HYDERABAD: Although Japanese companies have joined the global capability centre (GCC) scene in India later than others, the ‘silver tsunami’ in Japan is driving an influx of these firms to India.
With approximately 30% of its population aged 65 and older, Japan faces a rapidly shrinking workforce while dealing with modernisation challenges. This situation has propelled Japanese companies to seek out India’s young and talented tech workforce, alongside its robust engineering capabilities and growing innovation ecosystem.
As reported by Joules2Watts Business Solutions, India is now home to around 85 Japanese GCCs employing over 180,000 people, a number expected to rise to about 150 GCCs employing over 350,000 professionals and attracting $2.5 billion in annual investment by 2028.
Stephen Barnham, global chief digital and information officer at Dai-ichi Life—which recently established its GCC in Hyderabad—noted, “Our talent pool is not just diminishing, but so is our customer base. We are seeking growth and essential tech skills abroad, particularly in India.”
Priti Sawant, CEO and founder of Joules2Watts, warns that Japan’s demographic crisis will lead to a reduction of 11 million in its workforce by 2040, presenting a significant labour shortage that could destabilize its economy.
India, hosting over 1,800 GCCs, includes centres for major Japanese corporations such as Sony, Nomura, MUFG, and Toyota, focusing on sectors like engineering, IT services, automotive design, and finance.
According to consulting firm ANSR, Japanese GCCs make up nearly 5% of the total GCC landscape in India, with rapid growth. “In 2024 alone, five new Japanese GCCs were established, and since January 2025, another five have initiated operations,” said Vikram Ahuja, co-founder of ANSR and CEO of 1Wrk, adding that they expect an additional 10-12 to follow by the end of 2026.
This increasing interest has prompted consulting organizations like EY India and Grant Thornton Bharat (GTB) to create dedicated teams for Japanese clients, assisting them with regulatory concerns, talent acquisition, and cultural integration.
“We have recently launched a dedicated desk focused on Japanese clients, employing around 1,500-1,800 professionals for over 100 Japanese businesses, including several GCCs,” stated Jaspreet Singh, partner and GCC leader at Grant Thornton Bharat LLP.
Many major Japanese financial institutions—such as top banks, insurers, and fintech firms—are establishing or planning to set up GCCs in India, though it’s still early in this transition, commented Sanjay Kapadia, partner and leader of the India-Japan Corridor in financial services at EY India.
“Japanese firms, with a long-standing presence in manufacturing in India, are now extending into technology and operations via GCCs,” added Neeti Sharma, CEO of TeamLease Digital.
Nikhil Kumar, partner-business consulting at EY India, observed that while most GCCs addressing Japanese needs are still based in Japan and nearby APAC countries, larger conglomerates like Sony, with significant operations in English-speaking markets like the US, are moving to India.
However, many Japanese companies are still cautious, leading to longer decision-making times compared to US and European firms. “Convincing Japanese companies to establish a centre typically takes 12 to 18 months, unlike three to six months for GCCs from other regions,” Kumar explained.
Kapadia noted that Japanese businesses tend to follow a three-year business cycle, differing from the annual cycles typical in other countries.
Additionally, many Japanese firms prefer a Build-Operate-Transfer (BOT) model, aligning with their cautious approach. GTB has hired senior partners from Japan to help bridge cultural and language gaps.
Dai-ichi Life, although operating in India’s life insurance market since 2009 through a joint venture, opted for a BOT model to launch its GCC in collaboration with French firm CapGemini.
Despite this cautious nature, most Japanese GCCs remain relatively small, typically employing around 500-750 people, according to Singh.
However, the scale of their operations is expanding. “Before 2019-20, the representation of Japanese financial services in India’s GCC landscape was minimal. Since then, many have transitioned from small teams to mid-sized operations that are tech and ops-focused,” noted Kapadia.
While some larger centres have surpassed 1,000 employees, they remain comparatively smaller than their Western counterparts, according to GCC enablers.
Kapadia remarked that growth, particularly post-2020, shows a clear trend. “US and European companies were early entrants, but recently, APAC firms, especially Japanese, have started to scale their GCC presence in India over the past five years.”
This shift is driven by a pressing need for cost optimization, high-quality tech and operations talent, and the maturity of India’s GCC ecosystem. “India is now perceived not merely as a cost centre but as a value hub for innovation and enterprise development,” he added.
Sawant emphasized that Japanese companies are realizing 30-40% operational savings by offshoring to India, benefiting from the ability to deliver quality at scale. “This cost-plus-quality framework is particularly appealing given Japan’s high operational costs and the necessity to stay competitive in global markets,” she explained.
The impending ‘2025 Digital Cliff’ due to outdated legacy systems also drives the move to India. Sawant noted that failure to modernize these systems could result in annual losses of ¥12 trillion, citing data from Japan’s Ministry of Economy, Trade, and Industry. By the end of 2025, more than 60% of Japan’s key IT systems will be over 20 years old, and a predicted shortage of 590,000 IT professionals by 2030 exacerbates the issue. Japan is looking to leverage India’s expertise in AI/ML, cloud development, cybersecurity, and automation.
Despite these advantages, cultural and language barriers remain significant challenges. “Thus, Japanese GCCs are investing not only in technical skills but also in cultural alignment training to help Indian teams adapt to Japanese work styles and values,” Sharma added.
