"Japanese companies view India as growth market"

Trade between India and Japan received renewed impetus after Prime Minister Narendra Modi’s recent visit to Japan. Japan External Trade Organization (JETRO), a government-related organisation that works to promote mutual trade and investment between Japan and the rest of the world, believes that Japanese companies can become a reliable partner in India’s growth journey.
 
As part of this strategy, JETRO established a Japan Zone at the recently held India Chem 2014 exhibition for Japanese companies. The zone presented some of the unique and technologically innovative inventions in the domain of chemical industry.
 
In conversation with Rakesh Rao, Takehiko Furukawa, Director General, JETRO Mumbai, throws light on the strength of Indo-Japan partnership and ways to take this mutually beneficial business relationship to next level.
 
How is the present economic scenario in Japan?
At present, Japanese economy is going through a rough phase. The raise in taxes and depreciating Yen are the major setbacks for the consumers adding to their less income and low interest rates. With respect to companies, the costs are higher because of heavy expenditures involved in obtaining raw materials and the consumption market is shrinking due to predictable aging population. The effective way for the Japanese industry to acquire economic recovery is through industrial and technical collaboration with the growing countries.

What are the advantages offered by Japan for foreign investors?
The Japanese government has lot of incentive programs for promoting the Asian site location. To facilitate the investment in Japan, the government offers appealing incentives, as well as operating single contact points in relevant ministries and agencies for inquires/support regarding doing business in Japan.
 
For example, through the Act of promotion of Japan as an Asian Business Centre, the Japanese government offers support measures, including tax breaks and patent fee exemption, for certified global companies in order to motivate global companies to locate their R&D facilities or regional headquarters in Japan.
 
Individual municipalities in Japan also have their own incentives to promote foothold of foreign companies. They establish those programs in relative strong industries on their own.

JETRO assists foreign companies by providing them with information on the investment environments of regions throughout Japan and help them to arrange and carry out visits to these regions. The information is provided by JETRO's Tokyo headquarters and other domestic offices in cooperation with the national government's regional bureaus of economy, trade and industry, as well as local governments and chambers of commerce and industry. Investment information is provided for each of Japan's prefectures and major cities. There is also information on how to contact JETRO and local government offices, projects in which foreign companies are welcome to take part and the names of such companies already participating, and links to related web sites.
 
Also for JETRO, FDI into Japan is also the important mission as well. As I mentioned, many Indian big business houses have their headquarters located in Mumbai. JETRO would like to approach to the companies, such as IT, pharmaceutical and so on, and encourage them to invest in Japanese companies.
 
How do Japanese companies view the Indian market? Which are the sectors that offer high growth potential for Japanese companies in India?
Japanese companies view the Indian market as one of the growing countries due to the second highest population in the world which is further said to increase by 2025. They believe that manufacturing sector will lead the economy in the near future with other growing sectors like automotives, pharmaceuticals, medical, textiles and, not to forget, chemicals and petrochemicals. Also, there is a huge scope of multi retail sector in India which has a potential for the Japanese retail companies. Indian petrochemical industry is also a potential area of interest for Japan.
 
A large market will be expected to be born in the near future once India's exports expand and domestic consumption explodes. It is also a key industry for Japan to be ranked in the world's third largest exporter following China and USA. The Japanese chemical industry has supported the foundation of the manufacturing sector of Japan by the state-of-the-art technology. With not only production technology in a variety of chemical products sector, but also the established technology connecting to the prevention of global warming, energy saving, the Japanese chemical company could contribute to India in a big way. It is expected for both to have the best matching.

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Which are the sectors/areas where companies / government bodies from India and Japan can mutually collaborate?
Mumbai is home to many of the leading Indian companies. These big business houses have a great influence in Indian business in terms of the network and the capital strength. The big business opportunities can be expected in the combination of the strength between Japan and India.
 
JETRO would like to approach IT, pharmaceutical and so on, and encourage them to have an interest to invest in Japan. Companies believe pharmaceuticals is one of the sectors which have a huge potential to collaborate. However, due to certain regulation issues collaboration between both the countries in this sector is difficult at present.
 
Japanese companies also believe that Indian petrochemical industry offers huge opportunities. A large market will be expected to be born in the near future once India's exports expand and domestic consumption rises.
 
What types of services do JETRO offers in India? What are your future growth plans in India?
JETRO mainly supports SME companies to enhance their business abroad. But not only this, JETRO also assists foreign companies including Indian companies to enter into Japanese market.
 
For example, JETRO Business Support Center, Mumbai (BSCM), is a comprehensive    investment support center to support Japanese companies already operating in the local market as well as those planning to invest in India for a technology partnership. In cooperation with the Government of India and local experts, we provide short-term office space and information consulting services. It provides comprehensive consulting services like provision of investment environment information of India, consultation on overseas practices and consultation on legal and labour, tax, seminars.
 
In addition, we have a business infrastructure support desk in the JETRO office in Chennai to assist Japanese companies for launching their business in India by providing comprehensive information about Indian market.
 
With regards to growth plans in India, I am looking forward to create new business opportunities between Indian firms and leading Japanese companies, including Mitsubishi Chemical, this time. The other four engineering system companies are also looking for business opportunities with Indian companies. These companies have advanced technology for plant and factory construction from Japan.