Japanese investors favor India over China for long-term growth: Nomura

Japanese companies and financial institutions invested an estimated $9 billion in India last year, a significant acceleration of interest, particularly in the financial services sector. Takemura noted that while existing investments in China are being maintained, there is limited appetite for new capital deployment there. He expects India to be one of Asia's most important M&A destinations alongside Japan over the next three to five years.

Japanese investors are showing strong interest in India's infrastructure, which now encompasses data centers, logistics, renewable energy, and transmission assets. Financial services and real estate are also key areas of focus. Large Japanese pension funds, such as GPIF, are increasingly investing in global infrastructure funds that are deploying capital into markets like India.

The energy transition in India presents a significant opportunity, with ample space for solar and renewable projects, and a growing need for battery storage solutions. However, challenges remain for Indian pharmaceutical companies looking to enter the Japanese market due to Japan's stringent healthcare regulations and pharmaceutical pricing policies.