 "Hiromasa Yonekura")
Hiromasa Yonekura, chairman, Keidanren (Japan Business Federation) says Japanese industry would like further liberation of the economy and fast movement on the pending Goods and Services Tax. Also the chairman of Sumitomo Chemical, he talks to Nayanima Basu on current trade issues. Edited excerpts:
Daiichi-Sankyo’s $5.45-billion acquisition of India’s largest pharmaceutical firm, Ranbaxy, in 2008 has been experiencing several hurdles since. Will it be a deterrent for future such investments?
Of course not. Japanese pharmaceutical companies want to heavily invest here. Rather, we are aggressively scouting for joint ventures and collaborations with Indian pharma firms.
I understand Japanese industry has several complaints against Indian taxation policies, transfer pricing, retrospective tax amendments. There were reports of some Japanese firms moving court on the issue.
Yes, we had, and that’s why we had been urging the Indian government to introduce the Goods and Services Tax. We want the government to bring it immediately. We have been asking the government to resolve inconsistencies in tax collection between Centre and states, rectifying the discrepancy between real profit and assumed profit as regards deemed taxation.
In your meeting with Indian officials this time, did you raise the issue of land acquisition and banking regulations, another problem area for Japanese industry?
We asked the government to simplify land acquisition norms, relaxing restrictions on foreign capital participation to Indian banks, relaxing restrictions on external commercial borrowing.
Foreign investors, including the Japanese, have complained about the government not taking adequate reform measures.
Well, we only want the business environment to improve. You have to liberalise the market further. The government has allowed foreign direct investment in several sectors but not fully opened some. That’s why Japanese retailers are closely watching the developments but not announced any investment plan yet.
Apparently, Japan is also closely watching the political developments in India. What are your views if a BJP-led government comes to power?
We do not comment on the political developments of other countries. However, no matter what government comes in, I don’t think there will be any change in the process of growth and development.
Though the Delhi-Mumbai Industrial Corridor (DMIC) project has been suffering hurdles, it seems you are still keen to invest in India’s infrastructure.
We are satisfied with the way DMIC is progressing. There were problems in land acquisition and regulatory issues but the project is going on well. A project of that scale is bound to have issues. The Dedicated Freight Corridor is also coming up well. Now, we will focus on the Mumbai-Ahmedabad and Bangalore-Chennai economic corridors.
