Japanese Investment to India - Current trend and future prospect - : Japanese Investment to India - Current trend and future prospect - January 23, 2006 Hiroshi Tsukamoto
President
Japan External Trade Organization (JETRO)
Contents : Contents (1) Introduction: India Regaining Global Economic Position
(2) Overview of Japanese Investment to India
(3) Recent Trends of Japanese Investment to India
(4) JETRO’s Activities towards Stronger Economic Relationship
(5) Conclusion: India and Japan in East Asia
(1) Introduction: India Regaining Global Position : (1) Introduction: India Regaining Global Position Growing middle class market (600 million in 2010 ?)
(2) Indian economy featured in business magazines
(3) Indian stock boom
(4) Increasing reference to JETRO
- country ranking: 2002:20th→2003:14th→2004:11th
India Attracting Japan’s Attention
Slide4 : (1) Joint Study Group for future EPA negotiation
(will be reported in June 2006)
(2) Prime Minister Koizumi’s visit to India (April 2005)
Agreed on “Japan-India Partnership in a New Asian Era”
(3) Mr. Aso, Foreign Minister’s visit to India (January 2006)
First overseas trip after his appointment as Foreign Minister
(4) Mr. Nikai, METI Minister: Meeting with Minister Kamal Nath (Dec. 2005)
(Agreed on developing economic ties between the two countries, especially, Japanese SME’s investment to India.)
(5) Indian Ministers’ visit to Japan scheduled in 2006
Development of Ties between the Governments (1) Introduction: India Regaining Global Position
Slide5 : Cumulative FDI in India (Aug. 1991 to Dec. 2004) （Japan ranked 4th） （Rs million) Source: Compiled by JETRO from [SIA News Letter]
by Ministry of Commerce and Industry, India (2) Overview of Japanese Investment to India Japan
Japanese Investment in India (1) : Japanese Investment in India (1) 328 Japanese-affiliates in India (as of Jan. 2006)
Location:
Delhi 67 Bangalore 57 Mumbai 45 Chennai 36 …
(2) Major Sectors :
Automotive Components, Trading, Machinery, Electrical Goods,
Transport, IT, Infrastructure
*Many investment from Japanese Affiliates in ASEAN, which does not appear
in statistics. (3) Recent Trends of Japanese Investment to India
Japanese Investment in India (2) : Japanese Investment in India (2) Trends:
(1) Expansion of automotive and motorcycle market
(2) Investment for expansion of factories
(3) Expansion of investment sector
(e.g. machine tool, automated production line,
engineering service)
(4) Investment from affiliates in ASEAN
(3) Recent Trends of Japanese Investment to India
JETRO Survey of Japanese Manufactures in ASEAN and India (March 2005) : (1) Profit prospects in 2005 (DI) JETRO Survey of Japanese Manufactures in ASEAN and India (March 2005) (3) Recent Trends of Japanese Investment to India (2) Planning to expand its operation in 1-2 years (%)
(3) Recent Trends of Japanese Investment to India : (3) Recent Trends of Japanese Investment to India JBIC report on Japanese Manufacturers' Overseas Business Operations (2005)
“Promising countries/regions for business development in the medium term”
- India ranked 2nd for the first time
India as an Emerging Economy
Slide10 : A Number of Business Missions to India (3) Recent trend of Japanese investment to India Year 2005
Nov: Fukuoka City, Nippon Keidanren
Dec: Kansai Economic Federation
Year 2006
Jan: JAPIA (Japan Auto Parts Industries Association)
Okayama Prefecture
Feb: JETRO/METI
SMRJ (Organization for Small & Medium Enterprises and
Regional Innovation, Japan)
April/May: JASME (Japan Finance Corporation for Small and
Medium Enterprise)
Slide11 : JETRO/METI India Investment and Business Mission
(1) Date: February 5-12, 2006
(2) Visiting Place:
New Delhi, Bangalore, Chennai / Kolkata
(3) Sector:
- Car and motorcycle
- Electrics and electronics, CAD/CAM
- IT, Bio, R&D, Out-sourcing
(4) Members:
Over 70 Japanese businessmen (including SMEs)
and METI officials (3) Recent Trends of Japanese Investment to India
Expected Fields : Expected Fields Automotive and motorcycles
(2) Infrastructure
(US$150 billion estimated to be needed in 10 years)
(3) Raw materials
(e.g. chemical products, steel)
(4) Bio industry (bio-informatics, pharmaceuticals)
(5) Food processing
(6) Service sector
(e.g. hotel, tourism, medical tourism, retail, transportation)
(3) Recent Trends of Japanese Investment to India
Efforts on India Side : Efforts on India Side “Destination India” campaign
(2) “Japan Cell” in Minister of Commerce & Industry
- One-stop centre for Japanese investors
- In cooperation with JETRO expert to PHDCCI
(PHDCCI: Punjab, Haryana, Delhi Chamber of Commerce and Industry)
(3) SEZ (Special Economic Zone) Law in effect (May 2005)
(4) Revision of “Press note 18” (eased regulation on NOC)
(3) Recent Trends of Japanese Investment to India
More Efforts Expected on India Side : More Efforts Expected on India Side Infrastructure （e.g. electricity, logistics)
(2) Tax procedures, Administrative procedures
(3) Labor issues (e.g. labor strikes in Honda, Toyota)
＊from JETRO Survey of Japanese Manufactures in ASEAN and India (March 2005)
(3) Recent Trends of Japanese Investment to India
Indian Investment to Japan : Indian Investment to Japan (1) IT Software companies:
-About 70 Indian software companies operating in Japan
-5,000 Indian engineers in working in Japan
(2) JETRO IBSC
Two Indian software companies utilized utilized IBSC and started operation in Japan
JETRO IBSC: http://www.jetro.go.jp/en/invest/investmentservices/facility.html (3) Recent Trends of Japanese Investment to India
India - Japan Business Matching : India - Japan Business Matching Upgrading India’s existing manufacturing and supporting industry.
(2) Matching Japan’s advantage in hardware, and India’s advantage in software.
(3) Recent Trends of Japanese Investment to India
Providing India’s Information to Japanese Businessmen : Providing India’s Information to Japanese Businessmen Seminars & Symposiums
- 4 seminars in 2005 (Tokyo(twice), Nagoya, Yokohama)
- 3 seminars + planned in 2006
- India Seminar in ASEAN countries (Bangkok, Singapore)
- Symposium “Economic Integration in Asia and India”
(Dec. 2005, Tokyo) - 400 participants
(4) JETRO’s Activities towards Stronger Economic Relationship
For More Attractive Investment Environment : For More Attractive Investment Environment (1) Strengthening PHDCCI (dispatching experts)
(PHDCCI: Punjab, Haryana, Delhi Chamber of Commerce and Industry)
(2) Cooperation in developing supporting industry
(mainly in auto parts industry)
(3) Overseas Investment Advisor in Bangalore
(4) JETRO Business Japanese Proficiency Test
(New Delhi, Mumbai, Bangalore)
(4) JETRO’s Activities towards Stronger Economic Relationship
Programs for Business Matching between India and Japan (1) : Programs for Business Matching between India and Japan (1) (1) IETF (International Engineering & Technology Fair) 2007
Japan participating as Partner Country (for the first time in 10 years)
(2) India Chem 2004, 2006
2004: Japan participated as Partner Country
2006: Japan participating as Guest Country
(4) JETRO’s Activities towards Stronger Economic Relationship
Programs for Business Matching between India and Japan (2) - High-Tech Area : Programs for Business Matching between India and Japan (2) - High-Tech Area (1) IT Software
- IT Seminars and Exhibitions
e.g.) The India IT Exhibition, Outsourcing Fair (J-OFIS)
(2) Bio Informatics
- Exhibitions (Bio Japan, Bangalore Bio)
- Exchange among researchers & scientists
e.g.) Univ. of Pune and Riken, Japan
(4) JETRO’s Activities towards Stronger Economic Relationship
Slide21 : (5) Conclusion: India and Japan in East Asia India’s Look East Policy from 1992
(2) FTA/EPA in progress in East Asia
Japan:Singapore, Malaysia, Thailand
Philippines, Korea, Indonesia, ASEAN
India: Thailand(early harvest), Singapore, SAFTA,
ASEAN, BIMSTEC
(3) East Asia Summit (2005.12)
16 countries gathered
(ASEAN 10, Australia, China, India, Japan, Korea, New Zealand)
India and Japan in East Asia economic zone
Economic Integration in East Asia
Slide22 : Thank you very much for your attention. Please visit our website: http://www.jetro.go.jp/