It is no secret that India is emerging as a key business hub and many foreign companies including US tech giant Apple are looking to invest and setup manufacturing hubs in the country. Even many Japanese companies have their businesses in India but they are unable scale as much here as in other ASEAN countries, External Affairs Minister Dr S Jaishankar has said.
Jaishankar is of the view that while they have their businesses here too, Japanese firms make far more serious investments in other ASEAN countries and China compared to India. Pointing this out, the EAM also listed out a few reasons behind this.
There were a number of reasons for this. I think partly the enabling environment did not meet Japanese expectations which essentially meant that the Indian system did not particularly make an effort to get Japanese businesses in,” EAM Jaishankar said at India Today’s Indo-Japan Conclave 2022.
Indicating that there were infrastructure and cultural issues as well, Jaishankar noted that Japanese businesses came up against Indian businesses and competed in key segments. While there has been a rise in Japanese investments in India, they haven’t translated into greater trade, the minister further highlighted.
“Japanese investments in India is different from Japanese investments in China and ASEAN. The investments here do not go back to Japan in the form of product. But their investments in China do,” he said at the event.
Jaishankar credited late Japanese PM Shinzo Abe for the strategic outlook that Japan started approaching India with. “Perhaps the first change I would argue is that Japan started approaching India with a strategic outlook and for this, I would say that Prime Minister Shinzo Abe was particularly and personally responsible.”
Abe was trying to prepare Japan for a bigger role and to secure its own interests more nationally due to the late Japanese Prime Minister’s non-traditional approach towards international relations. Jaishankar said, “In his (Abe’s) view, a Japan which goes out in the world needed more partners, reliable partners, and India fitted the bill.
In recent years, economic relationship between Japan and India have steadily expanded and the volume of trade between the two countries has risen. India was the 18th largest trading partner for Japan, and Japan was the 12th largest trading partner for India in 2020. Japan was the 4th largest investor for India in FY20, according to Ministry of Foreign Affairs of Japan.
Meanwhile, India and Japan set an investment target of $5 trillion yen ($42 billion) in the next five years, PM Narendra Modi and Japanese PM Fumio Kishida had announced after a meeting in New Delhi for the 14th annual summit in March.
