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2026.03.24
Kolkata (formerly Calcutta) is the economic and cultural center of East India and the capital of West Bengal state. Its GDP at purchasing power parity was about USD 220 billion (2024), making it one of India's oldest commercial cities. Home to the Calcutta Stock Exchange, one of Asia's oldest stock exchanges, it has long thrived as a hub of commerce and trade.
West Bengal's GSDP (Gross State Domestic Product) is projected to reach 20.3 trillion rupees (about USD 240 billion) in fiscal 2025-26, making it one of the fastest-growing states in India.
Kolkata’s IT industry expanded from the late 1990s at about 70% a year, twice the national average. The "Bengal Silicon Valley Tech Hub," being built across about 250 acres in New Town, specializes in IT/ITeS, data centers, e-commerce, IoT, AI, and R&D, and is expected to create 100,000 direct jobs. Total investment in the project comes to 1 trillion rupees (about $12 billion).
UK IT major RedoQ Group has announced an investment of 100 crore (1 crore = 10 million rupees), and fellow UK company Praefferre is also expanding its operations in Kolkata, accelerating the entry of overseas IT companies into the city.
The number of registered companies in West Bengal grew 82.5%, from 137,156 in 2011 to 250,343 by March 2025. Since 2019 alone, 44,040 new companies have been incorporated, while only 1,742 have relocated out of the state — figures that back up the improvement in the business environment.
BGBS, held every year in Kolkata, is a key platform for attracting domestic and international investment. The February 2025 edition covered investment projects across a wide range of sectors, including manufacturing, IT, and infrastructure.
Kolkata is associated with Nobel laureate Rabindranath Tagore and Mother Teresa, and is known as one of India's most culturally rich cities. Its food culture is also distinctive, with sweets (mishti) and Bengali cuisine serving as important tourism assets.
For Japanese companies, understanding this cultural background and building a brand tailored to Kolkata is key to succeeding in the market.
When considering entry into Kolkata, companies need to weigh both its strength as an East India gateway and its historical context. West Bengal once saw sluggish foreign investment in factories and manufacturing due to labor movements and political conditions, and has long been viewed cautiously as a result. In recent years, the tide has been turning thanks to an improving business environment and IT industry growth, but it is still reassuring to confirm the current state of labor and administrative procedures, and to have an exit strategy in place in case of downsizing or withdrawal.
In terms of the role each hub plays, manufacturing and exports are centered on Mumbai and Ahmedabad in the west, while IT and manufacturing are centered on Bengaluru and Chennai in the south. Kolkata, by contrast, makes practical sense as a sales and distribution gateway to East India as a whole, India's Northeast, and Bangladesh. Drawing on resources such as JETRO's local office information and positioning Kolkata as the window to the East India market makes it easier to clarify the purpose of entry.
When looking for a base in Kolkata, the center for IT and services is Salt Lake Sector V (Bidhannagar). Electronics and IT companies are clustered across about 430 acres, and it is often called the “Silicon Valley of the East” — the most established IT cluster in East India. In recent years, New Town (Rajarhat) to the northeast has also grown as an emerging office hub, home to tenants such as TCS, Capgemini, Cognizant, Ericsson, and HDFC Bank. Grade A office leasing has expanded significantly in recent years.
The state-led "Bengal Silicon Valley Tech Hub" is also being developed on about 250 acres in New Town. With total investment estimated at 1 trillion rupees, plots are being allocated to companies such as TCS, Reliance Jio, Cognizant, and Infosys, and the area is growing into a cluster for IT, data centers, and GCCs (global capability centers). Companies considering an IT or services entry into Kolkata should look first at this Sector V–New Town corridor.
When considering a manufacturing base in Kolkata or West Bengal, it is essential to learn from past cases. The most symbolic is the 2008 Singur incident: when Tata Motors tried to acquire land for its small car "Nano" factory, opposition to the farmland acquisition intensified, and Tata ultimately withdrew from West Bengal and moved the plant to Sanand in Gujarat. Set against a backdrop of left-wing politics that long governed the state and a strong labor union culture, this episode illustrates why land acquisition and labor matters in manufacturing call for caution here.
There are also examples of foreign companies restructuring their operations. Mitsubishi Chemical had been producing purified terephthalic acid (PTA) in Haldia, but sold the business to a local company in 2016 and exited its East India manufacturing base (a business transfer, not a bankruptcy). In light of such precedents, companies entering with manufacturing operations would do well to carefully check the current state of land acquisition and labor conditions, and to map out an exit strategy — including downsizing or withdrawal — in advance, as an effective risk management measure.
Kolkata's geographic strength lies in serving as a gateway from East India to Northeast India and on to Bangladesh, Bhutan, and Southeast Asia. Netaji Subhas Chandra Bose International Airport is a major hub with flights to Northeast India, Dhaka, and the Middle East (Dubai and Doha), and is directly linked to the airport by the metro's Yellow Line (Noapara–Jai Hind, opened in 2025). By sea, there are the ports of Kolkata and Haldia, which also connect to nearby industrial clusters in Howrah, Durgapur, and Haldia.
Rather than large-scale manufacturing investment, positioning Kolkata as a base for market development across East India, services and back-office functions, and a starting point for distribution into the Northeast and Bangladesh makes the most of its strengths. While cities in the west and south are the main stage for manufacturing and IT entry, it makes practical sense to use Kolkata for its role as the window to East India.
On daily life, Kolkata is considered one of the easier major Indian cities for housing and living costs. Japan Club Kolkata is active as the Japanese community, and the Consulate-General of Japan in Kolkata covers West Bengal, Jharkhand, Bihar and Odisha, plus the northeastern states including Assam and Sikkim and the Andaman and Nicobar Islands. There is, however, no full-time Japanese school; a small supplementary school is what operates. Anyone considering a long posting with family needs to factor in the limits on schooling from the outset.
West Bengal was once viewed cautiously for manufacturing investment, but in recent years the state has focused on improving its business environment. At the 2025 edition of the state-hosted Bengal Global Business Summit (BGBS), Japan took part as one of the partner countries, and a dedicated country session for Japan was also held. Total investment plans are said to amount to 4.4 trillion rupees, with more than 200 memorandums and agreements signed. The number of registered companies in the state has also grown significantly in recent years, with business activity picking up around IT and services.
These figures are only investment "plans" and do not guarantee that construction or operations will actually go ahead. Even so, it is clear the state is committed to attracting foreign investment and improving conditions, and growth continues, especially in IT and IT services. Companies considering entry should weigh both this policy tailwind and the historical points of caution when making their decision.
Given the characteristics described so far, Kolkata is well suited to IT and IT services, sales and distribution for the East India market, and service and back-office functions aimed at expansion into the Northeast and Bangladesh. While large-scale manufacturing investment requires careful consideration of land and labor issues, a base for software development or regional sales can make the most of low costs, available talent, and gateway status.
In terms of approach, start by defining the function the base will serve in East India, then design it around office space in Sector V or New Town. Next, build out hiring, local partners, and accounting and labor systems, and take the sound approach of starting small as a window to East India before expanding. If manufacturing is involved, it is reassuring to factor in land acquisition, labor, and an exit strategy from the early stages.
Kolkata is the center of East India, achieving remarkable economic growth with a track record of the IT industry expanding at 70% a year in the late 1990s, a 1-trillion-rupee Silicon Valley Tech Hub project, and an 82.5% rise in the number of companies. Backed by West Bengal's GSDP of 20.3 trillion rupees, its value as a "fourth hub" after Delhi, Mumbai, and Bengaluru is growing. Cost competitiveness and geographic advantage toward the east are benefits Japanese companies should not overlook.
It is the capital of West Bengal and the economic and cultural center of East India. In addition to its long history as a commercial hub, the IT industry has grown rapidly in recent years, and it functions as a gateway to East India and India's Northeast.
IT and IT services, along with sales and distribution for the East India market, are the main fits. It suits companies that want to set up a base for regional development as a window to East India, India's Northeast, and neighboring Bangladesh.
These include serving as the gateway to a wide regional market as the largest city in East India, an IT industry that keeps growing rapidly, an improving business environment reflected in the rising number of registered companies, and labor and office costs that are easier to keep down than in the west or south.
West Bengal has historically been viewed cautiously for foreign factory and manufacturing investment due to the influence of labor movements and political conditions. When entering, it is reassuring to confirm the current state of labor and administrative procedures and to plan an exit strategy that includes downsizing or withdrawal.
Manufacturing and exports are centered on Mumbai and Ahmedabad in the west, and IT and manufacturing on Bengaluru and Chennai in the south. It makes practical sense to use Kolkata separately as a sales and distribution gateway to East India and the Northeast.
Start by defining the function the base will serve in the East India market — such as sales, distribution, or IT. Next, using resources such as JETRO's local office information, arrange office space, hiring, and local partners, and take the sound approach of starting small as a window to East India before expanding.
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