Japan Inc is betting big on India as China risks deepen

What the report says

Japan’s corporate sector is expanding its footprint in India as domestic demand at home weakens and risks tied to China increase, according to BBC World News. The report says Japanese firms are increasing investment across retail, banking, manufacturing support services and other sectors, with visible growth from brands such as Uniqlo, Muji and Onitsuka Tiger in major Indian cities.

The article highlights several large transactions and plans. MUFG Bank bought a 20% stake in Indian shadow lender Shriram Finance last year, while Sumitomo Mitsui Banking Corporation became the largest shareholder in Yes Bank. It also notes that more than 100 Japanese companies now operate global capability centres in India, and that Japanese firms announced about $12.5bn in investments through roughly 120 agreements during Prime Minister Sanae Takaichi’s visit to New Delhi in July, covering areas such as semiconductors and green energy.

BBC World News frames India as a natural growth market for Japan because of Japan’s aging and shrinking population, tighter conditions in China and weaker prospects in some other overseas markets. Analysts quoted in the piece say Indian expansion is partly a way to reduce concentration risk rather than a complete pullback from China. The story also places the trend in a broader context of closer Japan-India ties since the 2010s, including large infrastructure cooperation such as the Mumbai-Ahmedabad bullet train project.

The report adds that India still faces longstanding hurdles for foreign investors, including regulatory delays and bureaucratic complexity, which could affect how quickly Japanese capital continues to grow.