Market Overview India: Inviting Japan to 'Make in India'!
A brief look at the historical economic ties between India and Japan and where the relationship is headed today, especially in view of the manufacturing sector.
Indian and Japan have a long history of spiritual, cultural and economic ties, dating back from the time when Buddhism traveled across the continent some 1400 years ago. In fact the earliest documented contact between India and Japan is the consecration of the towering Buddha statue at Nara in AD 752, by an Indian monk, Bodhisena. Over the decades, hosts of Indian and Japanese leaders and statesmen have exchanged visits to strengthen these ties, particularly the economic ones which are a mainstay for development in the 21st century.
Economic agreements and trade
In 2014, the Indian Prime Minister, Mr. Narendra Modi paid an official visit to Japan and along with his counterpart, Prime Minister Shinzo Abe of Japan, set up the ‘special strategic and global partnership’ between the two countries. Their common goal was to increase Japan’s direct investment into India and double the number of Japanese companies doing business in India by 2019.
During Mr. Abes’s reciprocal visit in 2016, India initiated the establishment t of the ‘Japan Plus’ office in the Ministry of Commerce – to serve as a one stop location for resolving problems faced by Japanese companies. A ‘Visa on arrival’ facility was also set up to ease travel for Japanese businessman.
For the manufacturing industry, both countries also agreed to develop a skilled workforce – by announcing the co-operation of japan in training 30,000 Indian workers over the next 10 years in Japanese style manufacturing skills. This was to be done through the Japan- India institute of manufacturing (JIM), the first of which is set to make its debut in the summer of 2017 in Gujarat.
According to the Ministry of foreign affairs of Japan, trade figures between the two countries are as follows:
India’s primary exports to Japan have been petroleum products, chemicals, elements, compounds, non-metallic mineral ware and machinery .India’s primary imports from Japan are machinery, transport equipment, iron and steel, electronic goods, organic chemicals and machine tools.
Japan is the fourth largest foreign investor in India. The amount of Japan's cumulative investment in India since April 2000 to September 2016 is US$ 23.76 billion, which is nearly 8 per cent of India's overall FDI during this period. Japanese FDI into India has mainly been in automobile, electrical equipment, telecommunications, chemical and pharmaceutical sectors.
The presence of Japanese companies in India has been increasing steadily. As of October 2015, there were 1,229 Japanese companies registered in India, an increase of 73 companies as compared to 1,156 in October 2014. These companies had 4,417 business establishments operating in India, which is an increase of 536 establishments (14 per cent growth) compared to 3,881 in October 2014.
During the first week of May 2017, Union Finance Minister, India, Arun Jaitley, during an official visit to japan, held bilateral discussions with the Finance Minister of Japan, Mr. Taro Aso. The crux of these discussions was the highlighting of the advantages and facilities available under the ‘make in India’ initiatives and a call to Japanese companies to ‘Make in India’ through the setup of manufacturing facilities.
Both the Ministers noted the growing synergy between India and Japan and committed themselves towards working closely to further expand India-Japan bilateral economic cooperation.