Outside India Asia-Pacific and Indian Ocean
From Japan
Japan is the fifth-largest source of foreign direct investment into India, USD 48,141 million from April 2000 to March 2026, with automobiles, electrical equipment, telecommunications, chemicals, insurance and pharmaceuticals among the sectors the Ministry of External Affairs names. A Japanese investor has no separate investment treaty: protection sits in Chapter 8 of the India-Japan Comprehensive Economic Partnership Agreement, in effect from 1 August 2011, and tax in the convention as amended by the Protocol of 2015. This page sets out those agreements, the questions a Japanese business or one of the 65,126 non-resident Indians in Japan asks first, and the practical facts of working between Tokyo and India.
At a glance
- Investment into India
- USD 48,141 million
- Fifth-largest source of cumulative foreign direct investment into India, April 2000 to March 2026: USD 48,141 million, 6.11 per cent.
- Equity inflow in the financial year 2025-26: USD 3,745 million.
- Source 1
- Indians living there
- 65,126
- 65,126 non-resident Indians live there.
- Overseas Indians in all, non-resident Indians and persons of Indian origin together: 66,887.
- Source 2
- Investment treaty
- In force
- India-Japan Comprehensive Economic Partnership Agreement (trade; investment in Chapter 8). Signed 16 February 2011; in effect from 1 August 2011. The register of the Department of Economic Affairs lists no separate India-Japan bilateral investment treaty.
- Source 3, 4, 5
- Double taxation agreement
- In force
- India-Japan Convention for the Avoidance of Double Taxation. Amended by the Protocol signed 11 December 2015, which entered into force on 29 October 2016.
- Source 6
India and Japan: the legal framework
Investment and trade sit in one agreement, the India-Japan Comprehensive Economic Partnership Agreement of 2011; tax and social security each have their own.
| Area | Agreement | Status | What the source records | Source |
|---|---|---|---|---|
| Trade and investment | India-Japan Comprehensive Economic Partnership Agreement (trade; investment in Chapter 8) Its page in Law | In force | Signed 16 February 2011; in effect from 1 August 2011. The register of the Department of Economic Affairs lists no separate India-Japan bilateral investment treaty. | 3, 4, 5 |
| Double taxation | India-Japan Convention for the Avoidance of Double Taxation Its page in Law | In force | Amended by the Protocol signed 11 December 2015, which entered into force on 29 October 2016. | 6 |
| Social security | India-Japan Agreement on Social Security | In force | Signed 16 November 2012; in force from 1 October 2016. Contributions are paid in the home country for a posting of up to 60 months. | 7 |
| Documents: the Apostille Convention | Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, 1961 | Applies | The status table lists Japan among the contracting States. | 8 |
Where Japan invests in India
The Ministry of External Affairs brief on India and Japan lists these sectors for Japanese investment in India, April 2000 to March 2026. 10
- Automobile
- Electrical equipment
- Telecommunications
- Chemical
- Financial (insurance)
- Pharmaceutical
- About 1,500 Japanese companies are registered in India, manufacturing firms accounting for half of them. 11
Sector pages on this site
- Manufacturing
Named in the brief: Automobile; Electrical equipment; Chemical
Legal work for manufacturers and the trade that moves their output: incentive schemes and industrial licensing, technology transfer and IP, supply chain and carrier contracts, export control and customs.
- Technology and services
Named in the brief: Telecommunications
Legal work for technology, platform and service businesses: data protection under the DPDP Act, intermediary liability, content and IP licensing, platform regulation, and the licensing and governance regimes that apply to media, education, hospitality and the creative economy.
- Financial services
Named in the brief: Financial (insurance)
Legal work for lenders, listed companies, funds and financial technology businesses: SARFAESI and DRT enforcement, insolvency, SEBI proceedings, AIF and FEMA compliance, and the RBI licensing regimes that govern payments and digital lending.
- Healthcare and pharma
Named in the brief: Pharmaceutical
Legal work for hospitals, pharmaceutical and device manufacturers, and life sciences enterprises: medical negligence proceedings, CDSCO and drug regulatory compliance, NPPA price control, clinical trial regulation, and restructuring where intellectual property is the principal asset.
Where the two countries are working together
The Ministry of External Affairs brief on India and Japan, June 2026, names among the fields of cooperation semiconductors, critical minerals and clean energy. 12
Questions from Japan
A business from Japan
What protects a Japanese investment in India?
The India-Japan Comprehensive Economic Partnership Agreement of 2011 has its own investment chapter, Chapter 8, with national and most-favoured-nation treatment, the customary minimum standard, protection against uncompensated expropriation, free transfers, and arbitration after six months of consultation and within three years of knowing of the loss.
The register of the Department of Economic Affairs lists no separate India-Japan bilateral investment treaty.
How much tax does India take on dividends, interest and royalties paid to Japan?
Taxation sits outside the partnership agreement: the India-Japan tax convention, as amended in 2006 and 2015, caps source-state tax on dividends, interest and royalties at 10 per cent of the gross amount for a beneficial owner.
Can a company incorporated in Japan invest in an Indian company without approval?
The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 set the routes and the conditions on which a person resident outside India may acquire equity instruments of an Indian company.
They allow it without prior approval where the sector is on the automatic route and the sectoral cap is not crossed, at a price not below fair value, with Form FC-GPR (Foreign Currency-Gross Provisional Return) filed with the Reserve Bank of India within thirty days of issue, as the note on a United States company sets out.
What do the Labour Codes require of a factory in India?
From 21 November 2025 a factory, mine or plantation that averaged 300 or more workers a day over the preceding twelve months needs the appropriate Government’s prior permission to lay off, retrench or close, and a retrenchment there needs three months’ notice.
Gratuity on fixed-term staff now accrues at one year instead of five.
What does India require of a semiconductor investor or tool supplier?
Semicon 2.0, notified on 31 August 2026, supports a silicon wafer fab at 40 per cent of eligible capital expenditure, and the applicant must already show capital investment of INR 20,000 crore, revenue of INR 7,500 crore in one of the three financial years before it applies, and production grade technology it owns or licenses.
A supplier that exports, re-exports or sends for repair the advanced chip manufacturing tools on India’s export control list needs an authorisation from the Directorate General of Foreign Trade first.
Which manufacturing standard binds a drug maker in India?
Every manufacturer licensed under rule 74, 76 or 78 of the Drugs Rules, 1945 has been bound by the revised Schedule M since 31 December 2025 at the latest, the last date any instrument the note found gives.
Indians living in Japan
The Ministry of External Affairs brief on India and Japan, June 2026, records information technology professionals and engineers among the Indians living in Japan, and Indian jewellery merchants from Gujarat and Maharashtra in cities such as Kobe. 12
When is an Indian citizen living in Japan resident in India for tax?
Under section 6 of the Income-tax Act, 2025, on 182 days or more in India in a tax year, or on 60 days plus 365 days in the four years before; a citizen visiting from abroad is outside the 60-day test unless income other than from foreign sources exceeds INR 15 lakh, when the test runs at 120 days.
A citizen with such income above INR 15 lakh who is liable to tax in no other country is deemed resident, but only as a person not ordinarily resident.
Selling a flat in India while living in Japan: the tax and the money
For a sale in the tax year that began on 1 April 2026, the buyer withholds tax under section 393(2) of the Income-tax Act, 2025, and a non-resident’s long-term gain on a flat is taxed at 12.5 per cent under section 197.
Remitting a Non-Resident (Ordinary) Rupee account balance is limited to USD 1 million a financial year without the Reserve Bank of India’s prior approval.
Can a family member living abroad inherit property in India?
Under section 6(5) of the Foreign Exchange Management Act, 1999 and rule 24(c) of the Non-debt Instruments Rules, a non-resident Indian or an overseas citizen of India may inherit any immovable property in India, agricultural land included.
An authorised dealer bank may remit inherited assets and their sale proceeds abroad up to USD 1 million a financial year; whether probate or a succession certificate is also needed turns on the asset.
Signing a power of attorney in Japan for property in India
Two routes lead to a document Indian authorities will take: signature before an Indian consular officer, or signature before a foreign notary followed by an apostille under the Hague Convention of 1961.
The status table of the Hague Conference lists Japan among the contracting States.
What may an Overseas Citizen of India cardholder do in India?
An OCI cardholder is a foreign national with a lifelong multiple-entry visa and parity with a non-resident Indian on buying and selling immovable property other than agricultural land, a farm house or plantation property.
Four heads of activity need special permission, and the registration can be cancelled under section 7D of the Citizenship Act, 1955.
Practice areas and counsel for this corridor
Practice areas
- Transaction advisory
Structuring, documentation and due diligence for acquisitions, joint ventures and restructuring transactions under Indian law.
- Contracts and procurement
Drafting, review and negotiation of commercial contracts and procurement documentation across the supply chain.
- Employment
Advisory and representation on employment disputes, disciplinary process, industrial relations and labour code compliance.
- Taxation and fiscal
Advisory and litigation on goods and services tax, direct tax and indirect tax disputes before departmental and appellate forums.
Advocates who write the notes on Japan
Working across the border
The practice advises on Indian law. Where a matter turns on the law of another country it is referred to counsel qualified there, and the advice states which part rests on that referral.
Time difference
India Standard Time is five hours and thirty minutes ahead of UTC throughout the year.
- Tokyo is three hours and thirty minutes ahead of Bengaluru.
- India and Japan do not observe daylight saving time, so the difference holds all year.
Instructions are taken between 07:00 and 21:00 India Standard Time (IST), Monday to Friday, as the offices page states. In Tokyo that is 10:30 to 00:30 the next day.
Documents signed there
India is a party to the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, 1961, so a public document from another contracting State that carries an apostille issued by the competent authority there is accepted in India without further legalisation. The status table of the Hague Conference lists Japan among the contracting States.
Offices
- Bengaluru
7th Floor, Raheja Towers, East Wing, 26/27 Mahatma Gandhi Road, Craig Park Layout, Ashok Nagar, Bengaluru, Karnataka 560001
+91 76765 68787
- Mumbai
Unit No. 4, 3rd Floor, Inspire BKC, Village Kolekalyan, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051
- New Delhi
L29 to L34, First Floor, Connaught Place, New Delhi, Delhi 110001
Notes for readers there
Notes on Japan
From the region: Asia-Pacific and Indian Ocean
Sources
- Official pageDepartment for Promotion of Industry and Internal Trade: Quarterly Fact Sheet on Foreign Direct Investment inflow, April 2000 to March 2026dpiit.gov.in
- Official pageMinistry of External Affairs: Population of Overseas Indians, January 2026mea.gov.in
- Official pageMinistry of External Affairs, India-Japan Bilateral Brief, para 17 (CEPA covers investments; in effect 1 August 2011) (mea.gov.in)mea.gov.in
- Official pageMinistry of External Affairs, Indian Treaties Database (signature 16/02/2011) and India-Japan Bilateral Brief para 17 (in effect 1 August 2011)mea.gov.in
- Official pageDepartment of Economic Affairs, Register of Bilateral Investment Treaties/Agreements, pages 0 to 9 (dea.gov.in); no Japan entrydea.gov.in
- Official pageMinistry of External Affairs, Indian Treaties Database, Protocol of 11/12/2015 (entry into force 29/10/2016)mea.gov.in
- Official pageMinistry of External Affairs, Indian Treaties Database (signature 16/11/2012) and EPFO International Workers, Japan card (in force 1 October 2016)epfo.gov.in
- ConventionHague Conference on Private International Law: status table of the Apostille Convention, 1961hcch.net
- Official pageMinistry of External Affairs: Attestation and Apostillemea.gov.in
- Official pageMinistry of External Affairs, India-Japan Bilateral Brief, para 21mea.gov.in
- Official pageMinistry of External Affairs, India-Japan Bilateral Brief, para 22mea.gov.in
- Official pageMinistry of External Affairs, India-Japan bilateral brief, June 2026mea.gov.in
Limits of this page
Nothing on this page is advice, and nothing on it is a statement that any provision applies to a particular set of facts. It is not an offer of engagement. Reading it creates no advocate-client relationship.
Each agreement is stated as its official source records it: a status only where the source states it, and an agreement no verified source records is left out rather than guessed. Each answer on this page restates a note, a law page or a practice page on this site, which carries the detail and its sources.