Hachigo will remain on the company board, Japan's second-biggest automaker by sales said in a statement.
CEO Takahiro Hachigo announced the update on the collaboration after Honda launched in Japan the Clarity, its first mass-market fuel-cell vehicle, which will run on hydrogen rather than petrol.
The vehicle is scheduled to be launched in the country this year. India is the largest contributor to the Asia and Oceania region and the fourth largest contributor to Honda's automobile sales globally, Honda Motor Ltd President and CEO Takahiro Hachigo told reporters here at the Delhi Auto Expo 2016.
The company, which has made India one of its global components export hubs, also sees 'ample room' of growth for export of cars from the country with increased competitiveness of finished vehicles produced there.
Honda has said its two production centres in China already have more capacity than required to meet its sales targets, while overall global production for the year ending March is running at 5.6 million vehicles, well ahead of its sales target of 4.8 million vehicles this year.
The unexpected decision follows the recalls of more 6.2 million Honda vehicles in the US and millions of others elsewhere equipped with air bags made by Japan's Takata Corp.
Hachigo, 55, an engineer, joined Honda in 1982 with a career spanning several countries including the United States, China, and Britain.