Q. What makes India an attractive destination for SMBC Group to invest in?
The fundamental appeal of the Indian market lies in its GDP growth potential, demographics and aspiration. India now has the world’s largest population, and its demographic bonus period is expected to continue until around 2050 and we see significant growth in GDP during this period. Given that retail credit penetration remains low compared to the global standard and as financial sector growth is a multiple of GDP growth, we see a significant opportunity for SMBC Group to grow in India.
Moreover, the recent rapid adaption of digital infrastructure including Aadhaar, UPI and GST reforms are additional tailwinds. On the investment and trade area, given the rewiring of the supply chains due to geo-political considerations, we believe India would be one of the beneficiaries.
Underpinning our confidence in the India growth story is the India-Japan relationship, which was built during the PM Modi-PM Abe era and which continues to strengthen across various areas including investment. Building on our longstanding collaboration in infrastructure and manufacturing, we expect cooperation to broaden into digital, artificial intelligence, and clean energy. The SMBC Group is committed to firmly supporting the expansion of these investment flows.
With a broader footprint in India, SMBC Group would be able to accelerate investment and trade flows from Japan.
Q. How is SMBC Group promoting and deepening trade and business operations in India? Besides banking, which sectors does SMBC/ SMFG find attractive as potential investments worth looking at in the future?
In April 2025, we announced the establishment of the India division, led by Rajeev Kannan, who was previously co-head of Asia Pacific region. The India division is a significant step for SMBC Group as this is the first time we have established a country-specific division with direct reporting into Tokyo headquarters, which highlights the importance of India to SMBC Group.
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We are now coordinating all our platforms in India, including our strategic investment in Yes Bank through a single division, which enables us to make agile decisions, direct more resources and build scale that will enable to succeed in India.
SMBC Group has also established a $200 million corporate venture capital called Asia Rising Fund through which we have been investing in start-ups and fintechs in India and Asean. We have already invested in seven startups in India and are working on a number of other potential investments. We see significant opportunity for us to be involved with fintech and other startups, which could be partners for SMBC Group’s ecosystem as well as to our clients.
Q. While defence and security have always been important in India-Japan investment relationships, do you see scope for investments in AI, technology for electric mobility, clean energy, or any other sectors to increase?
Over the past decade, investment in India has been led by government initiatives, channelling capital into transport and infrastructure, renewable energy, and manufacturing, including electronics, precision machinery, chemicals and pharmaceuticals, and vehicles. Looking ahead, AI, advanced technology, EVs, and clean energy stand out as especially promising areas.
In the last five years, most new generation capacity in India has come from renewables, and installed renewable capacity has roughly doubled. International players have entered the market, and several Japanese companies have launched or partnered on projects. With Japan’s renewable energy technology and operational know-how, both countries can look forward to more sustainable growth.
As for electric mobility, many Japanese manufacturers, especially OEM automakers, have expanded in India since the 2000s. Growth slowed for a period, but investment is rising again as the government sets EV targets and develops the necessary infrastructure such as charging networks. Japan’s advanced battery technologies and smart energy management solutions are likely to see strong demand.
Given geo-political considerations, sectors such as semi-conductors, AI and rare earths could be new growth sectors for further collaboration between Japan and India.
First Published: Nov 14, 2025, 11:41
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