India and Japan have had close civilizational ties for over 1,400 years. The collaboration between the two countries today is spread over a wide range of areas from economic diplomacy to shared ideals in defense and security. Let us see the impact of Japanese companies entering
Current Statistics
Today, there are more than 12,000 Japanese nationals living in India and over 32,000 Indians residing in Japan. There are over 1,500 Japanese companies registered in India, up from 1,369 in 2017. These Japanese companies in India market have over 5,200 business establishments spread across states and union territories like Delhi, Maharashtra, Karnataka, Tamil Nadu, West Bengal
The southern Indian state of Karnataka alone has over 550 Japanese companies operating, up from around 200 five years ago in 2015. The Japanese citizens living in Karnataka have doubled during this time. With the establishment of Toyota, Honda, Hitachi, Fujitsu, and other Japanese companies, the state capital Bengaluru attracts more than 1,800 Japanese business tourists monthly. Direct flights to the city have been announced in order to meet the demands of business visitors. Japan Habba is one of the biggest India-Japan cultural programs that take place in Bengaluru. It has become an annual feature celebrating Japanese culture and draws more than 5,000 people from across India.
Chennai in Tamil Nadu boasts of the largest Japanese community in India and hosts a third of the Japanese companies here.
Gujarat too is growing as a Japanese expatriate hub. The western state is a favored investment destination for Japanese companies. As much as 40% of the Delhi Mumbai Industrial Corridor (DMIC), which is being jointly developed by the two countries, passes through Gujarat.
Delhi and Haryana have a combined strength of over 1100 Japanese business establishments, followed by Maharashtra with over 1000, and Tamil Nadu with over 700, as of December 2019. Many Japanese international schools have been set up in Mumbai and Delhi to offer quality education for the children of expats.
Start-Up Facts
| India |
| 1.3 Bn Population |
| 500 Mn Internet users || 41.6% Internet penetration |
| #1 IT / BPM services sourcing market |
| 13,000+ startups registered with Startup India |
| 18 Unicorn Startups with over $60 Bn valuation |
| Japan |
| 127 Mn Population |
| 120 Mn Internet Users || 92.8% internet penetration |
| #1 Robotics Destination in the world |
| 1 out of 10 Fortune Global 500 companies have HQ in Japan |
| Over $10 Bn Japanese VC investment in Indian startups |
Commercial Relations
Japan is the 3rd largest investor in the Indian economy with a cumulative FDI of over $ 30 bn during 2000-2019 contributing to over 7% of India’s total FDI during the same period.
India’s import has shown a growth of over 100% in the last 12 years making Japan one of India’s key import partners. Also, Japan is India’s 19th largest export partner showing a growth of over 25% in the last 12 years.
Reason for growth and success of Japanese companies in India:
A lot of Japanese companies are seeking new markets outside Japan because of reducing the demographic dividend of Japan and hence the demand and marketing shrinking. Up till recently, only big companies have been entering into the Indian market however, considering the shrinking market in Japan, even small and medium companies in Japan are now starting to do business in India. A lot of innovative medium and small companies have global competitive technologies and have shown immense potential to drive Japan’s economic growth in the future.
Spiraea’s services – Japan business in India
This India Japan relationship is set to flourish in the years to come. We at Spiraea strive to take part in such co-operation and provide one roof solution for Japanese companies entering India Market starting from market research, feasibility studies, location analysis, tax-efficient funding structures including repatriation strategies. Spiraea provides consulting services to evaluate market entry options to Japanese investors which include a comparison of different entry options as well as legal structure options basis multiple factors such as cost of formation, ease of formation, transfer of ownership, continuity, regulations, flexibility, capital availability, etc. Spiraea provides incorporation services for setting up of such structure of company, branch, and liaison office in India.
Spiraea has an all-encompassing comprehensive approach that covers every step from setting up a business to adhering to the laws of the land. Post incorporation, book-keeping
Also read: Starting Business in India