Highlights of this Indo japan Trade & Investment Bulletine: Reserve Bank of India and Bank of Japan conclude Currency Swap Agreement, HCL Targets China and Japan for Expansion, Otsuka Pharma and Mitsui Join Hands to Exploit Opportunities in Indian Market, Kotak Mahindra Capital and Sumitomo Mitsui Banking Partner to Tap India-Japan M&A Deals, Hitachi and Panasonic Make India Base for Africa, Middle East and Emerging Markets, Nabtesco Automotive Corporation of Japan forms Joint Venture with UNO Minda, SDS Biotech of Japan Acquires Controlling Stake in Sree Ramcides,Dentsu in Expansion Mode in India, Mitsui PE Acquires Stake in Guardian Lifecare to have a Bigger Pie of the Indian, Pharmaceutical Market

1. Indo-Japan Trade & Investment
Bulletin
December Issue
Japan Desk, Corporate Professionals
2012

2. INDEX
Indo-Japan Trade & Investment Highlights
 Reserve Bank OF India and Bank of Japan conclude Currency Swap Agreement
 HCL Targets China and Japan for Expansion
 Otsuka Pharma and Mitsui Join Hands to Exploit Opportunities in Indian Market
 Kotak Mahindra Capital and Sumitomo Mitsui Banking Partner to Tap India-Japan M&A
Deals
 Hitachi and Panasonic Make India Base for Africa, Middle East and Emerging Markets
 Nabtesco Automotive Corporation of Japan forms Joint Venture with UNO Minda
 SDS Biotech of Japan Acquires Controlling Stake in Sree Ramcides
 Dentsu in Expansion Mode in India
 Mitsui PE Acquires Stake in Guardian Lifecare to have a Bigger Pie of the Indian
Pharmaceutical Market
Knowledge Center
 Pharmaceuticals: The New Investment Magnet

3. Indo-Japan Trade & Investment Highlights
Reserve Bank OF India and Bank of Japan conclude Currency Swap Agreement
Reserve Bank of India (RBI) and Bank of Japan (BOJ) have agreed
to bilateral currency swap agreement against US Dollar for US$ 15
billion valid for next 3 years. The swap agreement aims at helping
Central Banks to swap local currencies for US Dollar to tap each
other’s foreign exchange reserves. The swap agreement will also help the central banks to deal
with short-term liquidity difficulties and in supplementing the existing international financial
arrangements as well as strengthen the mutual cooperation between India and Japan.
HCL Targets China and Japan for Expansion
Indian IT Company HCL Technologies sees major growth opportunities in the large East Asian
markets Japan and China that have largely remained untapped by Indian IT companies. The
traditional drivers of growth of Indian IT companies have been US and Europe. However, HCL
senses huge opportunities in the non-traditional markets in East Asia that the company believes
would help it enter the next wave of growth. HCL has continued to register consistent growth
despite the global slowdown in IT services market and the company believes that the Japan and
China may very well be the next growth drivers Indian IT major has been searching for.
Otsuka Pharma and Mitsui Join Hands to Exploit Opportunities in Indian Market
Gujarat based Claris Lifesciences has entered into a Joint Venture with Otsuka Pharmaceutical
Factory Ltd. and Mitsui & Co Ltd. to tap opportunities in infusion business in India and other
emerging markets. The 60:20:20 JV between Otsuka, Claris and Mitsui will focus on common
solutions, anti-infectives, plasma volume expanders and parenteral nutrition therapies, an area
Claris holds expertise in. The JV is likely to benefit enormously from the manufacturing and
marketing backup of Claris, Otsuka’s global expertise in infusion business and Mitsui’s global
trading network.

4. Kotak Mahindra Capital and Sumitomo Mitsui Banking Partner to Tap India-Japan M&A
Deals
Kotak Mahindra Capital Company Limited (“KMCC”), investment banking division of Kotak
Mahindra Bank, has formed an exclusive strategic alliance with Sumitomo Mitsui Banking
Corporation (SMBC) and SMBC Nikko Securities (SMBC Nikko) to strengthen presence in
cross-border M&A advisory services between India and Japan. Kotak and SMBC had entered
into an MoU in 2010 to cooperate on a number of businesses and the exclusive strategic alliance
is seen as the next step in the same direction to benefit from the increased participation by
Japanese companies in Indian M&As.
Hitachi and Panasonic Make India Base for Africa, Middle East and Emerging Markets
Two of the largest Japanese corporations in India, Hitachi and Panasonic are betting big on India
for growth and have plans to make India base for expansion into Africa, Middle East and other
emerging markets.
Hitachi has announced its plans to invest INR 4,700 crore (INR 47 billion) to build 5
manufacturing plants in India as the company held its first board meeting outside Japan in its 102
years history in Delhi. Hitachi’s ‘India Business Strategy 2015’ targets a three-fold jump in its
revenues to make India one of its largest markets in the world.
Similarly, Panasonic has set an ambitious target of becoming the largest appliance maker in India
by 2018 as the company has been executing its expansion plans aggressively.
Nabtesco Automotive Corporation of Japan forms Joint Venture with UNO Minda
Leading Japanese manufacturer of air-brake components has formed 49:51 JV with India
company Uno Minda, part of the $400 Mn NK Minda Group that has 31 manufacturing facilities
including in Indonesia and Vietnam. Tokyo based Nabetesco specialises in transportation
equipment business and is a leader in automotive air brake systems and clutch control systems.
The JV company will set up a plant in Pantnagar, Uttrakhand which is likely to come into
production in 2014 and will engage in the business of designing, manufacturing of air brake
products for commercial vehicles and clutch products for passenger vehicles.

5. SDS Biotech of Japan Acquires Controlling Stake in Sree Ramcides
Japanese SDS Biotech KK, engaged in the business of research, development and manufacturing
of agricultural chemicals has acquired a controlling stake of 65% in agro input maker Sree
Ramcides for INR 100 crore (approx Yen 1495 million) in a deal likely to be concluded in by
January, 2013.
Sree Ramcides is engaged in the business of manufacturing agro inputs such as herbicides,
insecticides, fungicides, etc.
Dentsu in Expansion Mode in India
Japanese advertising giant Dentsu has been agreessively expanding its operations into India and
inorganic growth through expansions appears to be the strategy so far. The Japanese company’s
Indian arm is reported to be in talks with Network18 to acquire its stake in digitial ad agency
Webchutney in which Network18 holds 70% stake through its financial arms Capital18 Ltd. and
Capital18 Fincap.Dentsu was earlier in news for its acquisition of British ad giant Aegis Group
for $4.9 billion.
Mitsui PE Acquires Stake in Guardian Lifecare to have a Bigger Pie of the Indian
Pharmaceutical Market
Japanese Conglomerate Mitsui Corporation’s PE arm has picked up a minority stake in Guardian
Lifecare, an eight-year-old retail chain of health and wellness stores. The investment by Mitsui
PE in Guardian Lifecare is an interesting transaction from the perspective of Indian Foreign
Direct Investment (FDI) Policy since the multi-brand retail FDI requires to undergo prior-
permission route and is subject to performance requirements.

6. Knowledge Center
PHARMACEUTICALS: THE NEW INVESTMENT MAGNET
The Indian Pharmaceutical industry currently tops the chart amongst India’s science based
industries with wide ranging capabilities in the complex field of drug manufacturing and
technology. India ranks as one of the biggest and technically sophisticated pharmaceutical
markets in the developing world. The pharmaceutical industry plays a pivotal role in the
economic and social development of India by creating employment for a large number of
people and providing access to vital drugs to the large population of India at affordable prices.
CURRENT STATUS AND OPPORTUNITY
The Indian pharmaceutical industry has shown a solid growth in the recent times. Growing at a
compound rate of 10%-11% per annum, the industry has registered growth in key therapy areas,
including anti-diabetics, derma and vitamins, according to data compiled by market research
firm All India Organisation of Chemists and Druggists (AIOCD).
The annual turnover of pharmaceutical products contributes about US$ 21 billion to India’s
GDP; exports account for approximately 65% of this turnover as India exports to most of the
major countries in the world. The Indian Pharma Industry meets around 70% of country’s
demand for bulk drugs, drug intermediaries, Pharma formulations, chemicals, tablets, capsules,
orals and injectibles. The Indian pharmaceutical market is expected to touch US$ 74 billion
sales by 2020 from US$ 11 billion at present, according to a PricewaterhouseCoopers (PwC)
report.

7. REGULATIONS FOR ENTERING INDIAN PHARMA MARKET
Indian government has been pro-active in promoting investment in India’s pharmaceutical sector.
Currently, 100% Foreign Direct Investment (FDI) is allowed under Automatic Route for
Greenfield investments and 100% FDI through Government Approval Route for Brownfield
investments. The Department of Industrial Policy and Promotion’s Fact Sheet on FDI suggests
that the foreign investors consider drugs and pharmaceuticals as the 5th most attractive sector for
investment in India as it has attracted FDI worth US$ 45,516 million during the period of April,
2000 to September, 2012.
Recently, companies have consolidated their position in India through mergers and acquisitions
(M&A). Apart from the preferred consolidation route, companies have also been engaged in
exploiting the opportunities through in-licensing deals with local generic companies.
Apart from a mandatory Drug License requirement, following are some of the important laws
that regulate pharmaceutical industry in India:
1. Drugs & Cosmetic Rules, 1945 (to regulate the import, manufacture, distribution and sale of
drugs)
2. Companies Act, 1956 (for registering Business Entity i.e. Company/ Partnership Firms/
Branch office)

8. 3. Indian Patents Act 1970 (for protecting inventions relating to new drugs)
4. Factories Act, 1948 (in relation to license for carrying out manufacturing activities)
5. Environment Protection Act, 1986 (all the licenses related to environmental matters
including disposal of biomedical wastes, etc and Registration from industrial departments,
Pollution Control Board, Boilers Act, Explosive Department’s license)
The main regulatory body is the Central Drugs Standard Control Organization (CDSCO), which
falls under the ambit of Ministry of Health and Family Welfare. Drug Controller General of India
(DCGI) is the controlling body for CDSCO and is responsible for approval of new drugs and
clinical trials and quality standards. Also, there are State Drug Authorities which grant drug
licenses for manufacturing and licenses for retail trading. Also, Government regulates the prices
for essential drugs through National Pharmaceutical Pricing Authority (NPPA). The Prices for
essentials drugs and medicines are defined under Drug Price Control Order (DPCO). However,
National Pharmaceutical Pricing Policy, 2012 (NPPP 2012) has been approved by the
government on 22nd November, 2012 and notified on 07th December, 2012. Therefore, a new
DPCO (Drugs Price Control Order) will be prepared and notified by the government. The
regulation of prices of drugs in the National Pharmaceuticals Pricing Policy 2012 would be on
the basis of regulating the prices of formulations through Market Based Pricing (MBP). The
prices will be revised every five-year or as and when the National List of Essential Medicines
(NLEM) is updated/revised. However, if there is a significant change in the market structure of a
product, the government will revise the Prices even earlier. This is different from the earlier
principle of regulating the prices through Cost Based Pricing (CBP) under the Drug Policy 1994.
The Department of Pharmaceuticals, which came into existence in 2008, works for the
development of Pharma sector in India. It regulates the complex issues related to medicines
concerning accessibility, availability of the medicines, Research & Development, and protection
of IP Rights related to Pharma industry in India. Clinical Research Organisations (CROs) may
have specific regulations like 21 CFR 11, HIPAA etc. applicable to it.
The 2005 amendment to the Indian patent law has given a major boost to the industry by
introducing pharmaceutical product patents in India for the first time. Since then, patented drug
launches by Indian and foreign companies have been on a rise. The Indian Patent Office is said

9. to have, as per a KPMG report, granted approximately 3,488 product patents between the period
of 2005 and 2010.
The Indian Government has taken a number of initiatives in the direction of promoting
pharmaceutical sector which include plans to set up Venture Capital Fund to boost Pharma
Industry Infrastructure, Pharma Vision 2020 and various other initiatives including Tax
incentives to encourage end-to-end research, innovation and development in the sector.
Moreover, amended patent law, strong growth prospects based on increasing domestic demand,
generic exports and outsourcing opportunities add to investment appeal of Indian Pharma sector.

10. CONTACT US
PANKAJ SINGLA MUMBAI:
Japan Desk, Corporate Professionals 403-404, Churchgate Chambers, 5 New Marine
Lines, Mumbai-400020
DELHI (Head Office)
D-28, South Extension Part - I, New
Tel: +91 22 22624671
Delhi – 110049
Fax: +91 22 22655712
Tel: +91-11-40622200 Email: info@indiacp.com
Dir: +91-11-40622293
Fax: +91-11-40622201 FARIDABAD (DELHI NCR):
Mob:+91-99715-08320 565, Sector-7B, Faridabad, Haryana-121006
Email: pankaj@indiacp.com
Tel: +91 129 4061130
Fax: +91 129 2241017
Email: info@indiacp.com
BEDFORD (UK)
2-4 Mill Street, Bedford MK40 3HD U.K.
Tel: +44 (0) 2030063240
Fax: +44 (0) 2030063241
Email: info@indiacp.com
DISCLAIMER: The entire contents of this document have been developed on the basis of relevant statutory provisions and as
per the information available at the time of the preparation. Though the author has made utmost efforts to provide authentic
information however, the material contained in this document does not constitute/substitute professional advice that may be
required before acting on any matter. The document has been produced only for the informational purposes; the author and the
firm expressly disclaim all and any liability to any person who has read this document, or otherwise, in respect of anything, and
of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.