India, Japan Plan Virtual Biz Meet to Bolster Trade, Investments

Taking forward the recent initiatives to strengthen bilateral trade and investment ties, India and Japan are planning a virtual business partnership meet with the possible participation of Prime Minister Narendra Modi and his Japanese counterpart Yoshihide Suga later this month or early May.

“The two sides are tentatively considering April 30 or May 1 for the business meeting but it also depends on other factors including the dates for the Japanese PM’s proposed India visit,” a source told BusinessLine.

Brighter prospects

India’s prospects as a destination for additional Japanese investments brightened last year when Japan decided to provide subsidies to Japanese manufacturers for shifting their manufacturing setups from China to not only ASEAN countries, but India and Bangladesh as well.

“Now that the Japanese government is looking at doubling the budget for the subsidies to incentivise its manufacturers to shift from China, from the existing ¥23.5 billion, even more investments can flow into India,” the source said.

The business meet, which will be supported by the Trade Ministries from both sides, is being organised by industry associations such as the Japan External Trade Organisation (JETRO) and the CII, the source said.

Investments

Japan is the fifth largest investor in the Indian economy with cumulative FDI inflows of $34.5 billion in the April 2000 to December 2020 period accounting for 7 per cent of total FDI inflows in the same period. Some of the prominent Japanese investments in India include Maruti Suzuki, Uniqlo, Mitsubishi Group, Mitsui and Honda. There are also important Indian investments in Japan from companies such as Infosys, TCS, HCL, Oyo, SBI and Sun Pharma.

India has already drawn up a tentative list of Japanese companies that could channelise their investments into India, taking advantage of the Japanese government’s subsidy scheme and is looking at ways to woo them.

New Delhi is also keen on a review of the India-Japan Comprehensive Economic Partnership Agreement (CEPA) to improve market access for Indian goods and check the growing bilateral trade imbalance, in Japan’s favour, since the pact was implemented in 2011.

“Attempts are being made to ensure that both the Japanese and the Indian PMs can address the business meet, but the programme is tentative at the moment as the Japanese PM’s travelling plans are being finalised,” the source said.

Suga is likely to visit India the end of April, following his US visit earlier in the month, but a lot also depends on the Covid-19 situation in India. “The Japanese PM is very keen to visit India after his US visit as he wants to strengthen the `Quad’ initiative, between India, Japan, the US and Australia, that was strongly supported by his predecessor Shinzo Abe. However, the rising wave of the pandemic is a concern,” the source said.

Source: Business Line