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    India–Japan Business 2026:Why Japanese Investors Should choose India for Business Expansion?

    Published Tue, 09 Dec 2025 | Updated Tue, 09 Dec 2025 Corporate Law

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    India–Japan Business 2026: Why Japanese Investors Should choose India for Business Expansion?

    India-Japan economic relations are entering into a new era, after Prime Minister Shri Narendra Modi’s visit to Japan from 29-30 August 2025 for the Annual Summit meeting with Prime Minister Mr. Ishiba Shigeru.

    In this summit the two countries endorsed the India–Japan Joint Vision for the Next Decade, a blueprint for deepening strategic and economic co-operation that further directly enhances prospects for Japanese investors seeking to tap into India.

    For Japanese enterprises considering their business registration in India, this relationship provides confidence and long-term clarity — establishing India as one of the most promising global markets for growth.

    Why India? — Strengthened India–Japan Vision for the Next Decade

    Here are the brief highlights of the official press release which cumulatively make administration in India a tempting environment for Japanese business to expand –

    1. Japan Plans to Invest More in India Than Ever Before

    Japan to invest JPY 10 trillion in private investment in India over next 10 years.

    This means:

    • Supportive of Japanese corporates entering India
    • Greater certainty and stability in investment facilitation
    • India is Japan’s most reliable partner over long term

    2. Trade Between India and Japan Will Become Easier

    Review of implementation of the India-Japan Comprehensive Economic Cooperation Agreement (CEPA) for enhancing and diversifying bilateral trade and investment

    This means:

    • Lower trade barriers
    • Easier to import/export
    • Increased business in manufacturing, IT and services

    3. Make in India × Japan Quality – With GIFT City as a Key Hub

    • Strengthening India-Japan industrial cooperation for the “Make in India” initiative through The India Japan Industrial Competitiveness Partnership (IJICP) to help upgrade product quality in India.
    • Assistance to Japanese enterprises in GIFT City (India's international financial services centre)
    • Facilitating the payment systems cooperation between Japan and India including local currency transaction
    • Promoting cooperation among small and medium enterprises (SMEs) by facilitating visits of Japan's SMEs to India, developing downstream industries and organising an India-Japan SME Forum

    4. High-Tech and Supply Chains Will Be Safer and Smarter

    Both countries will cooperate in critical and future-proof sectors like:

    • Semiconductors, critical minerals, telecom, pharma, biotech, clean energy
    • AI (under the Japan–India AI Cooperation Initiative)
    • Battery supply chains

    5. Next-Generation Mobility and Smart Infrastructure

    India and Japan will jointly work on:

    • High-speed train (such as AI-driven maintenance and monitoring, energy transition in the railway sector, advanced metro rail system and mass rapid transit systems)
    • Smart cities & Decarbonisation of the City, model planning
    • Improved roads, logistics and cold-chain transportation
    • Digital and 3D city models for safer, disaster resilient infrastructure
    • Processing of automobile and air craft, marine vessels

    6. Innovation and Start-ups

    • Channeling investments to start-ups under AI via the “India-Japan fund of funds”.
    • Startup cooperation on open-innovation, social problems solving, advanced-tech, data-utilization, incubation and finance through the Japan-India startup support initiative (JISSI) initiated by Japan; addition of innovation to traditional linkages culture and enabling startups expand their business activities in both countries. 

    7. Investing in Next Gen Health

    • Supply Chain for essential medicines APIs and Medical equipment & boosting medical infra in our two countries.
    • Establishing Centers of Excellence for Yoga, Meditation, Ayurveda and Holistic wellness in Japan with the support from Ministry of AYUSH, India.

    8. Unprecedented People-to-People and Talent Movement

    India is also committed to sending 50,000 skilled professionals to Japan and also launching an Action Plan for India-Japan Human Resource Exchange and Cooperation that targets an exchange of more than 500,000 personnel in both directions in the next 5 years

    Business Structures Japanese Investors Can Choose in India

    Selecting the right form of business decisions when entering the Indian market. For India is a jungle, where one can swing from any tree: The reason being that Every Japanese firm has varied aims investment and operations plans; therefore, there are multiple setups in India.

    Below is a simple overview. You can click each option to learn more on our website:

    1. Private Limited Company (Wholly Owned Subsidiary)

    Ideal for long-term operations, full control, and limited liability.
     👉 How to register Private ltd Company in India

    2. Public Limited Company

    Suitable for large-scale businesses planning public investments or expansion.
     👉 Public Limited Company online Registration in India

    3. Limited Liability Company (LLC / LLP)

    Best for professional services, partnerships, and flexible management.
     👉 Apply Limited Liability Partnership (LLP) Registration in India

    4. Branch Office

    For companies wanting to undertake certain permitted revenue-generating activities without forming a subsidiary.
     👉 Branch Office Registration in India - Process, Documents

    5. Liaison Office (Representative Office)

    For communication, market research, or coordination without commercial activity.
     👉 Liaison Office Registration in India- Process, Benefits

    6. Project Office

    Ideal for short-term, specific projects awarded by an Indian entity.
     👉 Project Office Registration in India, process, documents

    Not Sure Which Structure Is Best for Your Company?

    Our India–Japan corporate advisory team will guide you based on your:

    • Industry
    • Investment plan
    • India entry strategy
    • Risk level
    • Tax considerations

    👉 Book a free consultation

    Common Challenges Faced by Japanese Investors in India — and How to Overcome Them

    1. Understanding India’s Multi-Layered Regulations

    India has laws at the central, state and local level.

    How we solve it:

    We offer end-to-end compliance mapping so that Japanese investors know precisely what is applicable to them.

    2. Deciding the Correct Business Structure

    Choosing the Correct Business Structure. A lot of investors have a hard time deciding between a subsidiary, a branch, and a liaison office.

    How we solve it:
    We will provide you detailed structure comparison consultations on each business structure.

    3. Bank Account Opening Delays

    Bank Account Opening Delays. Foreign-owned companies, including ours, have to go through additional validation.

    How we solve it:
    We work closely with banks that understand the Japanese market.

    4. Understanding Indian Taxation

    Understanding Indian Taxation. India has a complex tax structure with different types, such as: GST, TDS, corporate tax, branch tax, etc

    How we solve it:
    We provide a tax strategy uniquely designed by our tax experts for Japan.

    5.  HR, Payroll & Cultural Gaps

    HR, Payroll, and Cultural Gaps. To hire Indian staff, one requires knowledge of local norms and labour laws. 

    How we solve it:
    We provide payroll and labour laws, and cross-cultural onboarding.

    6. Maintaining Ongoing Compliance

    Ongoing Compliance. Annual filings, audits, and board meetings, as well as the upkeep of statutory registers, are requirements.

    How we solve it:
    We provide full corporate compliance so investors can focus on growing their business. 

    Conclusion

    PM Modi’s visit to Japan in 2025 has taken India–Japan relations to a new level, establishing a future-ready partnership in the areas of investment, technology, mobility, innovation, and skills.  Japanese firms are seeing India’s: Conducive Policy Certainty Positive Investment Climate Robust Inter-Government Support Broad Opportunities in Manufacturing & Technology.

    With these, 2026 becomes one of the finest times for Japanese companies to Setup a Business in India.

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