India Overtakes China in Japanese Investment Post-COVID

Japanese companies are increasing investments in India post-COVID by adopting a 'China Plus One' strategy. They are leveraging India's large market and competitive labor costs, shifting some production from China to India. Interest in India's startup ecosystem and M&A activities is also growing among Japanese firms.

In the aftermath of the COVID-19 pandemic, Japanese companies are increasingly considering India as a vital part of their global manufacturing strategy. This shift is driven by the 'China Plus One' policy aimed at reducing dependency on China, according to Deloitte experts.

India is emerging as a strategic hub for Japanese businesses, not just for its substantial domestic market but also as a gateway to high-growth regions like the Middle East and Africa. Deloitte Japan's CEO Kenichi Kimura emphasized India's critical role in global supply chains, with the nation surpassing China in Japanese foreign direct investment (FDI) inflows for the first time.

Furthermore, the burgeoning Indian startup ecosystem presents lucrative opportunities for collaboration. Japanese firms are increasingly investing in Indian startups, especially in sectors like deep tech and digital solutions, to drive innovation and market expansion.

(With inputs from agencies.)