Home ／ Insights on entering the Indian market
2026.03.24
India is a market unlike any other in the world, where efforts toward the Sustainable Development Goals (SDGs) and economic growth are advancing at the same time. With a population of more than 1.4 billion, rapid urbanization, and serious poverty, educational inequality, and environmental problems all coexisting, solving social challenges in India has itself become a source of huge business opportunity.
India's impact investing market grew from around 320 million dollars in 2010 to around 2.7 billion dollars in 2019, recording a compound annual growth rate (CAGR) of 26% (source: JETRO). This figure is limited to investment with a social purpose rather than representing the full picture of SDG-related investment, but it shows that capital is flowing into problem-solving businesses at an accelerating pace.
This article explains, with the latest data, concrete success stories of SDG business in India and the strategies Japanese companies need to succeed in this market.
In the SDG Index (Sustainable Development Report), India ranks around 100th out of roughly 167 countries covered, facing many more challenges than developed countries. However, this abundance of challenges is itself an abundance of business opportunity.
SDG 2 (Zero Hunger): About 190 million people in India are said to be undernourished, and food loss is also a serious problem. There is a large market in agricultural technology, cold chain, and food processing.
SDG 6 (Clean Water and Sanitation): Access to safe drinking water remains limited, particularly in rural areas, and demand for water treatment and purification technology is growing.
SDG 7 (Affordable and Clean Energy): Renewable energy, especially solar power, is being rolled out rapidly, with a target of 500 GW of renewable capacity by 2030.
SDG 4 (Quality Education): The edtech market aimed at closing the education gap is growing rapidly, and digital education is spreading into rural areas.
Japan's Kubota develops and sells tractors customized for smallholder farmers in India. Through product design tailored to local needs — compact and low-priced — it is helping raise productivity in rural areas where mechanization still lags, while expanding its share of India's farm-equipment market. It's one of the most instructive models of a Japanese company succeeding in SDG business.
Japan's certified NPO ARUN Seed has made an impact investment in Stellapps, an Indian company that uses IoT technology to improve the dairy supply chain. Stellapps' sensor technology has improved milk quality control and traceability, contributing to higher incomes for smallholder dairy farmers (source: e-Square).
Tata Power Solar, India's largest solar power company, is driving the spread of distributed solar power into rural areas. By converting agricultural pumps to solar power and building microgrids, it is expanding its business while bringing electricity access to areas that previously had none.
This is a social enterprise that provides safe drinking water to rural India. It deploys low-cost water purification facilities using UV sterilization technology, serving thousands of rural communities. As a revenue model, it charges just a few rupees per liter, an extremely low price point, while still running a sustainable business.
The “SDG Business Co-Creation Lab” (Tsunagaru Lab) run by JICA's India office supports matching Japanese companies with Indian social enterprises and startups. Through business matching events, showcasing collaboration case studies, and providing access to local networks, it promotes Japanese companies' entry into SDG business (source: e-Square).
Water treatment technology, energy-saving technology, food safety management, and waste treatment technology held by Japanese companies are solutions that connect directly to India's SDG challenges. The first step is to reorganize your company's technology assets around the question of “which SDG can this contribute to.”
DFIs such as JICA, the ADB (Asian Development Bank), and the IFC (International Finance Corporation) actively provide loans and investment for SDG business in India. Combining the funding these institutions offer with Japanese companies' technology makes it possible to carry out large-scale projects.
India is home to thousands of social enterprises built around solving social challenges as their core business. Local partners to gain market understanding and last-mile distribution networks by collaborating as one. That said, an education service that bridges cultural gaps understanding of it and a long-term commitment are essential.
India's SDG challenges are less about major cities such as Delhi and Mumbai, and more about Tier 2 and Tier 3 cities and rural areas.
Regulatory complexity: You need to deal with regulations and permits that differ from state to state. Environmental regulations and agriculture-related rules in particular are amended frequently, so Causes of failure staying on top of them and preparing for changes is important.
Avoiding “SDG-washing”: Superficial SDG efforts tend to draw harsh criticism from investors and the media in India as well. What's required is setting measurable impact indicators and disclosing information with a high degree of transparency.
The need for a long-term perspective: SDG business can be difficult to recoup returns from in the short term. What's needed is a business plan spanning 5 to 10 years and a phased scale-up strategy.
Because social challenges such as poverty, educational inequality, and environmental problems exist in India alongside economic growth, and solving these challenges itself creates a market. The impact investing market is expanding at a high growth rate, and capital is flowing into problem-solving businesses at an accelerating pace.
Examples include agricultural technology, cold chain, and food processing related to fighting hunger; water treatment and purification technology; renewable energy centered on solar power; and edtech aimed at closing the education gap. The view is that the larger the challenge in an area, the larger the business opportunity.
There is an example of a company that developed and sold farm machinery customized for smallholder farmers, expanding its market share while helping raise productivity in rural areas. Also introduced are an impact investment in a startup improving the dairy supply chain, and a Japan-India matching support initiative.
The first step is taking stock of technology assets — such as water treatment, energy-saving technology, food safety management, and waste treatment technology — from the perspective of which SDG they can contribute to. Organizing them within a technology-and-social-challenge framework reveals solutions that connect directly to India's challenges.
You need to deal with regulations and permits that differ by state, and environmental and agriculture-related rules in particular are amended frequently. Superficial efforts are also easily criticized as SDG-washing, so setting measurable impact indicators and disclosing information with a high degree of transparency are required. Returns can be difficult to recoup in the short term, making a long-term business plan essential as well.
We recommend starting by grasping the overall picture of the Indian market and identifying the SDG area where your company's technology and resources can be put to best use. Keeping partnerships with development finance institutions and collaboration with local social enterprises in view alongside this makes it easier to map out a path from proof-of-concept in a major city to scaling out into smaller cities.
SDG business in India is not a charitable or philanthropic activity; it is “real business” that combines solving social challenges with securing profit. As the cases of Kubota, ARUN Seed, and JICA's Co-Creation Lab — Japanese companies and institutions already achieving results — show, combining Japan's technological strength with India's social challenges creates major business opportunities.
It is recommended to first build a track record in Overview of the Indian Market, and start by identifying the SDG area where your company's technology and resources can be put to best use. the healthcare sector and 2025 India Market Trends is also worth referring to.
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