A Comprehensive Guide to the Factors That Influence Business in India VS Japan

Doing Business in India VS Japan The economy in India vs Japan is the first aspect to consider. Both countries are well-developed, and both nations have excellent prospects for investors. Both governments have simplified their business formation procedures and also offer several incentives to lure investors. However, there are huge points of differences in matters like culture, way of conducting businesses, and the cost of living. As a businessperson, you need to carefully analyze these differences and decide which nation is a better investment choice.

These conditions affect the way business is conducted in India and Japan:


Location and Climate


The country lies centrally between East and West Asia. The trans-Indian routes connect European countries to East Asia, giving India’s location its strategic significance. India is a neighbour to Pakistan, Sri Lanka, Bangladesh, Indonesia, Myanmar, Nepal, and the Maldives and has access to their ready markets. It has excellent relationships with the nations in Europe, West and East Asia, and West Africa. The Indian climate is moderate in most regions and favourable for all types of industries, whether it is agriculture, manufacturing, mining, petrochemicals, or others. Natural resources like coal, oil, natural gas, iron, manganese are abundant in the Indian subcontinent.


It is an island country that lies in the northwest Pacific ocean, with about 72% of the region filled with mountain ranges. Its nearest neighbours are China, Korea, and Russia. Japan has good relations with the US, Philippines, Singapore, Thailand, Indonesia, Brunei, Vietnam, the Middle East, and European countries. Japan’s climate is different in each region, with warm summers and very cold winters in the North and hot summers and cold winters with heavy snowfall in the east. It has very hot summers and moderate winters in the west and a subtropical climate in the south. Japan has experienced several volcanic and seismic activities in the past, and there is always an imminent danger of earthquakes and volcanoes. Natural resources in the country are generally less, but coal, iron, zinc, copper, lead, gold, and silver are found in plenty.

Location and climate-wise, both countries have similar opportunities when comparing India vs Japan.


Business Prospects


The country’s economic growth has been phenomenal in recent years, and the government has eased restrictions on foreign direct investment. The procedures for business formation are straightforward and fast. Infrastructure is excellent here with well-developed transport systems. A young, skilled, and literate workforce is readily available here. Living costs are much lower than in other countries, thus bringing down operational costs for businesses.


The market-oriented economy of the country favours the growth of business ventures and presents huge opportunities. The nation’s infrastructure is excellent with well-built roadways, railways, harbours, airports, highways, and telecommunication systems. Highly-educated and skilled labour is available here easily. The government has reduced the costs of forming companies to encourage investment. The cost of living is very high in Japan, especially in its major cities, with high rates of accommodation, food, and consumables.

The government-friendly policy, cheap labour and country’s growth may make India a better business prospect in India vs Japan competition.




The Goods and Services Tax (GST), recently introduced, India has streamlined tax procedures, making it easy to file returns through a simple online process. The Indian government encourages the growth of startups and has visions to make India more self-reliant in the near future.


The corporate tax rate in Japan is very high and around 30.62% currently. Its individual income tax rates are among the highest in the world. The tax payment system is lengthy and not very smooth.

With low taxation and simplified process, foreign investors can easily sail through the accounting process in India.




The country’s main industries are sugar, cement, iron and steel, jute, automobiles, banking and insurance, textiles, paper, and petrochemicals. The country has witnessed a huge growth in the number of startups recently due to the various incentives offered by the government.


The primary Japanese industries are automobile, steel, electronic equipment, chemicals, textiles, processed foods, and machine tools.


Business Setup


The Indian government has streamlined company setup processes to encourage investment. The online procedure is easy, allowing company formation within one week.


The business setup procedures in Japan are not very easy, and you have to deal with a lot of bureaucracy while starting a company. Getting construction permits is also a tough process, and so is the procedure for registering property and obtaining an electrical connection.

English being the national language of India along with the business-friendly process, India is definitely at a better position than Japan where the process is complex.

It is evident that India and Japan both present many opportunities for both foreign and local investors. However, there are marked differences in India vs Japan related to culture, climate, geographical conditions, and other factors. We clearly see that both countries present lucrative reasons to the new business investor and you can go with your preference.

3E Accounting is a reputed firm with highly-qualified and experienced experts in the fields of accounting and taxation. We provide professional and reliable company setup services to businesspersons, enabling them to register their companies and comply with the essential rules and regulations. We take care of all business-related aspects, including documentation, accounting, and taxation for our customers, allowing them to run their business efficiently and achieve their set targets.

Doing Business in India VS Japan