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2026.03.24
Faridabad is a city of about 2 million people in Haryana state in northern India, located roughly 25 km southeast of the capital, Delhi. It is one of the major cities making up the Delhi National Capital Region (NCR), and manufacturing is so concentrated there that it is called "Haryana's industrial capital." More than 5,000 automobile and two-wheeler parts manufacturers, electronics manufacturers, and engineering companies are based there, forming one of North India's leading industrial clusters.
Faridabad is directly connected to central Delhi via the Delhi Metro's Violet Line, and also has excellent access to National Highway NH-44 and the KMP (Kundli-Manesar-Palwal) Expressway, making it a city with extremely high logistical convenience. It has also been selected as a target city under the Indian government's Smart Cities Mission, and modernization of urban infrastructure is proceeding rapidly.
For Japanese companies, Faridabad is an important candidate location within Delhi NCR alongside Gurugram (Gurugram) and Noida. In manufacturing in particular, it is drawing attention as a practical option for setting up a factory, thanks to relatively lower land acquisition costs than Gurugram and easier access to labor. Overview of the Indian Market as a Whole With this in mind, this article explains in detail Faridabad's industrial structure, the latest development trends, and strategies for Japanese companies to make use of it.
The automotive-related industry forms the core of the Faridabad economy. It hosts a dense cluster of Tier 1 and Tier 2 suppliers, supporting the supply chain for nearby vehicle manufacturers such as Maruti Suzuki (Gurugram/Manesar plants) and Honda two-wheelers (Manesar plant). Honda ended four-wheeler production at its Greater Noida plant in December 2020 and has consolidated it at Tapukara, Rajasthan. Faridabad's strength lies in its broad base of component manufacturing technologies, including precision metalworking, pressed parts, and rubber and resin molded products.
In recent years, benefiting from the Indian government's PLI (Production Linked Incentive) scheme, automotive parts have been moving toward higher added value. In particular, as demand for EV (electric vehicle) parts grows, Faridabad's importance is also rising as a production base for battery-related components and power electronics.
Faridabad has a large concentration of mid-sized companies engaged in manufacturing machine tools, industrial machinery, and construction machinery. Against the backdrop of growing construction and infrastructure demand within India, this sector continues to show stable annual growth of 8 to 10%. It is a promising candidate location for technology tie-ups and joint ventures for Japanese machine tool manufacturers and parts suppliers.
Faridabad is also a major hub of North India's textile industry. Many companies there produce and export ready-made garments (RMG) and are integrated into supply chains exporting to the West. Investment in this sector is also trending upward, driven by growing demand for fast fashion and the Indian government's textile promotion policies.
What has the greatest potential to transform Faridabad's industrial development is the "Faridabad–Palwal 9,000-Acre Industrial City" plan announced by the Haryana state government in 2025. This plan, which will acquire land from 18 villages to build one of the state's largest industrial clusters, addresses the structural problem of land shortage in the existing Faridabad industrial area.
This new industrial city has been sited for good access to existing industrial zones and national highways, and it also aims to attract IT, logistics, and R&D facilities in addition to manufacturing. Amid rising land prices and congestion in Gurugram and central Faridabad, it is drawing attention from domestic and international companies as an alternative growth location.
For Japanese companies, it is strategically important to secure a plot early in the new industrial park and to formulate an entry plan that makes use of the state government's investment incentive schemes. the overview of the Delhi National Capital Region market we recommend continuously monitoring the progress of this new industrial city as well.
Haryana formulated an EV policy in 2022, setting the ambitious goal of making the state a global hub for EV manufacturing. Under this policy, Faridabad, along with Gurugram, has been designated a "model electric mobility city," with 100% electrification of commercial passenger vehicles set as a medium-term target.
The main incentives for EV-related manufacturing are as follows.
These incentives are extremely attractive to Japanese EV parts manufacturers and battery-related companies. Small and medium-sized enterprises manufacturing parts for two-wheeler EVs are already increasing around Faridabad, and a supply chain ecosystem is beginning to take shape.
Haryana is also putting effort into attracting investment in green hydrogen and clean energy, and Faridabad's industrial structure is at a turning point, shifting from traditional heavy industry toward environmentally conscious, advanced manufacturing. India's Startup Ecosystem Innovation in the clean-tech sector through collaboration with these initiatives is also expected.
Faridabad is directly connected to central Delhi via the Delhi Metro's Violet Line. The section between Badarpur and Escorts Mujesar runs through Faridabad, greatly improving commuting and business access.
Going forward, an extension of the RRTS (Regional Rapid Transit System) connecting major cities within the NCR is also planned; if realized, it will further shorten travel times between Delhi, Faridabad, and Palwal. This is a factor that enhances Faridabad's appeal not only as a manufacturing base but also as a location for business services and R&D.
NH-44 (formerly NH-2, between Delhi and Agra) passes through Faridabad, providing easy access to major consumption centers in North India. In addition, the KMP Expressway has also improved connections toward Gurugram and Manesar. Because the area is also included within the sphere of influence of the Delhi-Mumbai Industrial Corridor (DMIC), development as a large-scale logistics hub is also expected in the future.
When considering a business location in Delhi NCR, Faridabad is a strong candidate alongside Gurugram (Gurugram) and Noida. The characteristics of each are compared below.
| Point of comparison | Faridabad | Gurugram | Noida |
|---|---|---|---|
| Major Industries | Manufacturing and auto parts | IT, finance, and services | IT and electronics |
| Industrial land cost | Relatively low | High | Moderate |
| Labor supply | Abundant skilled manufacturing workers | Mostly white-collar | Mostly IT talent |
| Logistics access | Direct access to NH-44, close to DMIC | Direct access to NH-48, close to the airport | Access toward eastern Uttar Pradesh |
| Concentration of Japanese companies | Moderate (mainly manufacturing) | High (mainly services) | Moderate (mainly IT) |
Faridabad's greatest competitive advantage is its manufacturing-friendly environment and relatively low costs. While Gurugram is a hub for services and MNC headquarters functions, Faridabad is differentiated as a "manufacturing" base. For Japanese manufacturers, a two-location strategy — Faridabad as the factory site and Gurugram for sales and administrative functions — makes rational sense.
The Indian government's PLI (Production Linked Incentive) scheme is a subsidy program covering 14 sectors, including automobiles and auto parts, electronics, and medical devices, designed to promote domestic manufacturing. By establishing a manufacturing base in Faridabad and producing in a PLI-eligible field, it is possible to substantially raise the return on investment.
Taking advantage of the incentives under Haryana's EV policy and Faridabad's designation as a model electric mobility city, it is effective to enter early as a manufacturing base for EV-related parts and clean-tech products. Incentives such as the electricity duty exemption (for 20 years) and employment subsidies directly accelerate the recovery of initial investment.
The 9,000-acre new industrial city is a large-scale project that will shape Faridabad's industrial development for decades to come. It is important to build relationships with the state government and development authorities from the planning stage, so as to secure good plots and coordinate with the infrastructure development schedule.
By making use of Faridabad's geographic advantages, it is possible to optimize its role as a production base within the overall Delhi NCR supply chain. Building a JIT (just-in-time) supply system to vehicle assemblers located in the nearby Gurugram-Manesar industrial belt can reduce inventory costs and shorten lead times.
Faridabad has numerous mid-sized companies with decades of track record manufacturing auto parts and engineering products. Technology tie-ups and OEM outsourcing with these companies are a strong strategy for achieving both speed and cost efficiency when entering the Indian market. Localization for the India market From this perspective as well, collaboration with a local partner is an essential element.
When considering entry into Faridabad, the following risk factors also need to be kept in mind.
Complexity of land acquisition: Available plots are limited in the existing industrial areas, and land acquisition procedures can take time in some cases. Until development of the new industrial city is complete, using rental industrial parks or plug-and-play facilities is also a realistic option.
Labor management: In Faridabad, where manufacturing is concentrated, securing labor during peak periods can be a challenge. In particular, competition for talent with companies in Gurugram and Delhi is intensifying for positions requiring advanced skills. Compliance with Haryana's local employment preference policy (the obligation to employ people from the state) is also necessary.
Compliance with environmental regulations: In Delhi NCR, the GRAP (Graded Response Action Plan) is implemented as an air pollution countermeasure, and construction activity and some industrial activity can be restricted in winter. Building an environmental compliance system is a point that should be carefully prepared before entry.
Infrastructure still under development: In some areas, challenges remain in the stability of the power supply and in water and sewage infrastructure. When selecting a factory site, it is essential to confirm the specific infrastructure conditions through an on-site survey. Factors Behind Failed Entries into India Understand these points in advance and hedge against the risks.
As a core manufacturing hub within the Delhi National Capital Region, Faridabad is a city of extremely high strategic value for Japanese companies. The ecosystem of more than 5,000 manufacturing companies, the 9,000-acre new industrial city plan, Haryana's generous incentives for EV and green manufacturing, and good access via the Delhi Metro and major highways together provide ample grounds for positioning Faridabad as "North India's manufacturing hub."
According to IMF forecasts, the Indian economy is expected to grow 6.5% in FY2025, and in a JETRO survey, 77.7% of Japanese companies operating in India reported expecting to be profitable, indicating a favorable business environment. To reliably capture this wave of growth, companies need to closely watch industrial trends in the Delhi NCR, including Faridabad, and work out the optimal timing and strategy for market entry.
Companies considering manufacturing entry into the Indian market should first Overview of the Indian Market Grasping Delhi National Capital Region understand the business environment there, and then we recommend evaluating specific investment opportunities in Faridabad.
It is one of North India's leading industrial cities, located in southern Haryana within Delhi NCR, and is called "Haryana's industrial capital." Manufacturing industries such as automobiles and auto parts, engineering, and textiles are concentrated there, with more than 5,000 manufacturers based in the city.
It suits manufacturing businesses such as automobiles and auto parts, machinery and engineering, EV and green manufacturing, and textiles and apparel. It is a city that is easy to integrate into the Delhi NCR supply chain and works well as a base for production and parts supply.
Gurugram is centered on sales, management, and services, and Noida is a balanced mix of IT and manufacturing, whereas Faridabad is characterized by its focus on manufacturing and its ease of keeping land and costs down. Companies can split functions, with sales and management in another city and production in Faridabad.
These include being able to keep land and labor costs lower than in Gurugram, being able to take advantage of Haryana's incentives for EV and green manufacturing and the PLI scheme, and ongoing development of transport infrastructure such as the Metro and RRTS.
Sales and management functions are less concentrated there compared with Delhi or Gurugram, making it less suited as a base for anything other than manufacturing. Because the large-scale industrial city plan is being developed in stages, decisions on land acquisition and timing need to be made while checking the progress of the plan.
Start by defining the function you will handle, such as manufacturing or parts supply, and checking the industrial parks and incentives suited to your industry. Next, arrange land, personnel, and a local partner, and design your role within the overall Delhi NCR supply chain to make the process easier.
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