Japan’s big entry in semiconductor, green energy and AI, India will benefit tremendously

The economic and strategic partnership between India and Japan is continuously strengthening. From August 2025 till now, more than 120 memoranda of understanding (MoUs) have been signed between the two countries. Under these agreements, Japan will invest more than ₹ 1 trillion (about Rs 1 lakh crore) in India. This investment will be made in many important sectors including semiconductor, Artificial Intelligence (AI), green energy, automobile, steel, digital technology and agriculture.

Many states will benefit

A major part of the investment will come in the form of new projects in different states of the country. Daikin will set up a Research and Development (R&D) center in Haryana, while Sumitomo Corporation will invest in extensive industrial collaboration and renewable energy projects. Fujifilm will start production of semiconductor materials in Gujarat. Suzuki is acquiring land for the new plant. Biogas plant will be set up in Assam with the collaboration of Suzuki R&D, NDDB and NEDF. Apart from this, Toho Koki and IIT Guwahati will jointly develop semiconductor ecosystem.

Special emphasis will be on green energy and new technologies

The main focus of India-Japan partnership will be on green energy and future technologies. Mitsubishi Gas Chemical and ACME will work on the green methanol project, while IHI and ACME will set up a large-scale green ammonia production plant. Apart from this, NTT Data will invest in next generation telecom technology and submarine cable networks.

Mitsubishi Electric and IIT Hyderabad in Hyderabad will jointly develop human resources for AI, quantum technology and security sectors. Yaqumo and IISc will jointly create a quantum technology ecosystem.

Employment and investment will get a boost

In the automobile sector, Toyota will set up a new plant in Bidadi, Karnataka, where 1 lakh vehicles will be produced every year and around 2,800 people will be provided employment. Whereas JFE Steel and JSW Steel will invest in integrated steel project.

Experts believe that this big investment by Japan will give new impetus to manufacturing, high-tech industry, green energy and digital infrastructure in India. Besides, this will create new employment opportunities and help India gain a strong position in the global supply chain.