Beyond metros and blue chips: How India’s reforms are spreading investment across the country

This article is authored by Dr Rohit Bakshi, founder, RBL3x3 and executive advisor for Japan, NSDC International.

India and Japan need to move past traditional trade and start putting serious money into high-tech corridors. That’s easy to say at a conference. Turning a polite meeting into a partnership that lasts twenty years is harder, and it needs a proper process behind it. What’s encouraging is that this process is now taking shape, and it’s no longer confined to the big metros. It’s reaching Tier-2 and Tier-3 cities too.

Semiconductor

I’ve spent years working between Indian and Japanese companies on skilling and corporate partnerships, and I’ve watched the mood among Japanese investors change. “Red Tape to Red Carpet” sounded like a slogan when it was first used. For many of the people I work with, it now describes what they actually experience. Approvals move faster, infrastructure is visibly better, and the workforce is being trained at a scale that didn’t exist a decade ago. A lot of the friction that used to slow down Japanese capital, including plain miscommunication, has eased.

Why Japanese capital is choosing India? The Japan Bank for International Cooperation (JBIC) has ranked India as the most promising long-term destination for Japanese manufacturers several times now. That doesn’t happen by accident. Japanese firms want an alternative in their supply chains that’s stable and transparent, and India has made a strong case for itself.

Single-window clearances, better logistics and the Production Linked Incentive (PLI) schemes have all helped. So has the PMO’s involvement through dedicated investor cells, which means a Japanese Micro, Small and Medium Enterprises (MSME) with a problem can get it heard quickly. Japanese investors are famously patient, but they want predictability in return. They’re getting more of it.

For a long time India was seen in Tokyo mainly as a place to assemble and sell cars. That view is outdated. Recent summits have pushed the partnership into new territory.

Semiconductors and Artificial Intelligence (AI) are now firmly on the agenda. Joint declarations cover supply chain security, advanced pharmaceuticals and shared research in artificial intelligence, quantum computing and next-generation electronics. Clean energy is the other big shift. Agreements to set up around 1,000 biogas and green ammonia plants across semi-urban India matter because the investment lands outside the cities, where it can lift rural incomes directly.

Then there’s aerospace and defence. The UNICORN defence technology cooperation and the ISRO-JAXA LUPEX lunar mission show investors that India is working at the frontier, not just on the factory floor. As I have mentioned before, once you get past the language barrier, it turns into an investment channel. I still believe that. Japan’s population is ageing fast. India has one of the youngest STEM workforces in the world. The fit is obvious, and the Ministry of Skill Development and Entrepreneurship and NSDC International have built real systems around it. Programmes like the Technical Intern Training Program (TITP) and the Specified Skilled Worker (SSW) route are sending thousands of Indians to Japan for industrial training. Many come back with a feel for Kaizen-style discipline that’s hard to teach in a classroom, and they bring it into Indian operations that run at a much larger scale.

Just as important, this pipeline isn’t only drawing from Delhi, Mumbai and Bengaluru anymore. The Pravasi Kaushal Vikas Yojana and Japanese language test centres in smaller cities mean a young person in a Tier-2 town can now train to work for a Japanese company without leaving home first. Japanese firms have noticed, and some are setting up plants and technical centres closer to where the talent is.

Global Capability Centres (GCC) are following the same path. With Digital India infrastructure now reaching smaller cities, Japanese conglomerates are opening GCCs there. More than 30,000 trained professionals in India already handle engineering, robotics and back-office work for head offices in Tokyo.

India today comes to the table with confidence, and with the infrastructure to back it up. Policy, intent and execution are finally pointing the same way. If we keep spreading industrial opportunity beyond the metros and keep investing in our young people, Japanese investment won’t just build factories. It can drive growth across the whole country.

(The views expressed are personal)

This article is authored by Dr Rohit Bakshi, founder, RBL3x3 and executive advisor for Japan, NSDC International.