Relations between India and Japan have strengthened significantly in the last few months. If we talk economically, many Japanese companies have invested in India. According to the report, Japan has emerged as the largest source of foreign direct investment (FDI) in India in the first quarter (April-June) of the current financial year 2026-27. According to government data, during this period, investment from Japan came in at $5.71 billion, higher than the $3.74 billion that came in the entire fiscal year 2025-26. In FY 2025-26, investment from Japan to India was $2.48 billion.

7 lakh crore investment target

According to the data, Japan accounted for about 29 percent of the total equity investment received by India at $19.81 billion in the first quarter of the current fiscal year. Japan has set a target of investing 10 lakh crore yen (about seven lakh crore rupees) in India by 2025 over a period of more than a decade. Commerce and Industry Minister Piyush Goyal visited Japan last month to strengthen trade and investment ties between the two countries. In Nagoya, he said that Japanese companies have so far invested Rs. 1 lakh crore has been invested.

What do the experts say?

Anil Talreja, partner, Deloitte India, said that Japanese institutional investors are now becoming more active in India and the participation of Japanese financial institutions is increasing. He said Japanese companies are diversifying their supply chains and reviewing reliance on certain sectors due to geopolitical tensions, slower economic growth, rising labor and production costs, and tariff risks. Rudra Kumar Pandey, equity partner at Shardul Amarchand Mangaldas & Co, also said that Japan becoming the largest investor in the first quarter shows its strong confidence in India. He said the investment data was driven by large strategic deals, while expansion plans by Japanese companies showed long-term opportunities in manufacturing, financial services and technology.

America and Singapore also lag behind

US foreign direct investment (FDI) equity inflows to India fell 76% to $1.34 billion during the first quarter of fiscal year 2027 (April-June 2026), from $5.61 billion in the same period last year. On the other hand, Singapore ranked second in terms of foreign direct investment (FDI) equity inflows to India in the first quarter of FY 2027 (April-June 2026). It recorded investments of $5.22 billion (about $5.2 billion according to DPIIT data).