India Diversifies FDI Sources; Japan Emerges As Top Contributor Amid Global Turmoil

The investment during the first quarter of 2026-27 exceeded the $3.74 billion India received from Japan during the entire 2025-26 financial year. (AI-Generated Image)

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Asia's economic powerhouse, Japan emerged as India's largest source of foreign direct investment (FDI) in the first quarter of FY27, with $5.71 billion invested between April and June, showing how international companies are reassessing their investment strategies amid geopolitical uncertainty and global economic pressures. According to government data, Japan's investment during the quarter surpassed the $3.74 billion recorded for the entire FY26. The latest inflow also exceeded the $2.48 billion reported in 2025-26, indicating a sharp increase in Japanese capital entering the Indian market.

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Japanese investments accounted for nearly 29 per cent of India's total equity inflows of $19.81 billion during the April-June quarter. The development comes as Japanese businesses explore new markets and diversify their supply chains amid geopolitical tensions, rising production costs and tariff-related risks.

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Meanwhile, Japan’s India connect though goes much beyond just the FDI

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VFS Global’s Founder & CEO, Zubin Karkaria, recently referred to Japan as one of the premium destinations for Indian travellers.

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Original source: https://www.timesnownews.com/business-economy

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