India seeks Japanese capital for technology & manufacturing growth

India seeks Japanese capital for technology & manufacturing growth

The meeting brought together senior representatives of Mitsubishi UFJ Financial Group (MUFG), Development Bank of Japan (DBJ), Mizuho, Morgan Stanley, Nomura and Nippon Life. Discussions focused on India's economic outlook, emerging investment opportunities and steps to facilitate greater Japanese institutional investment into India, the Ministry of Commerce & Industry said in a press release.

The minister highlighted the resilience of the Indian economy, saying India recorded 7.7 per cent growth last year despite global uncertainties and is working towards becoming a $30 trillion economy by 2047.

He cited the strength of India's banking sector, robust capital adequacy, low levels of non-performing assets, an expanding middle class and rising disposable incomes as drivers of sustained growth.

Goyal highlighted opportunities for Japanese investors in semiconductors, artificial intelligence, data centres, renewable energy, green hydrogen, advanced manufacturing and digital infrastructure.

He also said India's expanding renewable energy capacity and national power grid provide a foundation for energy-intensive digital industries, while the India Semiconductor Mission is creating opportunities across manufacturing and technology.

The minister added India regards Japan as a trusted partner in its journey towards becoming a global manufacturing, technology and investment hub. He also emphasised India's commitment to intellectual property protection, availability of high-quality talent, policy reforms and a more conducive business environment.

The Japanese institutions outlined their growing engagement with India and confidence in the country's long-term growth prospects. MUFG highlighted its investment of around $4 billion in Shriram Finance and its expanding interests in renewable energy and hydrogen, while DBJ outlined its dedicated India strategy and interest in property development, venture capital and other long-term investment opportunities.

Mizuho highlighted improving profitability for Japanese companies operating in India and the expansion of its India operations, including its Global Capability Centre in Pune. Morgan Stanley described India as one of its most important global locations, with more than 19,000 employees, and said its India operations were moving towards higher-value capital markets and financial services activities.

Nomura highlighted its long-standing presence in India and its role in connecting Japanese companies and global industries with Indian opportunities, including technology capabilities in artificial intelligence and cybersecurity. Nippon Life emphasised the importance of long-term patient capital and noted strong returns from its Indian operations.

The discussions also covered ways to improve the flow of Japanese institutional capital into India. Participants highlighted the importance of simplifying processes for profit repatriation, improving access to Indian capital markets and ensuring greater regulatory predictability for long-term investors.

The Japanese institutions reiterated that their long-term strategic outlook on India remains strongly positive, while noting that currency movements and certain regulatory and policy considerations can influence short-term investment decisions. He welcomed the feedback and reiterated the Indian government's commitment to improving ease of doing business and creating a more seamless investment environment.

The meeting also explored the potential of GIFT City as a gateway for international capital into India and as a platform to facilitate greater cross-border investment flows between Japan and India. Goyal said India is seeking not only capital but long-term partnerships that bring technology, innovation, manufacturing capabilities, employment and integration with global value chains, including in new and emerging sectors and established businesses requiring modernisation and technological upgrading.

The discussions assume significance in the context of the India-Japan objective of mobilising 10 trillion yen (~$62.84 billion) of Japanese private investment into India over the next decade.

The interaction reaffirmed the confidence of leading Japanese financial institutions in India's long-term growth prospects and highlighted the potential to expand bilateral investment, technology and business linkages, added the release.