A new division in Japan’s foreign ministry will support small and medium sized Japanese companies and startups to enter the Indian market or expand investment, including through efforts to urge the Indian government to remove regulatory barriers.
The Japan-India Economic Affairs Division, established under the Southwest Asia Division of Japan’s foreign ministry in April, is set to begin full-fledged operations on August 3, when the head of the unit will assume office along with a staff of about 10 members, Jiji Press news agency reported on Sunday.
There were 1,434 Japanese companies operating in India in 2024, and the number has remained “almost flat” since reaching 1,400 in 2018, apparently reflecting factors such as the “opacity of legal systems, varying regulations across states and insufficient infrastructure”, the report said.
The Japan-India Economic Affairs Division plans to take up these issues at summit and ministerial meetings and use inter-governmental dialogue to urge the removal of barriers, the report said. “We want to solve problems facing companies through diplomacy,” a foreign ministry source was quoted as saying by Jiji.
The new division will explore regulations and challenges faced by Japanese companies that don’t have bases or sales channels in India and “seek to improve the business environment through negotiations with the Indian government”, the report said.
{{/usCountry}}The new division will explore regulations and challenges faced by Japanese companies that don’t have bases or sales channels in India and “seek to improve the business environment through negotiations with the Indian government”, the report said.
{{/usCountry}}Last year, the Japanese government set a target of realising 10 trillion yen in private sector investments in India over 10 years, and it has already decided on investment programmes worth about two trillion yen.
When the new division was established in April, Japan’s foreign ministry said the move will take forward “public-private efforts to promote companies’ expansion of business and investment from Japan to India and to deepen cooperation in the area of economic security”. It also said the importance of bilateral economic cooperation is growing because of India’s high rate of economic growth.
At a summit last month, Prime Minister Narendra Modi and his Japanese counterpart Sanae Takaichi signalled their intention to help promote economic growth in both countries. Japanese companies have high expectations for the Indian market, which ranked first for the fourth straight year as the most promising overseas market in a survey released in 2025 by the Japan Bank for International Cooperation.
Japanese foreign direct investment in India has increased in recent years, but remains small compared to Japan’s total outward FDI. Japanese FDI in India rose to $2.48 billion in FY 2024-25 from $1.49 billion in FY 2021-22. Cumulative Japanese investments in India from April 2000 to December 2024 were worth $43.28 billion, making the country fifth among source countries for FDI.
Japan’s bilateral trade with India totalled $27.47 billion in FY 2025-26. Exports from Japan in this period were $21.43 billion and imports were $6.04 billion. India currently ranks 14th in Japan’s total trade, while Japan ranks 10th in India’s total trade.