Japanese Chemical Firms Shift Investment Focus from China to India
Japanese chemical companies like Mitsui Chemicals and Sumitomo Chemical are reallocating investments from China to India, prompted by geopolitical tensions, economic uncertainties, and growth opportunities in sectors like semiconductors. Japan's investment in China dropped 46% year-over-year in 2024, while Japanese operations in India increased by over 400 sites in three years. The Japanese government plans to double private-sector investment in India to $66 billion within the next decade, responding to India's growing economy and middle class.
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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.
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