Japan Targets $100-$400 Million Investment In India's EV Sector To Counter China's Supply Chain Dominance

Japan is positioning itself for substantial investments ranging from $100 million to $400 million (₹860-3,500 crore) in India's electric vehicle (EV), battery manufacturing, and recycling industries, according to multiple sources familiar with recent trade negotiations, as reported by The Hindu Business Line.

The investment represents Tokyo's broader strategic effort to reduce China's control over global lithium-ion battery supply chains, critical mineral extraction, and rare earth magnet production -- all key components driving the global transition to clean technology and EVs.

Also read: India's Auto Sector Faces Severe Rare Earth Supply Crisis Beyond Current Estimates: CII President

Partnership Targets Supply Chain Diversification

Trade representatives and investment agencies from Japan have been actively identifying potential Indian partners across multiple sectors including EV manufacturing, battery cell production, mineral processing, and recycling operations. Discussions have included funding, with Japanese private equity firms participating in the evaluation process.

The likely capital deployment could support joint venture (JV) formations, technology transfer agreements, and establishment of new processing facilities, potentially establishing India as a key component in Asia's diversified supply chain network.

Quad Nations Express Supply Chain Concerns

The investment discussions align with recent statements from the Quad alliance, which expressed being "deeply concerned" about the "abrupt constriction and future reliability of key supply chains, specifically for critical minerals."

During negotiations, one Japanese corporation indicated interest in partnerships focused on catalytic converter recycling, which would provide access to platinum and palladium resources. Platinum serves as a critical component in hydrogen fuel cells used in Evs.

Cross-Border Corporate Participation

Recent diplomatic and business meetings spanning 48 hours have brought together senior Japanese government representatives, executives from major battery manufacturers, automobile companies, and private equity firms with India's largest conglomerates, EV producers, battery manufacturers, and recycling specialists.

The meetings, hosted at the Japanese Embassy, included nearly 70 companies from both nations, with participation from key Indian Ministry officials and representatives from ARCI -- International Advanced Research Centre for Powder Metallurgy and New Materials.

Key Corporate Players Engaged

Indian participants included prominent names such as Maruti Suzuki, Tata Group, Honda, along with battery manufacturers and recycling companies like Attero and Lohum. Tata Capital participated alongside conglomerates including Vedanta. Japanese officials planned facility visits to Lohum's operations in Uttar Pradesh.

Japanese representation included Members of the Battery Association for Supply Chain (BASC), along with major corporations including Mitsubishi, Sumitomo, Diakin Chemical Southeast Asia, and Hanwa.

Implications For Regional Supply Chain Architecture

The investment framework represents a significant shift in regional manufacturing strategies, with Japan seeking to establish alternative supply chain networks that reduce dependency on Chinese-controlled resources and manufacturing capabilities.