Japan seeks to expand presence in India

Japanese companies should look at more trade opportunities in India, says Japanese scholar Masanori Kondo.

Speaking on 'Japanese business in India: strengthening ties' at a seminar organised by the Confederation of Indian Industry in New Delhi Kondo, senior associate professor of economics at the International Christian University, Tokyo, said Japanes companies should seek to boost their presence in the thriving tertiary industries as India has opened up sectors like finance, retail and applied research industries.

Accordingly, he felt this was an opportune time for Japanese companies to improve their business image in India.

The seminar highlighted that India and Japan can collaborate in biotechnology, pharmaceutical, automobile and information technology. He suggested diversification of bilateral trade and investment. India's strong position during the global financial crisis shows that Japanese enterprises too should use the opportunity and enter the huge Indian market, Kondo said.

He referred to a recent study, which revealed that Japanese companies' Indian operations were more profitable than in other Asian countries. He said that more Japanese companies were planning to expand their operations in India.

Kondo also called for greater participation of Indian small and medium enterprises in the Japanese economy, diffusion of Indian information technology in Japanese commerce, and intensification of Indian BPO operations for Japanese enterprises.

He cited specific instances from the successful Korean investment model in India, which endorses massive initial investments, products based on comprehensive market surveys, and large scale advertisement campaigns.

However, he expressed uneasiness on India's foreign investment patterns, which vest operating decisions on local subsidiary, against the Japanese belief that an active business should negotiate directly with the government and local staff. Further obstructing their business operations are India's complicated taxation system, bureaucratic hurdles, human resource management and inadequate infrastructure, he said.

V K Mathur, chairman of Inapex Ltd, stated that India recognises and appreciates Japan for its technology and work ethics. CII is engaged with Japan in many initiatives like development of SMEs and launching a website. Japan was also the guest country at the recent Indian Engineering and Trade Fair recently organised by CII in Bangalore.

Mathur felt that such initiatives would greatly help in strengthening bilateral trade and economic cooperation between the two countries. He also referred to the huge domestic consumer base within India which is luring many multinationals to set up base here. He said that the opportunities in India surpass the challenges.