It could be a new era for Japanese-Indian business co-operation.
It seems a lifetime ago that Tokyo was imposing strict sanctions on
India after the latter nation’s nuclear testing in the south Indian
Ocean in the late nineties.
Sentiment towards each other has turned 180 degrees in recent years,
however, with Japan recognizing the massive potential for growth
available in the Indian marketplace.
The two nations make good partners, having a few fundamentals in common,
including their political ideals and both having long-term border
disputes with the third biggest world economy, China.
India and Japan are also both constituents of the G-4 body which takes an active role attempting to push reforms in the U.N.
Each country is backing the other for a permanent place at the security council of the United Nations.
Over the past few years the amount of Japanese corporate businesses
operating in India has risen by over 50 percent. This is a very positive
indicator that Japanese firms are more than excited by the recent
opportunities for their own development produced by the India’s growth.
Indeed, much of the investment is very recent, with over 30 percent of
the approximately 470 Japanese firms currently in India ploughing funds
into the country last year alone. This stunning influx can be mostly
attributed to very favourable Indian initiatives designed to attract
foreign investment, especially from Asian countries.
“It’s a really exciting opportunity to come to India and live, our
family enjoy it immensely here,” says Kazutaka Nishimura, a finance
manager for Sony. “We’ve been here nearly a year now and the local
people have been most welcoming. It’s nice to live in a booming
economy.”
The only factor stopping the two countries going to new levels of
economic partnership might be India’s third world infrastructure,
something the government predicts needs plenty of investment, maybe as
much as $350 billion.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management
who handle over $500 million of funds in the Indian subcontinent said
that “Japan could feasibly step in and assist with some investment into
the infrastructure here. They have already put in nearly 50 billion
dollars, who’s to say they cannot go on and make some serious changes?
It would certainly be a mutually beneficial move considering the current
trend of Japanese firm’s expansion in the region.”
A Japanese-Indian project is already underway to build the Delhi-Mumbai
Industrial Corridor (DMIC) with Japan thought to have invested $100
billion already.
