The first three such institutes would start in summer next year in Gujarat, Karnataka and Rajasthan.
This was announced after talks between Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe here.
"Japan's private sector will set up an institute of manufacturing in India to train 30,000 people in 10 years, especially in rural areas," Abe said.
Modi added, "Our dialogue in regard to training and skills development has broken new ground, and is an important component of our economic partnership."
He said the decision on skill development was a "big outcome" of the talks.
A Joint Statement issued later said the two Prime Ministers decided to cooperate on the human resource development in the manufacturing sector in India through "Manufacturing Skill Transfer Promotion Programme".
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Jaishankar said India can learn a lot from Japan in the areas like skill development, smart city development and cleanliness. He said Japan has empathy towards India with regard to these areas as it has gone through similar situations.
He said, "There is much to learn and absorb from Japan's experience."
He said Japan has always been a valuable partner in India's journey to economic prosperity, infrastructure development, capacity building and technology advancement. The scope and scale of our co-operation extends to diverse fields.
Underlining that both India and Japan have similar values of openness, democracy and respect for human rights and law, the Prime Minister invoked Lord Buddha and Mahatma Gandhi in this respect.
"Our capacities could also combine to respond to both, the opportunities and challenges that we jointly face in present times. And, together with the global community we can, and we must, combat the rising threats of radicalisation, extremism and terrorism," he added.
"Our economic links continue to flourish. Trade ties continue to grow. And, Investments from Japan are on the rise. Japanese companies have much to gain by participating in our flagship development initiatives. We, in turn, have much to gain from Japan's unparalleled status as the leader in technology and innovation," Modi said.
