Japanese Firms Pivot West: India Emerges as Tech Hub for Global Capability Centres

Japanese corporations are making a strategic westward shift by setting up technology and innovation centres in India. This move is driven by Japan’s aging workforce, escalating domestic costs, and the urgent need for digital modernization. India’s deep talent pool, cost advantages, and thriving innovation ecosystem make it a preferred destination for Japanese firms seeking sustainable growth.

Key Highlights:

• Strategic Expansion: Growing number of Japanese firms investing in India-based GCCs.
• Talent Advantage: India’s skilled engineers and IT professionals help bridge Japan’s talent gap.
• Cost Efficiency: Lower operational costs compared to Japan.
• Sectoral Spread: Automotive, electronics, BFSI, and manufacturing firms leading the GCC adoption.
• Future Outlook: Surveys project significant growth in Japanese GCCs in India by 2028, with many evolving into Centres of Excellence.
• Innovation Focus: Beyond cost savings, firms are leveraging India’s ecosystem for innovation and sustainability initiatives.

This westward pivot underscores India’s rising role as a global technology hub, reshaping the future of Japanese corporate strategy.

Sources: Economic Times GCC, SMEStreet, Business Today