India is sending another strong signal to global technology and manufacturing companies: the country wants investment, technology, and advanced manufacturing — and is increasingly willing to reduce regulatory friction to attract it.
On 25 August 2026, during his visit to Japan, India's Commerce and Industry Minister Shri Piyush Goyal announced that the Government is working on a framework to provide exemptions from mandatory Bureau of Indian Standards (BIS) certification requirements for equipment and components required by high-tech companies setting up manufacturing operations in India.
The proposed framework could provide exemptions at the company, industry, product, or project level, depending on the requirements of the business. The immediate issue was raised by Japanese companies, including Tokyo Electron, in discussions with the Minister regarding specialised equipment required for semiconductor manufacturing.
While the framework is still being developed and the precise eligibility conditions are yet to be notified, the announcement is significant for a broader reason: it demonstrates India's willingness to listen to the practical concerns of international investors and adapt its regulatory architecture to facilitate high-technology investment. For Japanese businesses evaluating India, this is a development worth watching closely.
Quick Reference: The BIS Announcement
- • Announced: 25 August 2026, Tokyo, by Commerce & Industry Minister Piyush Goyal
- • What it covers: BIS certification exemptions for equipment and components imported by high-tech manufacturers
- • Possible exemption levels: Company, industry, product, or project
- • Raised by: Japanese companies including Tokyo Electron, on semiconductor manufacturing equipment
- • Status: Framework under development — eligibility conditions not yet notified
- • Cumulative Japanese FDI in India: ~US$48.14 billion through March 2026
Why the BIS Announcement Matters
BIS certification plays an important role in India's product-quality and consumer-safety framework. However, specialised high-technology manufacturing equipment is often highly customised, technically sophisticated, and sourced from a limited number of global manufacturers. For semiconductor, electronics, precision engineering, and other advanced manufacturing businesses, requiring certification of every specialised component or piece of equipment can add time and complexity to the establishment of a new facility.
The proposed framework seeks to address this by creating a mechanism through which qualifying high-tech companies may receive exemptions for equipment and components brought into India for manufacturing. The Government has indicated the objective is to ensure timely availability of products, goods, and services required by high-tech companies establishing manufacturing operations in India — particularly relevant to Japanese businesses given Japan's considerable expertise in precisely the sectors India is trying to develop.
India and Japan: A Technology Partnership Entering a New Phase
India and Japan already have a deep economic relationship. Japanese companies have played an important role in India's automotive, electronics, infrastructure, financial services, engineering, and manufacturing sectors. Japan is among India's major sources of foreign direct investment, with cumulative Japanese FDI in India reaching approximately US$48.14 billion through March 2026.
But the next phase of the relationship is increasingly moving towards advanced technology and economic security. During the recent India–Japan industry roundtable in Tokyo, representatives of leading Japanese companies discussed opportunities in semiconductors and artificial intelligence — areas the Government of India has identified as important pillars of India–Japan economic and technological cooperation. Participating companies included Tokyo Electron, Daifuku, Preferred Networks, ABEJA, MinebeaMitsumi, Fujifilm, Toray, Kyocera, Fuji Electric, ROHM, and NEC — demonstrating the breadth of Japanese industrial and technology interest in India's emerging technology ecosystem.
The relationship is therefore moving beyond the traditional “Japanese manufacturing in India” model, toward: Japanese technology + Japanese capital + Indian talent + Indian market + Indian manufacturing capabilities.
Why Japanese Companies Should Look at India Now
India's opportunity for Japanese companies is no longer limited to establishing a conventional manufacturing plant. Several new opportunities are emerging simultaneously.
Semiconductor Ecosystem
India is building an integrated semiconductor ecosystem spanning design, fabrication, assembly, testing, equipment, and materials. Japanese companies can participate as equipment manufacturers, materials and chemicals suppliers, precision engineering partners, or R&D collaborators — building on the existing Tokyo Electron–Tata Electronics strategic partnership.
Electronics & Precision Manufacturing
India's expanding electronics market and domestic manufacturing push create openings for Japanese expertise in precision engineering, automation, robotics, industrial machinery, sensors, and factory automation systems.
Artificial Intelligence & Technology
India is emerging as a major AI and technology market. Japanese technology companies can treat India not only as a customer market but as a base for AI research, software development, product engineering, and Global Capability Centres.
R&D, GCCs & Supply-Chain Diversification
A Japanese enterprise doesn't need to begin with a large manufacturing investment — a Global Capability Centre covering research, engineering, and product development can be a flexible first step, while India also serves as a China+1 sourcing and manufacturing location for Asian and global markets.
But Entering India Requires More Than Identifying an Opportunity
For a Japanese company considering India, the critical questions often begin after the investment decision:
- Which entity should be established — subsidiary, branch, joint venture, or another structure?
- What are the FEMA and FDI implications?
- Where should the operation be located, and what central and state-level incentives are available?
- How should imported machinery and equipment be structured, and what are the GST and customs implications?
- How should transactions with the Japanese parent be priced, and what transfer-pricing documentation is required?
- How should the Indian finance and compliance function be established, and what ongoing obligations will arise?
These questions can materially affect the cost, efficiency, and risk profile of an India investment — which is why getting the entry strategy right for Japanese companies matters as much as the opportunity itself.
How AU Corporate Can Support Japanese Businesses Entering India
Our objective is to help international businesses convert an India investment opportunity into a properly structured and operational business. For Japanese enterprises, we support the India journey across multiple stages:
- India entry strategy — evaluating entity structures, FDI/FEMA considerations, and location decisions
- Tax and regulatory advisory — corporate tax, transfer pricing, GST, withholding tax, and FEMA compliance
- Business establishment — incorporation, accounting systems, finance-function setup, and payroll compliance
- Manufacturing and investment projects — tax incentives, SEZ, Export Oriented Unit (EoU), and MOOWR frameworks depending on the business model
- Ongoing operations — tax and GST compliance, transfer pricing, accounting, audit support, and regulatory compliance
The Opportunity Is Bigger Than the BIS Exemption
It would be easy to view the latest announcement simply as a change in certification requirements. We believe it represents something more important: India is increasingly moving towards an investor-responsive regulatory environment for strategic industries. The Government is actively engaging with Japanese businesses, identifying practical barriers, and looking for mechanisms to address them — while investing heavily in semiconductor manufacturing, electronics, AI, digital infrastructure, and advanced technology.
Japan brings globally recognised capabilities in precision manufacturing, engineering, robotics, electronics, materials, and industrial technology. India brings scale, talent, a large domestic market, and an expanding technology and manufacturing ecosystem. The opportunity lies at the intersection of these strengths.
What Japanese Companies Should Consider Now
For Japanese businesses that have been evaluating India but have not yet taken the next step, this may be an appropriate time for a structured India entry assessment — working through business model, market, location, structure, investment, incentives, tax, regulatory requirements, operations, and compliance in sequence, rather than beginning with incorporation. A well-designed structure at the beginning can avoid significant restructuring and compliance issues later.
The proposed BIS framework is still under development, and businesses should continue to assess the specific certification requirements applicable to their products and equipment until the final framework and exemptions are formally notified. But the policy direction is clear: India wants Japanese technology and Japanese businesses to participate in the country's next phase of industrial development.
Conclusion: Building the Next Chapter Together
The India–Japan relationship has already created successful businesses, manufacturing facilities, and technology partnerships across multiple sectors. The next chapter could be considerably broader — from semiconductors and AI to precision manufacturing, robotics, electronics, engineering, and R&D. For Japanese businesses considering India, the question is no longer simply whether India presents an opportunity. It is: how can that opportunity be structured, established, and operated successfully?
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