Home ／ Insights on entering the Indian market
2026.03.24
About 1,400 Japanese companies have entered India, and JETRO's FY2024 survey of Japanese companies operating overseas found that 77.7% of them reported being profitable, the highest level since 2008. Replacing the "JPY 5 trillion in public and private investment over 5 years" target set at the 2022 Japan-India leaders' agreement, a new target of JPY 10 trillion (about $67 billion) over the next 10 years was set at the 15th Japan-India Annual Summit in August 2025, making business relations between the two countries closer than ever.
This article analyzes successful examples of India-Japan business collaboration and explains 5 strategies that Japanese companies planning to enter the India market should learn.
Maruti Suzuki, a Suzuki subsidiary, is an overwhelming presence in India's passenger car market with about 40% share. The biggest factor in its success has been thoroughly researching India's road conditions, fuel efficiency needs, and price sensitivity, and consistently pursuing a product strategy focused on small cars.
As of 2025, Suzuki is making an additional investment of about JPY 1.2 trillion (about $8 billion, ₹70,912 crore (1 crore = 10 million rupees)) to expand its annual production capacity in India to 4 million vehicles. This is one of the largest foreign investments in India's automotive sector.
Toyota is investing about JPY 460 billion (about $3 billion, ₹26,592 crore) to expand its hybrid parts supply chain and is building a new plant in Maharashtra. It aims to launch 15 new and updated models in India by 2030 and to reach a 10% market share. It is also deepening its OEM partnership with Suzuki, positioning India as a global production hub.
Many of the Japanese companies that are profitable in the India market entered before 2014. This fact shows that, in the India market, a long-term commitment, rather than chasing short-term profits, is key to success.
Honda positions India as an export hub for next-generation EVs and plans to start production of its "Zero Series" electric vehicles in 2027. In addition to its current presence in the India market, it has a long-term vision of using India as a cornerstone of its global strategy.
Nippon Express draws on its global network and extensive experience to offer services suited to India's complex logistics environment. Through persistent, on-the-ground adaptation to India-specific challenges such as interstate tax systems and road infrastructure, it has built a solid market position.
At the 2025 Japan-India Business Leaders Forum, it was confirmed that local production and exports to third countries by Japanese companies are contributing to job growth in India. It is important to view India not merely as a sales market but as a global manufacturing and export hub.
Suzuki and Toyota alone have invested a combined total of about 1.7 trillion yen (about $11 billion, ₹97,504 crore = Suzuki ₹70,912 crore plus Toyota ₹26,592 crore) in India. Behind this lies intensifying price competition and falling profitability in China, which is accelerating the shift of production to India. Japanese investment in India's transport sector has jumped sevenfold since 2021, reaching about 290 billion yen (about $1.9 billion, ₹16,934 crore) in 2024.
Building relationships with trustworthy local partners is essential when operating in India. Many challenges are not visible from the outside, including complex regulations, differences in cultural business practices, and market characteristics that vary by state.
Uniqlo leverages its strength in high-quality, reasonably priced apparel while adapting to preferences and sizing specific to the Indian market. Its store rollout targeting the urban middle class, combined with marketing tailored to local purchasing patterns, has proven successful.
Rather than aiming for a nationwide rollout all at once, a phased approach that starts with specific cities or regions is effective in the Indian market. Many companies begin in the three major metropolitan areas of Delhi NCR, Mumbai, and Bengaluru, then expand to Chennai, Hyderabad, Kolkata, and other cities once they have established a successful model.
Based on the five strategies above, Japanese companies considering entering the Indian market are advised to take the following actions.
As of 2025, Japan-India business collaboration is deepening across a wide range of fields, including automotive, logistics, and retail. The strong performance, with roughly 80% of Japanese companies operating profitably, demonstrates that companies can achieve solid results in the Indian market with the right strategy. The keys to success lie in thorough adaptation to local needs, long-term commitment, collaboration with trustworthy partners, and a phased expansion approach.
A large number of Japanese companies have entered the Indian market, and surveys over the past few years show that a majority of them report being profitable, a record high level. This indicates that companies can achieve results in the Indian market with the right strategy.
Maruti Suzuki, Suzuki's subsidiary, holds a high share of the Indian passenger car market. Its greatest success factor has been thoroughly researching India's road conditions, fuel-efficiency needs, and price sensitivity, and consistently pursuing a product strategy focused on small cars.
Many of the profitable companies entered the market early. This shows that a long-term commitment, rather than a pursuit of short-term profit, is key to success.
It is the idea of using India not merely as a sales market but as a global manufacturing and export hub. Local production and exports to third countries by Japanese companies are also contributing to job growth in India, and automakers are accelerating investment in India as a destination for shifting production away from China.
This is because many challenges are not visible from the outside, including complex regulations, differences in business practices, and market characteristics that vary by state. Building relationships with trustworthy local partners provides the foundation for overcoming these challenges.
Rather than aiming for a nationwide rollout all at once, it is effective to start in the three major metropolitan areas of Delhi NCR, Mumbai, and Bengaluru, establish a successful model, and then expand to Chennai, Hyderabad, and other cities. It is also recommended to make use of public support programs such as JETRO and to draw up a long-term business plan.
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