Japanese investors are excited after the new government has promised faster decision-making and emphasis on has emphasis on infrastructure in India, and they are ready to bank roll and provide expertise to develop India’s physical infrastructure. Japan’s Ambassador to India Takeshi Yagi, along with representatives from that country’s development agencies, met department of industrial policy and promotion secretary Amitabh Kant on Friday to discuss investment plans in India, particularly in various infrastructure corridors.
The meeting was part of a mutual effort to give a thrust to Japanese investment in India, Kant told ET. The two sides assessed how the government can work together with agencies such as the Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation (JBIC) for speedier implementation of projects in hand and thereby bringing in more investment, he said to media. “We discussed and reviewed the Delhi Mumbai Industrial Corridor (DMIC) and Chennai Bangalore Industrial Corridor.” The meeting was attended by representatives from Japanese organisations JICA, JBIC, Japan Chamber of Commerce and Industry in India, Overseas Human Resources and Industry Development Association, and the New Energy and Industrial Technology Development Organization, besides Madhya Pradesh commerce and industry minister Yashodhara Raje Scindia. “The MP minister also wanted to provide impetus to DMIC in her state,” Kant added.
The BJP, which is set to form the next government on Monday, in its election manifesto had talked about building 100 new cities besides making world-class investment and industrial regions as global hubs of manufacturing. While India has been wary of Chinese investment, the comfort level is much high when it comes to Japan, and it is very visible in foreign direct investment numbers. Japan is the fourth biggest foreign investor in India, contributing about 8% to the total FDI inflows. It brought $1.7 billion in fiscal 2013-14, and $16.2 billion between 2000 and 2014. In contrast, FDI from China is $0.4 billion since 2000. The close ties between the countries were also visible when Japan expanded its currency-swap arrangement with India to $50 billion from $15 billion last year, contributing to New Delhi’s efforts to arrest the rupee’s free fall. About 60% of Japanese presence in the country is in the manufacturing sector. Big Japan-funded projects in India include the ongoing DMIC and the Delhi Metro. The Japanese are also in talks to build a road network in the Northeast.
The Japanese government has approved $4.5 billion for non-commercial projects through JICA and commercial lending through JBIC, which has 26% equity in DMIC. Besides, Japan has also committed a loan of $2 billion for the Delhi Metro. The two sides are also integrating on the Chennai Bangalore Industrial Corridor. India and Japan are widely expected to forge even stronger ties under the incoming Narendra Modi government. “India’s relationship with neighbours in the East is likely to improve tremendously. Modi is pro foreign investment and will help in attracting technology and boost manufacturing. Japan is a huge stakeholder in DMIC, with larger zones in BJP-run states, be it Rajasthan or Gujarat, which will strengthen bilateral ties,” said Arpita Mukherjee, professor at the Indian Council for Research on International Economic Relations. According to her, it is the corporate confidence which will drive up investments further, which will mean carrying out reforms.
