India’s Prime Minister Narendra Modi’s visit will provide the right impetus for Japanese companies to enhance investments in India and propel bilateral trade between Asia’s two economic giants to 50 billion USD by 2019-2020, according to an Indian industry body.
The success of the recently concluded talks and the special rapport between Modi and Japan’s Prime Minister Shinzo Abe will act as catalysts for enhancing two-way trade between India and Japan, and India is likely to see more Japanese companies entering the Indian market in the next five years.
“We expect that in future Indo-Japan ties would further cement, motivating the latter companies’ number going up from 1,000 to over 1,500 in next five years,” said Sharad Jaipuria, president of PHD Chamber of Commerce.
The two business-friendly leaders who met on September 1 and announced that they were looking to double Japanese investments and number of Japanese companies in India. Tokyo also pledged a 3.5 trillion yen ($33 billion) of public & private investments, including Overseas Development Assistance, to India in a five year period.
These investments will fund India’s ambitious infrastructural development plans, including smart cities and high-speed railways.
Bilateral trade between India and Japan at $16.31 dollars is widely seen as way below the estimated potential. About 1,000 Japanese companies are operating in India in nearly 70 infrastructure projects, including the flagship Delhi-Mumbai Industrial Corridor.
At a meeting organised by the Japan External Trade Organisation (Jetro) and Nikkei on September 2, Modi told Japanese business leaders that, “there is no other place more suited to you than India.”
He added that the two countries were at a precipice of change and opportunity. If New Delhi was looking east, Japan, too, was in looking towards India for an attractive low-cost manufacturing destination.
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