Article summary
インド・ベトナム・タイの3カ国比較。日系企業数はタイ約5,550社、ベトナム約2,000社超、インド約1,400社。インドは巨大な国内市場とPLI、加工率の低さによる成長余地が強み。ただし新規製造業向けの法人税15%(Section 115BAB)は2024年3月31日までに製造を開始した企業限定の時限措置で、これから設立する企業には22%(実効25.17%)が適用される。
This article is based on what we could verify As of August 1, 2026 in public records and news reports from India. India revises its tax rules and regulations frequently, and the details here may have changed since. When making an actual business decision, please check the latest information with primary sources such as the ministries responsible and local experts.
Introduction: why selecting an entry destination among these three Asian countries matters
India, Vietnam, and Thailand are consistently among the top choices for Japanese companies expanding overseas. According to JETRO's fiscal 2025 survey, Thailand has about 5,550 companies, Vietnam has about 5,635 Japanese FDI projects, and India has about 1,400 Japanese companies established there. All are attractive markets, but cost structure, regulatory environment, and market size differ greatly. According to a survey by the Japan Bank for International Cooperation (JBIC), Japan's net investment in Vietnam grew 54% (an increase of about JPY 260 billion) from 2021 to 2023, surpassing Thailand (up 13%, an increase of about JPY 80 billion) in the same period to rise to second place in Southeast Asia (after Singapore). Investment trends are also shifting. This article compares the three countries from multiple angles and provides a practical framework for judging "which country to enter." For details on the Indian market, please also see
the basic guide to doing business in India is also worth referring to.
Comparison of basic indicators for the three countries
| Metric |
India |
Vietnam |
Thailand |
| Population (2025) |
1.45 billion |
About 100 million |
About 72 million |
| Nominal GDP |
About $4.1 trillion |
About $470 billion |
About $550 billion |
| GDP per capita |
About $2,818 |
About $4,700 |
About $7,600 |
| GDP growth rate (forecast) |
About 6.5-7% |
About 6.5% |
About 1.8-2.0% |
| Median age |
30 years |
32 years |
40 years |
| Urbanization rate |
About 36% |
About 39% |
About 53% |
| Number of Japanese companies |
About 1,400 |
Over about 2,000 (about 5,635 FDI projects) |
About 5,550 |
| Profitability rate of Japanese companies |
75.5% |
About 67.5% |
About 70% |
| Expansion intent |
81.5% (highest level) |
About 60% |
About 50% |
Original analysis: India for "scale," Vietnam for "efficiency," Thailand for "maturity"
The basic indicators of the three countries reveal a clear difference in positioning. India leverages its overwhelming
market size (a population of 1.45 billion, GDP of $4.1 trillion), Vietnam attracts investment through high
cost efficiency and rapid growth, and Thailand offers a stable business environment through its
mature industrial base and well-developed infrastructure.
A detailed comparison of labor costs
| Cost item |
India |
Vietnam |
Thailand |
| Manufacturing minimum wage (monthly) |
About $150-250 (varies greatly by region) |
About $195-250 (four regional tiers) |
About $300-350 |
| Manufacturing average wage (monthly) |
About $200-350 |
About $350 |
About $450-600 |
| IT engineer salary (monthly) |
About $800-2,000 |
About $600-1,500 |
About $1,000-2,500 |
| Social insurance burden rate |
About 12-15% |
About 21.5% |
About 5% |
| Wage growth rate (annual) |
About 8-10% |
About 6-8% |
About 3-5% |
Original analysis: the picture changes when you look at "total cost"
A simple comparison of minimum wages makes India look cheapest, but when you look at
total employment cost, including the social insurance burden rate, Vietnam's social insurance burden (about 21.5%) cannot be ignored. Thailand, on the other hand, has a low social insurance burden of about 5%, and its wage growth rate is also modest. India's strength is
the ability to leverage regional wage differences:.
Bengaluru and
Delhi wages have risen in
Ahmedabad and
in Tier 2 cities, while low-cost hiring remains possible in
Comparison of business environment and regulations
| Item |
India |
Vietnam |
Thailand |
| International indicators of business environment |
The World Bank's Doing Business ranking was discontinued on September 16, 2021. Its successor, B-READY, is score-based, and as of August 2026 only Vietnam has been assessed. India and Thailand are subject to the next round of surveys, so there is no official ranking that compares all three countries side by side |
| Foreign investment (FDI) regulation |
100% liberalized for food |
Restricted by industry |
Restricted under the Foreign Business Act |
| Corporate tax rate |
22% (effective rate about 25.17%). The 15% rate for new manufacturing businesses ended new applications at the end of March 2024 |
20% (a new law effective October 2025 introduces 15-17% for SMEs) |
20% |
| SEZs and industrial parks |
About 280 active SEZs |
About 400 industrial parks |
About 90 industrial parks |
| FTAs and EPAs |
Japan-India CEPA |
Japan-Vietnam EPA, RCEP |
Japan-Thailand EPA, RCEP |
| Corruption Perceptions Index (2025 edition) |
39 (ranked 91st) |
41 (ranked 81st) |
33 (ranked 116th) |
| Infrastructure quality |
Improving rapidly |
Still developing |
High quality |
| English proficiency (EF EPI 2025) |
484 points / Moderate |
500 points / Moderate |
402 points / Very Low |
Original analysis: the essential difference in regulatory risk
Of the three countries, Thailand has the most stable legal system and infrastructure, but in recent years political instability and foreign investment restrictions under the Foreign Business Act have become a drag. Vietnam is flexible in terms of regulation, but concerns remain about the opacity of its legal system under one-party rule. India, meanwhile, has a notoriously complex regulatory environment, but with reforms such as the GST (unified indirect tax) and FDI liberalization, it is the country with
the strongest reform momentum. That said, the often-cited 15% corporate tax rate for new manufacturing businesses (Section 115BAB) was a time-limited measure available only to companies that began manufacturing by March 31, 2024, and as of August 2026 has not been extended. For a newly established company, the 22% rate (an effective rate of about 25.17% including surcharges and cess) applies, which, looking at tax rates alone, is higher than the 20% rate in Vietnam and Thailand.
Market access and growth potential
| Item |
India |
Vietnam |
Thailand |
| Domestic market size |
Huge (1.45 billion people) |
Medium (100 million people) |
Medium (72 million people) |
| Food market size |
About $354.5 billion |
About $50 billion |
About $60 billion |
| Food processing growth rate |
Over 15% annually |
8-10% annually |
3-5% annually |
| the expansion of the middle class |
770 million people by 2030 |
About 50 million people by 2030 |
About 20 million people (stable) |
| Value as an export base |
For the Middle East and Africa |
For the West (leveraging FTAs) |
For within ASEAN |
| E-commerce platforms |
Flipkart, Amazon India |
Shopee, Lazada |
Shopee, Lazada |
Original analysis: evaluating along two axes, "domestic market" vs "export base"
The most important consideration in selecting an entry destination is whether to view the country as a "sales base for the domestic market" or as a "manufacturing base for exports."
- For companies prioritizing the domestic market -> India is the clear choice: India's domestic market of 1.45 billion people is about 8.5 times the combined population of Vietnam and Thailand (about 170 million). It is the only option where a business can scale through domestic sales alone.
- For companies prioritizing an export base -> Vietnam has the advantage: Vietnam has strengths in exports to the West and ASEAN, leveraging FTAs such as the EVFTA with the EU and UK, and RCEP.
- For a balanced approach -> Thailand: Thailand offers a balanced choice for both exports within ASEAN and domestic consumption.
Analysis of Japanese companies' investment trends
According to JETRO and M&A data, Japanese companies' investment trends for 2024-2025 are as follows.
Vietnam: a surge in investment from Japan
In 2024, Japan's net investment in Vietnam surged 54% year over year (an increase of about JPY 260 billion), rising to second place in Southeast Asia after Singapore. Investment is concentrated in fields such as AI and semiconductors. Cross-border M&A in Vietnam recorded 42 deals in 2025.
Thailand: sluggish investment growth
Japan's net investment in Thailand grew only 13% year over year (an increase of about JPY 80 billion), falling behind Vietnam. While about 5,550 Japanese companies are already established there,
a slowdown in new investment has been noted. M&A in Thailand totaled 39 deals in 2025.
India: expansion intent at the highest level
Japanese companies' investment in India, with 37 M&A deals (2025), is lower in absolute terms than Vietnam or Thailand, but
the expansion intent of companies already established there stands at 81.5%, the highest level in the world. In other words, the country is shifting from the "companies now entering" stage to the "companies that have entered are now expanding" stage.
A guide to selecting the optimal country by industry
| Industry |
Optimal country |
Reason |
| Food processing and manufacturing |
India |
Huge domestic market, PLI schemes, and significant room for growth given a processing rate of 10% |
| Electronic components and semiconductors |
Vietnam |
Export base leveraging FTAs, concentrated supply chains |
| Automobiles and parts |
Thailand |
Existing supply chains, ASEAN regional hub |
| IT and software |
India |
The world's largest pool of IT talent, English proficiency |
| Apparel and textiles |
Vietnam |
Low-cost labor, leveraging the EVFTA |
| Retail and consumer goods |
India |
A consumer market of 1.45 billion people, an expanding middle class |
| Pharmaceuticals and healthcare |
India |
A generics powerhouse, a large patient population |
Comparison of risk factors
| Risk item |
India |
Vietnam |
Thailand |
| Political risk |
Low (stable democracy) |
Low (stable under one-party rule) |
Medium (risk of political upheaval) |
| Currency risk |
Medium (rupee volatility) |
Low to medium |
Low to medium |
| Infrastructure risk |
Medium (improving) |
Medium |
Low |
| Labor dispute risk |
Medium |
Medium |
Low |
| Geopolitical risk |
Low-medium (China-India relations) |
Medium (South China Sea issues) |
Low |
| Natural disaster risk |
Medium (floods, cyclones) |
High (typhoons, floods) |
Medium (floods) |
Conclusion: how to use the three countries
Summarizing the analysis in this article, the optimal use of the three countries is as follows.
Companies that should choose India:
- companies aiming for long-term growth in a huge domestic market
- companies considering entry into food processing, consumer goods, or IT
- companies seeking a scalable alternative market under a "China + 1" strategy
- Mumbai-Delhi-Bengaluru companies wanting to use it as a base to cover South Asia and the Middle East
Companies that should choose Vietnam:
- companies wanting to build an export base for the West
- manufacturing companies in electronic components, semiconductors, or apparel
- companies wanting to shift manufacturing away from China at low cost
Companies that should choose Thailand:
- companies seeking a hub function within ASEAN
- companies in automobiles and parts manufacturing wanting to leverage existing supply chains
- companies that prioritize a stable business environment and infrastructure
Ultimately, rather than settling on a single country,
a "three-hub Asia strategy" that combines the strengths of each country is ideal. Attacking the consumer market in India, running export manufacturing in Vietnam, and locating an ASEAN headquarters function in Thailand: a composite strategy like this will likely be the optimal answer for Japanese companies' Asia growth strategy.
Frequently asked questions
- How are India, Vietnam, and Thailand each positioned in terms of characteristics?
-
They can be summed up as India for scale, Vietnam for efficiency, and Thailand for maturity. India's weapon is its overwhelming market size, Vietnam's is its high cost efficiency and rapid growth, and Thailand's is its mature industrial base and well-developed infrastructure.
- Can labor costs be judged from a simple wage comparison alone?
-
The picture changes when you look at total employment cost, including the social insurance burden. Vietnam's social insurance burden cannot be ignored, while Thailand's burden is low and its wage growth is also modest. India can leverage regional wage differences, and Tier 2 cities are said to still offer low-cost hiring.
- What criteria should be used to select an entry destination?
-
Evaluating along the axis of whether the country will serve as a sales base for the domestic market or a manufacturing base for exports is effective. For companies prioritizing the domestic market, India offers overwhelming scale; for those prioritizing an export base, Vietnam offers the advantage of leveraging FTAs; and for a balance of the two, Thailand is considered suitable.
- Which country is best for food processing and manufacturing?
-
India is considered a strong candidate for food processing and manufacturing, thanks to its huge domestic market, the Production-Linked Incentive (PLI) scheme, and the substantial growth headroom created by its low processing rate. However, the widely cited 15% corporate tax rate for new manufacturers (Section 115BAB) was a time-limited measure available only to companies that began manufacturing by March 31, 2024, and does not apply to companies established from now on.
- How do the three countries differ in terms of regulatory risk?
-
Thailand rates highly on business environment assessments, but political instability and foreign investment restrictions are a drag. Vietnam is flexible in terms of regulation but has concerns about legal system opacity. India has a complex regulatory environment but is considered a country with strong reform momentum, including tax reform and FDI liberalization.
- In practice, how should the three countries ideally be used together?
-
Rather than settling on a single country, a multi-hub Asia strategy that combines the strengths of each country is considered ideal. This is a composite strategy of attacking the consumer market in India, running export manufacturing in Vietnam, and placing an ASEAN headquarters function in Thailand. It is recommended to clarify one's own business objectives and design the division of roles accordingly.
Sources and references