Guwahati: Despite recurring diplomatic engagements and decades-long cultural affinity, Japanese investment in Northeast India remains largely symbolic, with tangible business commitments yet to materialize. During an exclusive interview with Pankhi Sarma of Business North East (BNE), Rajeev Gupta, Chairman of the Indo-Japan Business Council for Northeast India, offered an unvarnished assessment of the current Indo-Japan business landscape in the region, highlighting the gaps, progress, and potential.
Gupta, who has been working at the intersection of Indo-Japan relations and Northeast India’s economic development, confirmed that a high-level Japanese delegation visited Assam from May 3 to May 5, 2025. The delegation, led by the Speaker of the Japanese Diet, included over 30 businessmen representing sectors such as medical equipment, semiconductors, and skill development.
“At this stage, it was more of an exploratory visit to understand the ecosystem, infrastructure, and opportunities in Assam,” Gupta said, noting that no immediate investment commitments were announced.
According to Gupta, the core reason Japanese capital is hesitant to flow into the Northeast lies in two critical deficits: infrastructure and skilled manpower.
“Japan plunges where there is infrastructure and where there is manpower. Both of these are currently under development in the Northeast,” he said.
Gupta pointed to successful Japanese industrial clusters like the automotive park near Chennai, the Neemrana Industrial Park in Haryana, and initiatives in Gujarat, all of which preceded major Japanese investments with robust infrastructure and a skilled workforce tailored to Japanese corporate expectations.
Unlike large conglomerates like Mitsubishi or Panasonic, Gupta explained that the real opportunity lies with Japanese Small and Medium Enterprises (SMEs), a segment that is historically more conservative and risk-averse when entering foreign markets.
“For Japanese SMEs to establish themselves in the region, a comfort zone has to be created. Without adequate infrastructure and cultural-business acclimatization, they won’t move,” he cautioned.
One of the major projects often associated with Japanese interest is the upcoming semiconductor fabrication facility by Tata Group in Jagiroad, Assam.
When asked about Japan’s involvement in the skill development component of this project, Gupta clarified, “I don’t have updated information on a dedicated Japanese-led skilling industry, but I know IIT Guwahati has already launched multiple semiconductor-oriented courses. Japanese participation exists through Tokyo Electron, but broader engagement from Japanese ancillary units is still pending.”
The development of a complete semiconductor ecosystem, Gupta noted, will require not just technical manpower but bilingual and culturally trained talent who can collaborate effectively with Japanese firms.
Gupta emphasized Japan's need for a skilled foreign workforce due to its aging population. He views Northeast India as uniquely positioned to meet this demand.
“Japan has been absorbing skilled youth from Vietnam, the Philippines, Indonesia, and Nepal for the past two decades. Now, India, especially the Northeast, offers a promising supply. Youth from this region can assimilate into Japanese society much faster than those from mainland India.”
He cited language training and cultural orientation as crucial enablers, both of which are being promoted under council-led initiatives.
“We work with youth on becoming ‘Japan-ready’. This includes Japanese language, etiquette, and technical training. Once deployed, each individual can potentially uplift the lives of 16 people through income repatriation, which in turn stimulates rural development.”
Northeast India has hosted multiple international business summits in recent months, including the Advantage Assam 2.0 Summit and Business North East’s own regional summit.
However, Gupta struck a realistic tone by stating, “These summits are necessary to build relationships, but Japan takes time. The process from MoUs to real investment is long because of their diligence and insistence on stable conditions.”
Gupta also differentiated between political goodwill and business action. While political delegations create visibility, Japanese businesses want clarity on logistics, timelines, and operational readiness before committing capital.
When asked whether Northeast startups can compete with their Japanese counterparts, Gupta offered a pragmatic perspective, “Startups here can’t directly compete with Japanese startups in terms of tech sophistication. But collaboration is possible. Japanese startups can find markets here, and local startups can explore Japan for specific solutions.”
He urged local startups to get exposure to Japanese consumer behavior and business operations.
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“Japan is still the world’s third-largest economy. Even though it is not a high-consumption market in terms of modern apps or e-commerce, its industrial and social service needs are vast.”
One major event Gupta highlighted is the World Expo 2025 in Osaka, which he believes is an untapped platform for Northeast entrepreneurs, exporters, and businesses.
“There will be over 90 countries and 30 major country pavilions. We’re facilitating trips for local business communities, not just as tourists but for curated B2B meetings and industry visits.”
He described this as a critical step in what he calls “mindset exposure.”
“It’s not enough to bring Japanese investors here. Our people must go there and see how businesses function, how systems work. That’s how long-term commercial linkages are formed.”
For Japanese investment to flow, Northeast India must first earn its trust, Gupta states. Japan operates on precision, predictability, and patience. It seeks long-term partners, not short-term headlines. Creating a “comfort zone” for Japanese SMEs, through infrastructure, skilling, reliable policy execution, and people-to-people connections, is essential, Gupta added.
With events like the World Expo 2025 in Osaka offering global B2B exposure, the time is ripe to shift gears. As one Council member aptly put it: “If we can get the fundamentals right, the Japanese will come, quietly, slowly, but surely.”
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