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Japanese chemical firms are transitioning from China to India for investment, driven by geopolitical tensions and new market opportunities. In 2024, Japan's investments in China declined by 46%, whereas operations in India surged to 5,205 sites, reflecting a strategic pivot towards growth-oriented investment.

The Japanese government aims for $66 billion in private-sector investment in India over the next decade. Companies like Sumitomo and Mitsui are exploring local production of semiconductors and agrochemicals, with plans for significant expansions, including Mitsui's potential production of EPDM rubber and functional compounds. India's economic growth and increasing demand for high-quality materials are key factors in this shift.