Japanese Prime Minister Kishida Fumio and Indian Prime Minister Narendra Modi had a noteworthy exchange during the G20 Summit, a forum for world leaders to discuss urgent concerns. Prime Minister Kishida brought up an important issue that has to be addressed while they were in a 20-minute meeting, reiterating Japan’s worry about the business climate for Japanese enterprises in India.

The main topic of debate was India’s investment climate, particularly in relation to Japanese businesses. The Japanese Prime Minister Kishida voiced the concerns of his nation and emphasized the necessity for advancements in this field. He emphasized the significance of improving the business climate in order to achieve an ambitious objective established in March of last year: luring a sizeable amount of public and private investment and financing from Japan to India, amounting to 5 trillion yen.

The continuous improvement in relations between Japan and India over recent years was acknowledged and praised by both leaders. This forward momentum has opened the door to closer collaboration, particularly with regard to India’s investment ecosystem.

The Indian high-speed rail network (V), which is now being built as a showcase project, was similarly praised by the Japanese Prime Minister. This initiative highlights Japan and India’s strong collaboration and their shared commitment to furthering infrastructure development.

It’s important to note that Yoshihide Suga, the former Japanese prime minister, voiced similar worries earlier this year while visiting India. He underlined the value of improving the business climate in India for Japanese enterprises alongside a delegation of Japanese industry leaders. Given the recent trend in the number of Japanese companies operating in India, this has grown to be a matter of major relevance. 

Number of Japanese companies in India

There are less Japanese businesses in India, according to official data from the Japanese government. This trend, from 1,455 in 2020 to 1,400 in 2022, is clearly visible in the decline. Notably, this is the first time a declining trend in this number has been detected. Numerous smaller Japanese businesses have stopped doing business in India, a tendency that has been made worse by the difficulties caused by the COVID-19 outbreak.

Following the meeting, the prime minister tweeted, “Held productive conversations with PM Kishida. We evaluated the bilateral ties between Japan and India as well as the progress made under Japan’s and India’s respective G20 and G7 Presidency. We want to improve collaboration across industries, including commerce and connectivity.

The meeting between Prime Ministers Kishida Fumio and Narendra Modi is evidence of the mutual interests Japan and India have in advancing trade and diplomatic ties. Their conversations at the G20 Summit highlight the crucial part both countries play in determining international relations and the state of the world economy.