Rising sun looks west: After buyouts, Japan Inc. next looks to double down on India tech centres
Cash-rich Japanese companies grapple with an ageing population, shrinking talent pipeline and a growing discomfort with China which is seen as a high-risk geography for intellectual property.
After Japanese investments into India hit a high last year, some of the largest companies of the East Asian country are now looking to expand or establish tech centres to tap India’s deep talent pool.
At least three major Japanese groups—Mitsubishi UFJ Financial Group (MUFG), Nidec Corp and Daicel-owned Polyplastics—are in various stages of setting up or expanding technology centres in India, according to two people with knowledge of the matter.
This signals India's rising appeal as a tech offshoring hub as cash-rich Japanese companies grapple with an ageing population and shrinking talent pipeline. This also comes amid growing discomfort with China as a high-risk geography for intellectual property.
The focus follows a spate of large Japanese financial investments in 2025. Groups including MUFG, Sumitomo Mitsui Banking Corp. and Mizuho Financial Group have collectively invested more than $7.2 billion in Indian financial services firms such as Shriram Finance, Yes Bank and Avendus Group, respectively.
Mint reported on 23 December, quoting official data, that Japan is now the fifth-largest source of foreign direct investment into India.
MUFG, which is one of Japan’s largest private lenders, is in discussions with multiple tech and consultancy firms, including ANSR, to ramp up hiring in various data analysis and Java software roles, according to job listings on ANSR, which sets up GCCs for large multinational companies.
The company has more than 150 openings in roles, including data analysis, cloud security, and client management services across its Mumbai and Bengaluru locations.
“MUFG has established its Global Capability Centre (GCC) in India, with locations in Bengaluru and Mumbai. The Bengaluru office primarily encompasses our IT capabilities. Since its inception, the entity has expanded to a workforce of 2000 employees, with technology being a key driver of this growth," said MUFG’s official spokesperson, in response to Mint’s questions.
MUFG ended last fiscal year with a net interest income of $20.8 billion, up 12% from the year-ago period.
Manufacturing conglomerates are making similar moves. Daicel Corp.-owned Polyplastics is evaluating plans to open a technology centre in Chennai, according to the second person. The company is in talks with service providers and is expected to hire around 200 engineers and back-end IT professionals, though a formal hiring target has not been disclosed.
Polyplastics already operates a manufacturing facility in Chennai, producing decorative plastic components such as car emblems, wheel covers and radiator grilles. Daicel ended last fiscal year with about $3.87 billion, up 0.3% on year.
Meanwhile, Kyoto-based Nidec Corp., a global manufacturer of electric motors, has been steadily expanding its presence in India. In November last year, it invested $55 million in a manufacturing campus in Hubli–Dharwad, Karnataka, following the opening of a research and development centre in Bengaluru in September 2024.
Nidec ended last fiscal year with $17.2 billion in revenue, an 11% increase year-on-year.
Emails sent to Daicel were not answered till press time.
Looking West
Analysts expect Japanese investments in India-based tech centres to accelerate. “There are several structural factors which are driving Japanese firms to increase their investments in India-based tech centres. Declining birth rate and corresponding reduction in available tech talent are forcing Japanese firms to either import talent through immigration or look to offshore locations such as India to source this talent," said Peter Bendor-Samuel, founder of Everest Group.
“This is further accentuated by the increasingly unattractiveness of China, which has emerged as a strategic threat and often is viewed as high risk from an intellectual property loss."
Japanese interest in Indian tech talent has been building for some time. Mint reported on 7 October 2024 that Japanese firms were offering salary packages exceeding ₹20 lakh to graduates from Indian engineering colleges.
The opportunity lies in higher-value work such as core platform engineering, AI-enabled manufacturing systems, financial services technology, digital twins, and data-driven operations, said Phil Fersht, chief executive of HFS Research. "Over time, this can translate into deeper product ownership, stronger IP creation, and long-term leadership roles for Indian talent within Japanese global organizations."
According to industry body Nasscom, India currently hosts over 1,760 global capability centres (GCCs), with Bengaluru and Hyderabad hosting 875 and 355 centres. GCCs generate at least $64.6 billion in export revenue, and Nasscom estimates the number will rise to 2,200 by March 2030, with the market valued at $105 billion.
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