Home ／ Insights on entering the Indian market
2026.03.24
India has the world's largest young population, with over 1.4 billion people, and is expected to maintain GDP growth of 6 to 7% in 2025. "Talent" underpins this economic growth, but alongside rapid development, many challenges remain in talent development.
特に日系企業にとって重要なニュースとして、日印両政府は5年間で50万人規模の人的交流（うち技能人材5万人）by 2030. Vocational training subsidies through the INPACT program, and internship and job-matching programs through the India-Japan Talent Bridge, have already begun.
The biggest challenge in India's education system is the serious educational disparity between urban and rural areas. While internationally competitive educational institutions are increasing in urban areas, there are no shortage of rural areas that lack even basic educational infrastructure.
The influence of the caste system also remains strong, and there is a reality in which educational opportunity is limited by social background. The Indian government has rolled out the Sarva Shiksha Abhiyan ("Education for All") program to develop educational infrastructure in rural areas. The spread of online education platforms holds the potential to bridge geographic disparities.
Amid rapid digitalization, India's university curricula are pointed to as having a gap with industry needs. There is a shortage of immediately deployable talent in cutting-edge fields such as AI, data science, and IoT, and companies are spending significant amounts on retraining after hiring.
When Japanese companies hire technical talent in India, an evaluation that weighs candidates' self-directed learning and project experience, not just university curricula, is effective.
Many Japanese companies do not have in-house HR teams well-versed in Indian hiring practices, and cases are seen where an effective hiring strategy has not been established. Because India's labor laws, tax systems, and employment regulations differ by state, a lack of understanding of the local legal framework poses a risk.
In addition, Indian universities have a unique hiring system called "campus placement," in which each university sets a dedicated recruiting period. For Japanese companies to make use of this system, building relationships with universities early on is necessary.
Local recruitment agencies often do not fully understand Japanese corporate culture and expectations, making mismatches likely to occur. the cultural gap between Japan and India significantly affects not only the hiring process but also post-hire retention.
Effective countermeasures include incorporating training on understanding Japanese culture into the hiring process, and placing Indian managers in middle-management roles to serve as a bridge between Japan and India.
In India's IT and services industry, annual turnover rates of 20 to 30% are not uncommon. This is especially true for top talent, who are in high demand in the job market, so a clear career path is important, not just compensation.
Japanese companies need to build a hybrid HR system that leverages the stability of "lifetime employment" as a strength, while also incorporating India's speed-oriented promotion system.
Tier 2 and Tier 3 cities there is a talent pool offering better cost performance than in major cities. The spread of remote work has widened the option of utilizing skilled talent based in regional areas.
Ahmedabad, Hyderabad, Chennai Cities such as these are drawing attention as recruitment destinations for Japanese companies, since IT talent there is high in quality and lower in cost.
While India's IT talent has strong technical skills, there are cases where gaps exist in soft skills such as business communication, project management, and quality control.
Japanese companies should enhance on-the-job training (OJT) programs after hiring, and also collaborate with vocational training programs offered by government bodies such as the NSDC to carry out planned skill development.
The Japanese and Indian governments have set a policy of expanding exchange of professional talent, and frameworks for subsidizing vocational training and matching internships and jobs are also being established. This is a framework that Japanese companies looking to secure talent can readily use.
In cutting-edge fields such as AI, data science, and IoT, there is a gap between university curricula and industry needs, leading to a shortage of immediately deployable talent. As a result, companies tend to spend on retraining after hiring. When hiring, an evaluation that weighs self-directed learning and project experience, not just university coursework, is effective.
Turnover is high in the IT and services industry, and top talent in particular is in high demand in the job market. A clear career path, not just compensation, is essential for retention. A hybrid HR system that combines Japanese-style stability with India's speed-oriented promotions is effective.
Campus placement is a unique Indian hiring system in which universities set dedicated recruiting periods. For Japanese companies to make use of this, early relationship-building with top universities such as the IITs and IIMs is necessary. When in-house HR capacity familiar with hiring practices is thin, partnering with a local expert is a practical approach.
When local recruitment agencies do not fully understand Japanese corporate culture and expectations, mismatches are more likely, which also affects retention. Solutions include incorporating training on understanding Japanese culture into the hiring process, and placing Indian managers in middle-management roles to bridge Japan and India.
Tier 2 and Tier 3 cities have talent pools with good cost performance, and the spread of remote work has made it easier to utilize skilled talent based in these regional areas. Cities such as Ahmedabad, Hyderabad, and Chennai are drawing attention as recruitment destinations, offering high-quality IT talent at lower cost.
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