Japan wants more of India

<div class="section1"><div class="Normal" style="" text-align:="" justify="">NEW DELHI: Japan is preparing to pump in more investments in India and step up bilateral business co-operation, sending a clear message that it isn''t going to lose out to South Korean and Chinese companies in India. <br /><br />Japan is also wooing Indian IT companies who are providing key support to Japanese manufacturing firms to become even more competitive.Japanese ambassador to India Yasukuni Enoki said his country''s top businessmen are now seriously evaluating investment plans in India. "A second wave of Japanese investments in India is on. Within a couple of years, India will face its second boom phase of investment from Japanese firms," Enoki told The Times of India.<br /><br />Japanese firms operating in sectors like automobiles, pharmaceuticals, chemicals, construction and confectionery are firming up plans to increase investments in India. While the Japanese prime minister is likely to visit India in April, top Japanese business and political leaders will participate at a CII conference deliberating challenges and responsibilities for India and Japan as partners in the 21st century in Asia, on March 16.<br /><br />Industry leaders said Japan''s investments in India are "too low" compared to Japan''s FDI stock of $50 billion in South East Asia and $40 billion in China.<br /><br />Around 265 firms from Japan have invested in India, with total foreign direct investment of $2 billion.<br />Enoki said better times are ahead. "India''s investment environment is behind others, but we are supporting and appreciating that the general thrust is on the right track. India''s economic structure is very much resilient against external shocks," said Enoki.<br /><br />Listing out new investments, ambassador Enoki said Suzuki has plans to set up a second factory for four-wheelers, diesel engines and two-wheelers. Daihatsu, a Toyoto company, will manufacture small cars in India as a contender to Suzuki. Mitsubishi Chemicals plans to double or treble its existing manufacturing capacity. Japanese confectionery manufacturer Lotte has decided to invest in Himachal Pradesh for manufacturing candies. Many construction companies are lining up to offer tenders for India''s infrastructure projects.<br /><br />In pharmaceuticals, Japanese firm Eizai is already operating in Mumbai and other pharma firms are looking to strengthen their R&D facilities in India.<br /><br />Commenting on a key sector where Japanese firms have lost out to South Korean ones like LG and Samsung — consumer durables and appliances — Enoki said: "It depends on the business field. Each country has its advantages."<br />Japanese firms in India, like Sony, Hitachi and Daikin, have significantly reduced manufacturing investments in India and prefer to import because of cheaper import duties.<br /><br />According to Enoki, disadvantages faced by Japanese firms in India include the slow pace of liberalisation, insufficient development of infrastructure, and labour laws. "While land prices and labour are cheap, the biggest problem faced by companies is that in order to start manufacturing they have to invest in their own generators. This is a huge cost," said Enoki.<br /><br />Despite all this, Japanese firms are bullish on investing late in India as the country''s GDP is likely to grow constantly at 5 per cent till the middle of this century.<br /><br />Asianisation is emerging as a new trend. India''s trade with the rest of Asia in the first five months of 2004-05 is higher than its trade with America and West Europe combined. Trade with Europe and the US together was pegged at $24.6 billion, while trade with Asia for the same period was estimated at around $26.5 billion.</div> </div>