India, Japan to Hold Investment Forum

Commerce Minister Piyush Goyal and his Japanese counterpart to discuss increasing cooperation in manufacturing and digital technology

To ensure that bilateral investment flows are maintained despite the Covid-19 pandemic, India and Japan will hold an exclusive online investment forum on Thursday to attract more Japanese investments into the country in manufacturing and digital transformation.

The two sides, led by Commerce & Industry Minister Piyush Goyal and his Japanese counterpart Hiroshi Kajiyama, will focus on automobiles and capital goods, pharmaceutical and medical equipment, electronics and textiles as well as digital technology, an official said.

“With the Covid-19 pandemic exposing vulnerabilities in existing global supply chains, Japanese companies are interested in diversifying and investing more in India provided the Indian government provides adequate policy support and removes existing bottlenecks,” the official said.

Japan is the fourth largest investor in India, after Mauritius, Singapore and the Netherlands, accounting for cumulative Foreign Direct Investments (FDIs) of $33.5 billion in 2000-20 period accounting for 7.2 per cent of India’s total inflows.

Japanese officials are likely to point out that most of the investment flows from the country are in the manufacturing sector, which creates jobs, rather than in real estate. The investments are not through circumvention as in case of some of the top investment destinations that serve as tax havens.

Goyal may point out the need to review the Japan-India Comprehensive Economic Partnership Agreement, with a view to make it more balanced, another official said. India is concerned about its increase in trade deficit with Japan after the implementation of the pact as Indian exporters were not able to use it much to their advantage.

Opportunities in top sectors

At the investment forum, presentations on the opportunities in top sectors will be given by senior officials in the respective Ministries and Departments. A presentation of the automobiles and capital goods will be given by the Department of Heavy Industries, pharmaceutical and medical equipment by the Department of Pharmaceuticals, electronics by Ministry of Electronics and IT and textiles by Ministry of Textiles.

Department for Promotion of Investments and Internal Trade (DPIIT) Secretary S B Mohapatra will give a detailed account of all the investment facilitation measures taken by India so far, that would include removal of Foreign Direct Investments restrictions as well as various steps taken to improve ease of doing business.

Shigehiro Tanaka, Vice-Minister for Economy, Trade & Investment, will also participate in the meet and give an outline of what the Japanese investors want to do in partnership with India and what their expectations are.

The experience of Japanese companies operating in India so far would be recounted by Japan External Trade Organisation Chairman Nobuhiko Sasaki. Sony, Hitachi, Honda, Panasonic, Yamaha, Toyota, Canon, Suzuki and Mitsubishi are amongst the 1,441 Japanese companies established in India running a total of 5,120 business establishments.

Interestingly, representatives from Japan’s Ministry of Economy, Trade & Investments, recently made a submission to DPIIT stating that about 990 items that Japanese companies in India sourced from China should be exempt from possible import restrictions as it could hit their performance.