Japan's top financial firms told Goyal that currency moves and repatriation friction can slow new investment toward India's 10 trillion yen target.
India's commerce minister Piyush Goyal met Tuesday in Tokyo with the leaders of six Japanese financial institutions, making the case for faster deployment of Japanese capital toward a 10 trillion yen target for private investment in India over the next decade.
The meeting brought together MUFG, Development Bank of Japan, Mizuho, Morgan Stanley, Nomura and Nippon Life. Goyal opened with India's growth record: 7.7% expansion last year despite global uncertainties, and a government projection of a $30 trillion economy by 2047, roughly eight times current GDP. He described Japan as a trusted partner in India's push to become a global manufacturing, technology and investment hub.
At current exchange rates, 10 trillion yen is roughly $67 billion, or about $6.7 billion a year if deployed evenly across the decade. The sectors Goyal pointed to are capital-hungry and slow to mature: semiconductors, artificial intelligence, data centres, renewable energy, green hydrogen, advanced manufacturing and digital infrastructure.
Goyal said India's expanding renewable energy capacity and national power grid provide the foundation for energy-intensive digital industries, a category that includes data centres and AI infrastructure. He cited the India Semiconductor Mission as the opening in manufacturing and technology. Japan already supplies a large share of the world's semiconductor materials and equipment, and India's chip mission targets fabrication and packaging capacity. He also pointed to India's intellectual property protections and policy reforms, and to the availability of high-quality talent, as reasons for Japanese companies to expand there. On banking, he cited strong capital adequacy, low non-performing assets, an expanding middle class and rising disposable incomes as drivers of sustained growth.
The institutions came with their own numbers. MUFG, Japan's largest banking group, said it invested around $4 billion in Shriram Finance, one of India's largest non-bank lenders, and is expanding into renewable energy and hydrogen. DBJ, Japan's state-backed development bank, said it runs a dedicated India strategy, including growing interest in property development and venture capital.
Japanese companies operating in India are seeing improving profitability, Mizuho said, and the bank is expanding its India operations, including a Global Capability Centre in Pune that houses technology and operations work. Morgan Stanley told the meeting that India is one of its most important global locations, with more than 19,000 employees, and that its India business is shifting toward higher-value capital markets and financial services work.
Nomura, which has a long-standing presence in India, said it connects Japanese companies with Indian opportunities, including technology capabilities in artificial intelligence and cybersecurity. Nippon Life, one of Japan's largest insurers, said long-term "patient capital" matters, and its Indian operations have generated strong returns. Insurance and pension capital of this sort is built to sit through currency swings and regulatory cycles. The institutions said their engagement with India is growing and expressed strong confidence in the country's long-term prospects.
On AlphaScala's proprietary model, MUFG carries an Alpha Score of 57/100, labelled Moderate, and Morgan Stanley scores 61/100, also Moderate.
The discussions turned to what slows Japanese institutional capital. Participants said simplifying profit repatriation and improving access to Indian capital markets would help. They also called for greater regulatory predictability, meaning stable rules that let long-term investors plan across decades. The institutions said currency movements and certain regulatory and policy considerations can influence short-term investment decisions, even though their long-term outlook on India remains strongly positive.
Profit repatriation is the process of converting rupee earnings and moving them out of the country. For Japanese institutions, the realised return on an Indian asset is set at the point of exit, when those earnings convert back into yen. A weaker rupee at that moment reduces the yen value of the investment.
Hedging adds a cost. Japanese institutions that buy protection on rupee exposure pay a price tied to the interest rate gap between India and Japan, which trims the net return before the currency even moves. Indian rates sit above Japanese rates, so the forward market prices the rupee at a discount to the yen. Protection isn't free.
Japanese capital entering India converts yen into rupees at entry; repatriation converts rupees back at exit. The friction the institutions named sets the pace of that two-way flow. Deployment at the target pace would add a persistent yen-to-rupee conversion stream to the market over the next decade. The Reserve Bank of India runs a managed float for the rupee, smoothing sharp moves.
The meeting also covered GIFT City, the Gujarat-based finance hub, as a gateway for international capital into India and a platform for cross-border investment flows between Japan and India. GIFT City operates as India's international financial services centre, regulated by the International Financial Services Centres Authority, a separate body from India's domestic market regulators. The hub already hosts branches of major international banks and funds, and is designed as a lower-friction route for cross-border capital.
Goyal said India is seeking long-term partnerships that bring technology, innovation, manufacturing capabilities, employment and integration with global value chains, not just capital. Opportunities exist in new and emerging sectors and in established businesses that need modernisation, he said. He welcomed the feedback and said the government is committed to improving ease of doing business and creating a more seamless investment environment.
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