Japanese Soft Power Diplomacy in India: The Rise of MedTech Companies

A new avenue for collaboration is emerging between India and Japan, amid the rapid development of Medtech companies on both sides. Japan's market for medical devices remains among the world's largest, given its rapidly ageing population and the resulting rise in patients with chronic and lifestyle diseases.

The country is the fourth-largest producer of medical technology (medtech) by revenue, after the United States, China, and Germany. However, in the Japanese market, the sales growth of medical device companies is limited. This necessitates an extension of sales through global expansion.

In this context, India is becoming a key market with potential for collaboration in primary health care, maternal and child health services, hygiene, nutrition, and elderly care.

New domains are also coming to the forefront, including digital health, the tackling of non-communicable diseases, and the use of artificial intelligence (AI) in healthcare. Cross-collaboration and investment by Japanese medtech companies within the Indian market is growing, strengthening their leadership position.

Soft Power Through MedTech

Japan presents itself as a unique case, with one of the highest life expectancies in the world. It has approximately 28% of its population being 65 years or older. Japan's Ministry of Internal Affairs estimated that the number will reach about 36 million by 2040. The older individuals require more healthcare services, including monitoring and treatment equipment.

It is also estimated that the medical devices market in Japan will grow from $21.44 billion in 2024 to $45.2 billion by 2035. This will encompass a diverse range of products that include home care settings, invasive devices, drug delivery devices, diagnostic devices, medical equipment for chronic conditions management in healthcare systems, and electronic medical devices.

Integrated Healthcare

Japan has effectively shown its capabilities in advancing patient care. It has moved beyond products to deliver integrated healthcare solutions that combine clinical education, devices, and digital tools. The services have further extended beyond the device, incorporating data-informed insights, interconnected technologies, and smooth integration with healthcare systems. The country has invested deeply in innovation, talent, and agility to fuel long-term growth and build future-ready capabilities.

In this context, Indian collaboration is a critical aspect to help broaden the horizon, and enhance access and trust across the ecosystem. Japanese medtech companies have zeroed in on several focus areas such as education, training of healthcare providers, manufacturing, and collaboration, to strengthen their presence in India.

At the same time, the growing use of new technologies such as robotics, virtual reality, and AI is expected to further shape the Japanese medtech industry's growth in the coming years. The strengthening of strategic partnerships becomes inevitable to create a networked solution to the global challenge.

A Win-Win Situation

In recent years, the Indian market has gradually emerged as a strong field for Japanese medtech companies to invest in. This is reinforced by the fact that India is the fourth largest economy in the world, surpassing Japan by the end of 2025 as projected by the assessment by the International Monetary Fund. The country has the potential to become a strategic hub for Japanese companies that aim to scale their operations in emerging markets.

It is estimated that over 1,450 Japanese companies operated in India as of 2024, but the medtech sector accounted for a small share. Japanese medtech players entered the Indian market relatively late, around 2000, compared with their Western counterparts.

However, in recent years, it has been picking up, with more companies expanding their commercial presence in the Indian market. These include Nipro, Canon, Terumo, Olympus, Omron, Fujifilm, Tosoh, Pentax, Asahi, Horiba, Konica Minolta, Sysmex, Jeol, Paramount Bed, and TDK, etc. India presents itself as a bright spot, with strategic partnerships between medical technology players in both countries proving to be a win-win for the entire industry.

Japanese Companies in India

According to estimates, 27 Japanese healthcare companies have a notable presence in India, with 17 operating commercially and 10 running manufacturing facilities.

Furthermore, according to a survey conducted by JETRO, approximately 81% of Japanese firms prefer to expand in India. This reflects a strong business confidence. The current market size and projected growth of the Indian healthcare sector are approximately $198 billion and are expected to grow at a 12.7% CAGR, to $320 billion by 2028.

The healthcare sector in India is a $110 billion industry growing at 12% annually, with hospitals comprising $67 billion, pharmaceuticals $35 billion, medical devices $8 billion, and medical tourism estimated at $3 billion.

Human Resource Development and Local Manufacturing

In 2014, an agreement was signed that laid the groundwork for healthcare cooperation between India and Japan. The Memorandum of Cooperation (MoC) was signed between health ministries of India and Japan. It envisaged collaboration in the fields of human resource development, including training programs for nurses, public health professionals, and medical practitioners.

The memorandum also facilitates healthcare service delivery, technical exchange to improve the quality of care, and financing of universal health coverage.

At the same time, India's healthcare market is undergoing a shift from a standalone medical device model to a more connected, service-oriented system. It is also moving away from an import-and-sell approach with limited players toward greater local manufacturing, supported by the Production Linked Incentive (PLI) scheme. Japanese companies such as Nipro Medical Corporation (dialyzers) and the Omron Group (blood pressure monitors) are part of this transition.

Expanding Healthcare Technology

As Japanese players rethink their digital transformation strategy to bundle new services with existing devices and lock in their audience along the value chain, this slow and careful growth strategy will leverage a superior service quality.

For example, Terumo India has advanced its skill lab, with advanced models for simulation-based training to train healthcare professionals in minimally invasive procedures. Omron, renowned for its digital blood pressure monitoring devices, established its first India-based facility in Chennai in 2025, with an investment of 1.28 billion rupees ($13.4 million).

Furthermore, Olympus Corporation announced its strategic initiative to establish a Research & Development Offshore Development Centre in Hyderabad in 2024, and Horiba has opened one of the largest medical equipment and consumables manufacturing facilities in Nagpur in 2024, with an investment of 2 billion rupees ($20.9 million).

Similarly, with India as a key market, Canon has further focused on bolstering the rapidly growing medical business in 2025, and Fujifilm is expanding its health screening centers in India, equipped with its medical devices, including a mammography system and a CT scan, as well as a medical IT system based on AI technology.

Japanese-Style Healthcare Delivery in India

Another unique example of Japanese involvement is Sakra World Hospital, a Japanese-style general hospital in Bengaluru that has been the first general hospital in India to be managed by Japanese operators.

Sakra World Hospital has been operating its first clinic and offering home-care services, leveraging the experience at Sakra to build a system that meets the needs of Indian society. The hospital has more than 220 physicians providing advanced acute care across more than 35 specialist fields, including cardiovascular, neurological disorders, and digestive diseases.

Notably, the hospital is operated by Secom Medical System, which also provides hospital management support and home nursing services in Japan. This model is known as a "community-based integrated care system," but it has yet to be introduced in India on a national scale.

Looking Ahead

India, as a nation, is characterized by its large population and significant healthcare inequalities. To address this, there is a need to integrate Japan's AI technologies and innovation with India's healthcare initiatives.

The convergence of robotics, AI, and personalized care is expected to transform the medtech sector. Virtual reality and augmented reality are also set to revolutionize surgical training by providing surgeons with realistic simulations and advanced visualization tools.

This will result in precision surgeries, improved diagnostic accuracy, proactive patient management, and better access to healthcare. It will also enable the creation of tailored treatment plans based on individual patient data and risk factors. Overall, the integration of robotics and AI can help bridge critical gaps in access, affordability, and quality of care.

India and Japan can set new examples to address common healthcare challenges by redefining the medical technology landscape. The collaborative efforts by both will address challenges such as an ageing population, workforce shortages, and regional disparities.

This will require the collective support of all stakeholders, including industry, academia, startups, suppliers, and governments in both countries. As the partnership between India and Japan enters a new phase, MedTech companies stand out as a key area for increased investment and collaboration.

Author: Varuna Shankar