertise with India’s implementation capabilities and extensive networks, new economic opportunities can be created. Such cooperation is important for translating the vision of a Free and Open Indo-Pacific (FOIP) into concrete action and contributing to the sustainable prosperity of the Global South. In conjunction with the India-Japan summit meeting, JETRO recently published a research report entitled Strategic Perspectives for Expanding Japan-India Cooperation in Africa.
How do you see Japan-India relations evolving?
Looking back at India-Japan economic relations, their nature has changed significantly over time. In the past, cooperation between India and Japan was largely centred on sectors such as power generation, water supply and sewage systems, railways, and logistics infrastructure, with Japan playing a prominent role in supporting India’s economic growth through infrastructure development.
However, following India’s economic liberalization in 1991, the Indian economy underwent dramatic transformation. Particularly from the 2000s onward, the rapid growth of the IT industry attracted global attention and shifted India-Japan relations toward a more business-driven model. The number of Japanese companies operating in India expanded from 267 in 2006 to 1,305 by 2016, representing remarkable growth over a decade. Japanese businesses entered a wide range of sectors, significantly expanding their presence in India.
In September 2014, Prime Minister Modi visited Japan, and bilateral ties were elevated to a “Special Strategic and Global Partnership,” leading to broad-based cooperation across multiple fields. Today, the defining feature of India-Japan relations is that they are no longer based on a one-sided partnership. Rather, they have evolved into a “co-creation partnership” in which both countries bring their respective strengths together to generate new value.
“Sharing common values such as democracy and a market-based economy, India and Japan are well positioned to evolve into a truly two-way partnership that creates new value together.”
What does the future hold for India as a “Global Production Hub”?
Many Japanese companies have traditionally viewed India primarily as a large domestic consumer market. Consequently, unlike business in China and Southeast Asia, which have often been regarded as global manufacturing hubs, India has only been used to a limited extent as an export platform.
In recent years, however, signs of change have emerged. The Indian government has promoted the “Make in India, Make for the World” policy and has positioned export competitiveness as a high priority. In response, a growing number of Japanese firms are beginning to consider India as a global manufacturing base.
Nevertheless, several challenges remain before India can fully establish itself as a global production hub. Industrial clusters and supply chains are still developing, and many components continue to be imported. In addition, there is a shortage of industrial parks, particularly in areas offering the residential and living standards sought by Japanese companies. The extent to which the investment environment continues to improve will be one of the keys in determining India’s future competitiveness
What role will JETRO play in strengthening India – Japan relations?
I believe that India-Japan relations have now entered a new era. In a time of increasing global uncertainty, the decision by the leaders of India and Japan to hold a bilateral summit meeting on their own initiative may be viewed as a symbolic indication that both countries recognize the importance of one another.
Beyond economic security, there is strong potential for building a sustained and mutually beneficial relationship through active human resource exchanges, investment, innovation, and other complementary forms of cooperation that support economic growth.
While Japanese interest in India remains exceptionally high, Indian companies are also increasingly interested in entering the Japanese market and expanding into third-country markets. Sharing common values such as democracy and a market-based economy, India and Japan are well positioned to evolve into a truly two-way partnership that creates new value together.
As a bridge between the two countries, JETRO aims to contribute to regional and global prosperity by promoting deeper collaboration across a wide range of fields, including manufacturing, startups, digital technologies, human resources, and content industries.
