In a significant strategic shift, cash-rich Japanese corporations are turning their focus westward, accelerating the establishment and expansion of technology centres in India. This move is driven by a critical need to access a deep talent pool, countering domestic challenges like an ageing population and a shrinking pipeline of tech professionals, coupled with growing discomfort with China as a high-risk destination for intellectual property.
Major Japanese Players Bet on Indian Talent
At least three major Japanese conglomerates are actively advancing their India tech hub plans. Mitsubishi UFJ Financial Group (MUFG), one of Japan's largest private lenders, is in discussions with Indian IT services firms, including Tech Mahindra, for hiring support to staff its two technology centres in Bengaluru. These centres handle back-end IT functions and develop enterprise solutions.
"They are mainly having talent requirements for Linux, .NET, and Java roles, apart from other AI and cybersecurity requirements," revealed a source familiar with the developments. MUFG reported a robust net interest income of $20.8 billion last fiscal year, marking a 12% increase.
On the manufacturing front, Daicel Corp.-owned Polyplastics is evaluating plans to open a technology centre in Chennai. The company, which already has a manufacturing plant in the city producing automotive plastic components, is expected to hire around 200 engineers and IT professionals.
Meanwhile, Nidec Corp., the global electric motor manufacturer based in Kyoto, has been steadily building its Indian footprint. Following the opening of a research and development centre in Bengaluru in September 2024, the company invested $55 million in a manufacturing campus in Hubli–Dharwad, Karnataka, in November last year.
Structural Shifts Drive the 'Look West' Strategy
Analysts see this trend as part of a larger, structural realignment. "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," explained Peter Bendor-Samuel, founder of Everest Group. He added that the unattractiveness of China, viewed as a strategic threat and high-risk for IP loss, further accentuates this shift.
This focus on tech centres follows a wave of Japanese financial investments in India during 2025. Groups including MUFG, Sumitomo Mitsui Banking Corp., and Mizuho Financial Group collectively invested over $7.2 billion in Indian financial services firms like Shriram Finance, Yes Bank, and Avendus Group. Official data confirms Japan is now the fifth-largest source of foreign direct investment into India.
Opportunity for High-Value Work and Leadership
The nature of work moving to these India-based centres is evolving beyond traditional IT support. According to Phil Fersht, CEO of HFS Research, the opportunity lies in higher-value domains such as core platform engineering, AI-enabled manufacturing systems, financial services technology, digital twins, and data-driven operations.
"Over time, this can translate into deeper product ownership, stronger IP creation, and long-term leadership roles for Indian talent within Japanese global organizations," Fersht noted. The competition for talent is already intense, with Japanese firms reportedly offering salary packages exceeding ₹20 lakh to graduates from Indian engineering colleges.
This influx aligns with the explosive growth of Global Capability Centres (GCCs) in India. Industry body Nasscom reports the country now hosts over 1,760 GCCs, with Bengaluru leading at 875 and Hyderabad at 355. These centres generate at least $64.6 billion in export revenue, a figure projected to rise to $105 billion by March 2030 with an estimated 2,200 centres.
The expansion by Japanese firms into India's tech landscape signifies a durable partnership, moving beyond capital investment to deep-rooted collaboration in innovation and technology development.
