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Japan eyes opportunities in India
By agencies
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Wednesday, 13 July 2005, 19:30 IST
TOKYO: In order to tap IndiaÂ’s huge potential, many of the Japanese companies are eyeing India as the next crucial investment destination.
An analyst stated that India's strengths include its one-billion-plus population, a rapidly emerging rich middle class, well-skilled but still relatively cheap labour and political neutrality with Japan, all of which could offset a shaky infrastructure.
AS per the survey conducted by Toyo Keizai, a business publisher, China remains by far Japan's most favored and heavily invested region in Asia and will likely stay so for some time. Of some, 4,100 Japanese companies operating around the world, more than half do business in China, compared with just 150 in India.
China is also well ahead of India in offering benefits to lure foreign investment, such as special economic zones and good roads and ports. India passed a bill in May to strengthen the legal framework regarding special economic zones in order to give a push to exports and foreign direct investment inflows.
"There are as many markets that could grow as there are diversified needs in India," said Hiroki Fujimori, researcher at Mitsui Global Strategic Studies Institute. "If Japanese firms can find a niche that suits their own business strengths, then more firms will make inroads into the Indian market," he said.
Prospective investment areas include the automobile market, with both production and sales topping 1 million units last year, and mobile phones with 48 million users.
Analysts said information technology is another area where Japanese firms can tap Indian expertise and skilled workers for outsourcing such services as call centers to cut costs.