Profitability remains strong
75.5% of Japanese-affiliated companies in India expect to be profitable in 2025, one of the highest rates among major countries surveyed.
Only 10.8% expect to break even and 13.7% expect losses. India ranks behind only a handful of markets such as the UAE, Australia, South Korea, Brazil, and South Africa in profitability.
Operating profit outlook is positive
For 2025 compared with the previous year:
48.2% expect profits to increase
35.3% expect profits to remain unchanged
16.4% expect profits to decrease
Among Indian companies expecting higher profits in 2025, the top reasons were:
Increasing demand in the local market 78.7%
Stronger local sales organization 37.1%
Improved production/sales efficiency 30.3%
Growing export demand 21.3%
Lower raw material/parts procurement costs 15.2%
India – A market benefiting from robust domestic demand
Expansion plans are increasing
India’s business expansion intentions increased by 1.2 percentage points year-on-year.
Southwest Asia (where India is the dominant market) showed one of the strongest expansion trends globally.
In manufacturing, 78.0% of firms in Southwest Asia plan expansion over the next 1–2 years.
In non-manufacturing sectors, 73.1% plan expansion—the highest regional figure reported.
Automotive sector: India in the Driving Seat
India as one of the world’s strongest automotive markets:
More than 70% of automotive-related Japanese firms in India expect to be profitable in 2025.
For 2026, 62.5% of automotive companies in India expect operating profits to increase, the highest percentage among all major countries/regions surveyed.
This represented a 19.2-point improvement from the prior year’s forecast.
India was one of the most attractive overseas markets for Japanese companies in 2025:
High profitability (75.5% in the black)
Strong domestic-demand-driven growth
Positive profit expectations (48.2% expect increases)
Rising expansion plans
Particularly strong prospects in the automotive sector, where India leads major markets in expected profit growth for 2026.
Source: JETRO FY2025 Survey on Business Conditions of Japanese-Affiliated Companies Overseas (Global Edition)
