Japanese manufacturers are moving to the Indian market. Particularly, makers of factory automation and manufacturing equipment are making inroads to India.    

In 2022, amid the higher investment risk posed by China, companies shifted their production bases from China to India. This trend was notable at the recent productronica India 2022, a trade fair of manufacturing equipment, held in Delhi in Sept. At the show, Japanese manufacturers showcased their products and technologies.

Make in India Policy

To attract investors, the Indian government laid down the “Make in India” policy. The policy also aims to promote its domestic manufacturing industry.  

In 2022, India set forth a comprehensive policy program to attract and nurture semiconductor and display manufacturers.  With a total budget of 760 billion rupees, the Indian government propelled the largest industry promotion measures. The program aims to attract semiconductor and display makers to set up their factories in India. Moreover, it aims to attract compound semiconductors and semiconductor packages, advanced chemistry cells (ACC), and communication network companies, and nurture these industries. 

Furthermore, the Indian government plans to invest 260 billion rupees in five years from 2022 to elevate the electric vehicle (EV) industry. 

According to Japan External Trade Organization (JETRO), to date, about 1,500 Japanese companies from all industry sectors have made inroads into India. Specifically, manufacturers related to the automotive industry account for about 50 percent of the total.

Holding Indian Bases

Japanese FA and manufacturing equipment makers also have interests in investing in India. Thus, they started to set up their plants in the country. 

Mitsubishi Electric Corporation has invested about 3.1 billion yen (US$24.2 million) to build a new factory in Pune, Maharashtra. The new plant has a total floor area of about 15,000sq.m and the lot measures about 40,000sq.m. The new plant will produce FA control system products with inverters as its main products. The plant is slated to start operation in Dec. 2023. 

Among FA equipment manufacturers, FUJI Electric Co., Ltd., Yaskawa Electric Corp. NSK Ltd., and THK Co., Ltd. have already been deploying production activities in India.

In terms of electronic manufacturing services (EMS) providers, Rexxam Co., Ltd. and Katolec Corporation have been operating in India.

On the other hand, mounting equipment makers, FUJI Corporation and Yamaha Motor Co., Ltd. have embarked on the expansion of their businesses in India. Specifically, FUJI established FUJI INDIA in Gurugram, Haryana as subsidiary in Mar. 2020. Meanwhile, JUKI Corporation has built a demonstration center next to a sales base in Bengaluru. The company has already been operating business in Mumbai and Delhi using the existing base of its sewing machine business.