Japanese automakers are accelerating investment in the Indian market, but reports indicate that their dependence on Chinese companies for parts supplies remains difficult to reduce.
Competition between Japanese and Chinese automakers is intensifying in the Indian market. According to Ministry of Commerce data, passenger vehicle imports totaled 45,465 units in fiscal 2025, up 129% year on year, with China the largest source, accounting for approximately 22.1% of imports.
Toyota Motor Corporation announced plans to invest approximately $1.8 billion to build 3 new vehicle assembly plants in Maharashtra, while Suzuki, which holds approximately 40% of the local market, is set to commence operations at a new plant operated by its subsidiary and position it as a base for the transition to electric vehicles.
Reuters reported that Japan's foreign direct investment in India's transportation sector increased more than sevenfold over the 3 years from 2021 to 2024 and reached approximately $2 billion in 2025.
Some observers have said that supplies of parts from Chinese companies are indispensable. Chen Yan (陳言), executive director of a research institute of Japanese companies, said that interest in India does not mean decoupling from China, and pointed to the growing use of Chinese-made parts and the importance of China's supply chain. Local data also showed that China accounts for 36% of India's auto parts imports.