Smart cities are vital to urban development. In Asia, early leaders, such as Japan, Singapore, and South Korea, began investing in smart city projects in the early 2000s. Over the following decade, India, along with many other emerging Asian nations and economies, increased its investment significantly in this area.
Recently, a high-level Japanese delegation visited Gujarat’s Dholera Smart City to explore semiconductor and infrastructure projects in the Dholera Special Investment Region. This collaboration draws inspiration from Japan’s Tokyo–Osaka corridor and highlights the country’s role in India’s economic transformation by actively supporting business opportunities and promoting Japanese companies in the country.
With the growing influence of economic diplomacy in India’s urban development, collaborative initiatives under the Smart City Mission are taking on an increasingly prominent role. And Dholera serves as a model, positioning itself as a global hub for advanced manufacturing and modern urban living. It’s a compelling case study in the India–Japan strategic partnership, particularly in the joint development of smart cities.
Indo-Japan Confluence in Gujarat
As a flagship greenfield smart industrial city under the Delhi-Mumbai Industrial Corridor, Dholera is a key part of India’s Vision 2047. It aims to build a developed, innovation-driven economy.
Located strategically between Ahmedabad and Bhavnagar in Gujarat, Dholera is India’s first platinum-rated smart city, combining manufacturing, logistics, IT services, and residential areas. Supported by the National Industrial Corridor Development Corporation and partially funded by the Japan Bank for International Cooperation, it showcases Indo-Japanese industrial collaboration.
The city is also a hub for India’s semiconductor ambitions. Tata Electronics’ semiconductor fabrication plant, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, illustrates Gujarat’s role in the Semicon India program.
Fab construction is being undertaken with a total investment of 91,000 crores (about $11 billion USD), placing them among the largest corporate investments in India’s history.
Expanding Infrastructural Development
The Dholera Special Investment Region will also include an advanced water treatment plant, a canal front, a power substation, and an Integrated Command & Control Center, boosting its infrastructure and enabling real-time governance.
Road and infrastructure development for the Dholera Smart City in Gujarat, India (Courtesy of Dholera.In)
It offers multimodal connectivity through the Ahmedabad–Dholera Expressway, a proposed Greenfield International Airport, and potential bullet train links. By 2047, the city will have comprehensive public infrastructure. These will include a multi-specialty hospital, integrated schools, hospitality zones, and residential complexes, supporting a high standard of living.
Designed as a self-sufficient, transit-efficient, and sustainable township, it is set to become India’s gateway to advanced manufacturing and a key platform for expanding strategic industrial and technological ties between Japan.
Mutual Commitment and Benefit
This joint India-Japanese project also aims to build a mini-Japan township with an urban-industrial foundation raised from the ground up.
In addition to its commercial appeal, Dholera’s planned social infrastructure includes a multi-specialty hospital, a fire station, an integrated school, a luxury guest house, residential and commercial complexes, and hospitality centers.
This offers a significant opportunity for Japanese investment in both the economic and social sectors. Once complete, it will feature manufacturing facilities, commercial areas, and residential communities.
It will also have a self-sufficient, transit-efficient, and sustainable infrastructure designed to support high-quality living. Dholera’s smart governance and connectivity aim to position it as India’s leading manufacturing hub.
Deepening Economic Diplomacy
The latest development marks a significant step in strengthening industrial ties. Japan’s Ambassador to India, Keiichi Ono, led a delegation of top Japanese companies on a two-day visit to Dholera Special Investment Region (Dholera SIR) in Gujarat in July. That flagged Japan’s growing interest in the Dholera region and its infrastructure development.
It carries strategic importance because the project emphasizes semiconductor investment. Mizuho Bank will soon evaluate and develop a robust semiconductor ecosystem in the area. Japan’s expertise in this sector, combined with the increasing interest of Japanese semiconductor companies in investing in the region, will facilitate collaboration among India, Japan, and Taiwan to develop and maximize the potential of semiconductor cooperation.
Furthermore, the electric vehicle manufacturing and bullet train sectors in the region are other areas of convergence. Beyond semiconductors, Japan’s growing interest in electric vehicle (EV) manufacturing in Gujarat involves exploring opportunities to invest in EV production units. Moreover, it seeks to accelerate the highly anticipated Ahmedabad–Mumbai High-Speed Rail (bullet train) project. This will significantly improve Dholera’s connectivity and industrial reach.
With over 350 Japanese companies already operating in Gujarat, the latest engagement reflects a deepening industrial and technological partnership based on mutual interests of innovation, sustainability, and inclusive growth.
Indian Government Support with Japan
Dholera SIR stands to gain from its proximity to major industrial hubs, particularly in automobiles, EV components, and battery manufacturing, as Gujarat leads in original equipment manufacturer presence.
Key sectors also include aerospace and defense, with state policies promoting engineering, shipbuilding, MRO (maintenance, repair and operations), and electronics. Manufacturing clusters in cities such as Ahmedabad, Rajkot, and Vadodara further enhance the region’s appeal.
The Indian government supports the project through streamlined approvals, a single-window government-to-business system, competitive land pricing, dedicated investor support, and fiscal incentives. Together, these measures present a significant opportunity for Japanese collaboration in the supply chain sector, closely aligning with India’s broader industrial and investment objectives.
Japan’s involvement includes providing technical support in spatial planning. It also covers implementing urban models such as eco-cities, transit-oriented development, and resilient smart cities. These reflect its expertise in high-quality infrastructure and urban management. India encourages Japanese investors through subsidies, tax benefits, and culturally familiar facilities.
This cooperation is a key part of Japan’s Official Development Assistance. It supports India’s developmental goals and strategic interests, including economic growth and political influence, while advancing Japanese smart city technologies.
An overall plan showing the design of the Dholera Smart City in Gujarat, India (Courtesy of Dholera.In)
Smart City: A Center for Urban India
The concept of a smart city varies across countries. In India, it focuses on upgrading informal settlements, developing greenfield areas to meet housing needs, and implementing technology-based infrastructure in sanitation, waste management, and transportation.
The Indian government aims to build advanced infrastructure to attract corporate investment, thereby boosting regional economies through commerce and employment. Official estimates indicate that industrial smart cities could create between 3 to 5 million jobs and attract around $17.5 billion USD in investments.
Japan is supporting the development of smart cities in Chennai, Ahmedabad, and Varanasi as part of this effort. Additionally, India is working on 11 industrial corridors across 13 states, involving 20 major projects. All in all, they offer a total of 1,091 acres of industrial land with an expected investment potential of $11.3 billion.
Among them, Dholera (Gujarat), Greater Noida (Uttar Pradesh), Vikram Udyogpuri (Madhya Pradesh), and AURIC Shendra-Bidkin (Maharashtra) are fully ready for industrial allotment. These projects are projected to generate over 100,000 jobs. More than 410 plots are allocated over 80 operational units, and 90 are under construction.
Building Beyond Infrastructure
Japan’s past contributions to India’s smart city initiatives demonstrate a sustained commitment to infrastructure-led transformation. Notable examples include its role in developing the Chennai–Bangalore Industrial Corridor and supporting the Delhi–Mumbai Industrial Corridor.
In Dholera, this partnership has evolved into a comprehensive urban vision that extends beyond industrial infrastructure to encompass social development.
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Author: Varuna Shankar
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