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Japanese Investment in India
 

Japanese Investment in India

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    Japanese Investment in India Japanese Investment in India Presentation Transcript

    • JAPAN TRADE RELATIONS WITH INDIA, INVESTMENTS AND FUTURE PROSPECTS QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • TABLE OF CONTENT Investments in India Top Countries Investing in India India Advantage Indo-Japan Ties Japanese Investments Areas Attracting Investment Top companies Investing in India JETRO Survey Small and Medium Industries Problems Faced During Expansion Concerns and Opportunities Crosscoop Business Centre Japanese Business Centre Conclusion QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Investments in India India has a conducive foreign investment environment that provides freedom of entry and favorable location Government has done away with the complex pre-entry approvals. FDI through automatic route possible Most investments are made to services sector due to availability of skilled manpower 19 12 7 6 5 5 4 4 4 3 0 5 10 15 20 Services Sector Construction Development Telecommunication Computer Software and Hardware Drugs and Pharamaceuticals Chemicals Power Automobile Industry Metallurgical Hotel and Tourism SECTOR WISE % SHARE OF INVESTMENT QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Top 10 countries investing in India Country (Rank wise) FDI inflows(in US $ million.) August ’91 – Mar ’12 % share of total inflows Mauritius 67,777 37.1 Singapore 17,496 9.6 UK 16,567 9.1 USA 13,014 7.1 Japan 9,146 5.0 Netherlands 7,737 4.2 Cyprus 6,425 3.5 Germany 5,293 2.9 France 3,207 1.8 UAE 2,254 1.2 QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • India Advantage DEMOGRAPHIC FACTORS POLICY RELATED FACTORS ₪6th most attractive investment destinations |KEARNEY Business Confidence Index, 2003 ₪India has the Best licensing regime |KEARNEY ₪India was rated among the most favourite investment destinations|UNCTAD, JETRO, JBIC, Deutsch Bank, EIU etc. ₪Major destination for foreign venture capital funds |Far Eastern Economic Review QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Indo-Japan Ties Japan: 4th Largest Investor More than 1422 Japanese companies Delhi Mumbai Industrial Corridor in partnership with Japan Delhi Mumbai Freight Corridor in partnership with JapanThe major sector of investment: Drugs & Pharmaceut icals Major Japanese clusters in Delhi & NCR Exports automobile s to India ₪Initiatives like ‘Namaste India’ and ‘India Centre’ intend to strengthen the ties between the two countries ₪Major pacts like CEPA and Japan-India Economic Partnership Agreement have been signed for trade and investment promotion ₪Top sectors for future investment ‡ Indian Power Sector ‡ Pharmaceuticals ‡ Civil Aviation ‡ Logistics ‡Biotechnology ‡Nano-technology ‡Agro Processing ‡Clean technology QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Japanese Investments 5,670.40 7,062.98 14,089.09 11559.08 0.00 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00 12,000.00 14,000.00 16,000.00 Rs.incrore FDI Equity Inflows FDI Equity Inflows ₪Out of a negligible number of FIIs, 8-11 of them have entered the Indian market in the past year and a half ₪Japan looking to shift their investment destination from China to India ₪CEPA-Comprehensive Economic Partnership Agreement, aimed at reducing the trade tariffs by 94% between India and Japan QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Areas Attracting Investment From Japan 29% 16% 14% 9% 5% Sectors Attracting FDI₪ Pharmaceuticals is the major sector attracting investments from Japan (Rs. 20,239.75 Crores- Jan’00-Dec’11) ₪RBI branch office at New Delhi received an investment of Rs. 1220.81 Crores ₪Companies like Nissan, Suzuki and Yamaha investing heavily ₪After a policy intervention, services sector is now open for investment QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Top Companies Investing In India TOP JAPANESE COMPANIES INVESTING IN INDIA AMOUNT OF FDI INFLOWS (in Rs. Crore) DAIICHI SANYO CO. LTD 19804.03 JFE STEEL CORPORATION 4,800.72 NIPPON LIFE INSURANCE COMPANY 4238.61 NISSAN MOTORS 1927 MATSUSHITA ELECTRIC WORKS LTD. 1866.55 SUMITO MITSUI BANKING CORPORATION 1366.12 HONDA MOTORS CO. LTD 1200 HITACHI 1159.50 SUZUKI MOTOR CO. LTD. 1000 (through Indian companies, from April 2000 to February 2013) QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • JETRO SURVEY About JETRO(Japan External Trade Organization) JETRO-a government related organization promotes mutual trade and investment between Japan and the rest of the world. About JETRO-Survey Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012 Survey) QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Most of the Japanese companies in India were established after 1996 Improved operating profits in emerging economies forecasted for 2013 A large number of firms planning to downsize their China operations and look to invest in India 87.5% looking to expand in the automobile industry and 83% in wholesale and retail in India Japanese firms put priority on local market development in India rather than developing exports 83.6% firms intend to expand operations in couple of years 62.4% firms expecting an increase in operating profits in 2013 87% of respondents correspond this increase to increase in local market sales Key Findings QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Business Development 67.2% firms would like to employ locally 35.3% firms would like to employ Japanese expatriates Most Japanese firms would like expand their sales capabilities 89.7% cited ‘increase in sales’ as the main reason for expanding India operations 72% see high growth potential in India QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Proportion of Profitable Japanese Firms QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Downsizing in China Increase of costs Difficulty in procuring labour Relationship with clients Tightening of regulations Sales Decrease ₪ China has been a major destination for Japanese investment ₪ According to recent surveys, firms are shifting their base from China to India ₪ Low labour costs, large market and skilled workforce attract investments into the country QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Small and Medium Industries ‡ FIEO and JETRO have joined hands to promote Japanese SMEs in India ‡FIEO in association with JETRO is organizing a three prong strategy to help SMEs of the two nations. † One: Aggressive seminars in metros, plus two tier cities. † Second: Exchange of delegation. Take the SME delegation to Japan and exchange their delegation and then have B2B meeting with them. † Third: Participate in their leading exhibitions Break-up of SMEs in India QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Problems Faced During Expansion Wage Increase Growing market share of competitors Power shortage or blackout Difficulty in procurement of material & rising costs Complicated customs clearance procedures Difficulty in recruiting executive staff Drop in FIIs due to the depreciating rupee QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Bureaucracy is a major deterrent. Concerns and Opportunities India’s growing middle class an opportunity for foreign firms to invest Concerns that plague entry of Japanese firms 83% of Japanese SMEs targeting the middle class 70% middle price range to tap the market 75.2% overall in manufactu ring sectors. 74% in finance and Insurance 85% are concerned about the price competitive ness 66% firms take the local companies as competition 70% firms have prioritize on local market development rather than developing exports to India Product differentiati on Secure and train human resource s QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN
    • Conclusion Japanese investments in India have been on the rise, specially after the souring of ties between Japan and China With the current economic slowdown, the FIIs into the country have come down, but Japanese companies are positive about investing in the growing economy once it stabilizes A Japanese Business centre at a location like Gurgaon is favourable due to it’s proximity with industrial locations like Manesar and Neemrana. Since most of the Japanese automobile companies set up manufacturing units in India, it makes sense for them have their corporate offices in the vicinity Although initially they have their Japanese staff, data shows that most of these companies would like to employee locally. Generally the ratio is 35%:65% Staff, fluent in Japanese, to cater to the needs of these companies in the centre is crucial for business dealings. The staff should also be acquainted with the Japanese work culture to help the companies in the transition process. QUAD BUSINESS SOLUTIONS PVT LTD | GURGAON, INDIA | +91 124 4930776 WWW.QUADGROUP.IN