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India becomes most promising investment destination for Japanese companies

| Economy & Markets, India | 01/16/2015

Japan invest India

India becomes most promising investment destination for Japanese companies
Date: Jan 16, 2015
Source: The Dollar Business – by Sai Nikesh D

India is the top destination for future investments, followed by Indonesia and China, for the Japanese manufacturing sector, according to a recently concluded survey by the Japan Bank for International Cooperation (JBIC) conducted on 1,021 Japanese manufacturing companies last year.

“For the first time since this survey began (in 1989), India with high expectation for its market expansion ranked 1st place. It received responses from a wide range of industries, including automobiles, chemicals and electrical equipment & electronics,” said the JBIC report. Compared to 213 companies in 2013, 229 Japanese companies voted in favour of India last year and said that India was the best destination for investments in the medium term or in the next three years.

The survey is considered as a measure of prevailing trends as well as future outlook of overseas business operations by Japanese manufacturing companies with an extended record of overseas business. This year’s survey included additional individual themes such as “competitiveness of Japanese manufacturing companies and trends in global production system” and “involvement of Japanese manufacturing companies in overseas infrastructure-related business”, said JBIC.

The importance of overseas business is increasing for Japan and with overseas production and sales ratios estimated at 40% level respectively, overseas investments play a key role in the Japanese economy. About 80% of companies that took part in the survey plan to expand their overseas business.

According to India’s Ministry of Commerce, the presence of Japanese companies in India is on a rise. It said that by October 2014, the number of Japanese companies in India reached 1,209, which is 13% higher over the same period last year, with a Compound Annual Growth Rate (CAGR) of 13.67% for the last five years (2010 – 14)).

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