India is clearly a favoured destination for Japanese investments with a majority 71% of the Japanese companies surveyed in a poll said that they would increase their stakes in India.

Indian companies, too, are exploring Japan as an investment opportunity, with around 70 IT companies having already established their offices in Japan.

The Japan External Trade Organisation (JETRO) had in a 2005 report stated that Japanese companies saw India as one of their top priorities for expansion.

The report details the best practices adopted by 25 Japanese companies in the Indian market. The report, which also includes profiles of 17 Japanese companies doing business in India, was released ahead of the World Economic Forum's East Asia Summit at Tokyo.

Major Japanese companies are looking forward for more trade and joint ventures with India as Japanese companies feel that India is the most stable nation in Asia.

Japan is India's fourth largest source for foreign direct investment. Japanese industry observers feel that mutual trade between the two countries will rise as India has political transparency and a neutral sentiment towards Japan.