Interest in India is substantially on the rise in Japan, with India’s ‘Make in India’ campaign and reciprocal visits by Prime Minister Modi and Abe. The number of Japanese companies entering India has gone up by 15 percent in the past year. Building on this momentum, India and Japan have set ambitious goals. Under the India-Japan Special Strategic and Global Partnership, the two prime ministers have talked about realizing 3.5 trillion yen of public and private investment and ODA, and a doubling of the number of Japanese companies in India in just five years. Many have heralded this as a special moment in India’s relationship with Japan. This dialogue by video conference between NCAER and Japan’s Policy Research Institute, a part of its Ministry of Finance, focused on India’s investment climate and ways of improving. It followed the first NCAER-PRI Delhi Dialogue in February 2015 in New Delhi and is part of the work envisaged under a three-year Memorandum of Intent signed by NCAER and PRI in January 2015. The MOI seeks to foster joint work and greater collaboration in enhancing economic relations between Japan and India.
This dialogue dealt with key issues built around four presentations relating to the investment climate in India. From Tokyo, Professor Takahiro Sato, Research Institute for Economics & Business Administration, Kobe University, presented the results of a survey on “Business Environment for ‘Make in India’ by Japanese Firms”. He highlighted the availability of skilled human resources as the main impediment for Japanese companies in India. Mr Takahiro Tsuda, Senior Deputy Director of the Research Division, International Bureau, Ministry of Finance, spoke on the “India’s Investment and Financial Regulations: Policy Dilemmas and A Possible Way Forward”. Mr Tsuda drew attention to a set of policy dilemmas faced by Indian policy makers regarding FDI and FPI Investment, Priority Sector Lending and Insurance in India.
From New Delhi, Professor Ram Singh, Delhi School of Economics, delivered a presentation on “Land Acquisition Issues in India”. Prof Singh noted that land acquisition is not as big an issue as it is made out to be and the real problem is the way in which the law is implemented. Mr Parveen Kumar, Partner and Director, ASA & Associates, talked about “Compliance and the Tax Environment in India: A Cake Walk or a Daunting Task for Japanese Corporates?” He provided a broad overview of tax regime in India and noted that Indian labour laws should be made more transparent.
The presentations were followed by a rich Q&A session moderated by Mr Daikichi Momma, President of PRI, with useful questions from New Delhi led by Dr Shekhar Shah, Director-General of NCAER, and followed by perceptive comments and questions from Tokyo. The Dialogue was attended in New Delhi by NCAER researchers and other invited participants, including officials from the Ministry of External Affairs and the Department of Industrial Policy and Promotion in the Ministry of Commerce and Industry.