Bringing&JapanIndiaEconomic& Relations&to&a&New . -
Bringing Japan- ‐India EconomicRelations to a New Height- ‐Prospects & Challenges for the Future- ‐September 4, 2014Embassy of Japan in India1
CONTENTS:- ‐1. Japan- ‐India Economic Relations: Trade, Investment& ODA2. Business Perspectives in Investment to India3. Concerns & Issues Japanese Investors are facing4. Future of Bilateral Economic Relations (PM Modi’sJapan Visit)2
1. Japan- ‐India Economic Relations:Trade, Investment & ODA3
Japan-India Economic RelationsBilateral TradeJapanese FDI to India Trade volume expanded from USD 3.7 Bn in FY 2002 Japan’s FDI increased steadily and rapidly even postglobal financial crisis.to USD 16.3 Bn in FY2013.(USD Million)JapanUSAGermanyFrance Huge trade potentials in future between Japan and3,000India2972(USD Million)2,25020,00017181,500India JapanJapan IndiaTrade 2FY2013（Source） Ministry of Commerce & Industry, Government of IndiaPresence of Japanese Company in India(company)5,00010721100926825725（Source） Ministry of Commerce & Industry, Government of 20062007200820092010201120122013（Source） Survey by Embassy of Japan, New Delhi ( Data for 2006 is as of January, Data for2007 is as of February, rest of years are as of October)
Presence of Japanese Company in India - ClustersDelhi-Gurgaon-Noida Region(376 companies): Automobile, Electric Machinery, Steel,Construction, Steel, FoodMaruti-Suzuki, Honda , Asahi Glass, YKK,Toshiba, Hitachi, Panasonic , NEC, Canon,Nippon Steel & Sumitomo Metal, Yakult , etc. In addition, traditional sectors like generaltrading company (Sogo shosha) and banks arespread over metros (Delhi, Mumbai, Chennai,Bangalore).Mumbai Region(134 companies): Financial, Engineering,Food, Chemical, Electric Machinery,Retailsgoods, Shipping,Daiwa Securities, Nomura, MizuhoSecurities, Sompo Japan Ins.,Kikkoman, Kagome, Suntory, Toray,TOTO, Olympus, K-Line, NYK, MitsuiOSK, etc.Chennai Region(168 companies)：Automobile, Engineering, Electric Machinery,ShippingPune Region(38 companies): Automobile parts, Electronics,Electric Machinery, CommunicationSharp, Kawasaki Motors, Yazaki, NTT Data, etc.Nissan, Isuzu, Komatsu, Toshiba, Panasonic, Omron,Terumo, Mitsui O.S.K. etc.Bangalore Region(154 companies)： Automobile, Electric Machinery, IT &Telecommunication, Logistics, Food,Toyota, Hitachi Construction Machinery, Sony, NTT Data,5Kintetsu World Express, Nippon Express, Nissin Foods, etc.
Overview of the Japan’s ODA LoanAccumulationAnnual Flow・India is the second largest recipient of Japanese・India is the largest recipient of Japanese ODA loanODA loan(totaling 4,456 Bn Yen) in total accumulation.IndonesiaOthers16.0%21.3%for the last 10 years (except for FY 2010)・Committed amount for FY2013 is 365 Bn yenBangladesh3.2%Sri LankaIndia15.1%3.2%Pakistan3.3% ppines8.2%Rank（Source） Ministry of Foreign Affairs, Government of JapanFY 2005134.5 IndiaFY 2006FY 2008India2Indonesia 114.8 Indonesia93.0 China3Turkey98.7 Viet Nam90.8 Indonesia 125.2 Indonesia 106.0 Viet Nam83.24China85.9 Thailand35.5 Viet Nam95.1 Viet Nam97.9 Thailand63.05Viet Nam82.0 Sri Lanka31.6 Iraq79.8 Thailand62.4 Pakistan47.9FY 2009155.5 IndiaFY 20071Rank(Note: Calculated based on E/N base amount among top 30 ODA recipient countries)FY 2004FY 2010184.9 India225.1 India137.1 Iraq160.6 Indonesia 120.6FY 2011FY 2012236.0FY 20131India218.2 Viet Nam86.6 India289.8 India353.1 India365.12Viet Nam145.6 Philippines50.8 Viet Nam270.0 Viet Nam202.9 Viet Nam202.03Indonesia 113.9 India48.0 Indonesia73.9 Myanmar 198.9 Indonesia82.24Iraq87.8 Indonesia43.9 Philippines68.3166.4 Philippines68.75Philippines68.0 Turkey42.160.0 Iraq67.0 Costa Rica56.1BangladeshBangladesh(Note: E/N base amount in BnYen)（Source） Ministry of Foreign Affairs, Government of Japan
2. Business Perspectives in Investmentto India7
Rankings of Promising Countries for Business OperationsMedium-Terms Prospects (next 3 yrs. or so)Ranking2013 1214121617202323Country/RegionNo. ofCompaniesPercentageShare(%)2013 20122013 2012(Total) 488514Indonesia219 215 44.9 41.8India213 290 43.6 56.4Thailand188 165 38.5 32.1China183 319 37.5 62.1Vietnam148 163 30.3 31.7Brazil114 132 23.4 25.7Mexico8472 17.2 14.0Myanmar6451 13.19.9Russia6064 12.3 12.5USA5453 11.1 10.3Philippines3921 8.04.1Malaysia3736 7.67.0Korea2823 5.74.5Taiwan2322 4.74.3Turkey2323 4.74.5Singapore1916 3.93.1Cambodia1213 2.52.5Germany106 2.01.2South Africa103 2.00.6Laos93 1.80.6Copyright 2013 JBIC All Rights Reserved.Q : Name the top 5 countries that you considerto have promising prospectsSurvey targets: Manufacturing companies thathave three or more overseas affiliates※ Percentageshare Long-Terms Prospects (next 10 yrs. or hailandVietnamMyanmarRussiaMexicoUSANo. ofrespondentcompanies(Total e fromlast .7%20.8%18.1%13.1%13.1% 60 79 14 26 4 1410 13113Copyright 2013 JBIC All Rights Reserved.・In the medium term, China falls to4th place for the first time since thissurvey began in 1992.・In the long term, India has been in1st place since FY2010No. of respondents citing country/regionTotal No. of respondent countries8(Source) Results of the JBIC FY2013 Survey: -Outlook for Japanese Foreign Direct Investment (25th Annual Survey)
Positive and Negative FactorsPositive (2013)Indonesia (No.1)India (No.2)China (No.4)1 Future Growth Potential of localmarket2 Inexpensive source of laborFuture Growth Potential of localmarketInexpensive source of laborFuture Growth Potential of localmarketCurrent size of local market3 Current size of local marketCurrent size of local marketSupply base for assemblers4 Supply base for assemblersSupply base for assemblersConcentration of industry5 Concentration of industryBase of export to third countriesBase of export to third countriesNegative (2013)Indonesia (No.1)India (No.2)1 Rising Labor costs2 Underdeveloped infrastructure3 Execution of legal system unclear4 Intense competition with othercompanies5 Difficult to secure management- ‐levelstaff/Labor problemsChina (No.4)Underdeveloped infrastructureRising labor costsIntense competition with othercompaniesExecution of legal system unclearIntense competition with othercompaniesExecution of legal system unclearLabor problemsInsufficient protection for intellectualproperty rightsSecurity/social instabilityComplicated tax system9(Source) Results of the JBIC FY2013 Survey: -Outlook for Japanese Foreign Direct Investment (25th Annual Survey)
Ongoing and Planned major ODA ProjectsDEDICATED FREIGHT CORRIDOR(DFC) In October 2009, yen loan to WesternCorridor commenced. As of today, the totaldisbursed amounts to 231 Bn yen.Pakistan Neemrana SolarPower ProjectDFC EastCorridorDelhiNepalDFC WestCorridor In December 2011, USD 9 Bn Japan-IndiaDMIC facility was launched. In November 2012, Japan and India agreedon 19 prospective projects for Japan'sUSD4.5 Bn DMIC facility.BhutanDMIC (Delhi- ‐Mumbai IndustrialCorridor) ProjectAhmedabadBangladesh Dahej SeawaterDesalinationProjectHigh Speed RailINDIAGas-Fired IPPProjectDELHI-MUMBAI INDUSTRIALCORRIDOR (DMIC)MumbaiKolkataHyderabadThailandBangaloreCBIC (Chennai- ‐BangaloreIndustrial Corridor) ProjectEnnore PortMaldivesCHENNAI-BANGALORE INDUSTRIALCORRIDOR (CBIC) JICA is developing a Master Plan.HIGH SPEED RAIL The Joint Feasibility Study on AhmedabadMumbai route is ongoing.Regional economic cooperation(Enhancing Connectivity)Chennai PortChennaiSri LankaMyanmarRegional EconomicCooperation Project In September 2014, two PMs placedspecial emphasis on Japan’s cooperation forenhanced connectivity and development inNortheast India and linking the region toother economic corridors in India and toSoutheast Asia.10
3. Concerns & IssuesJapanese Investors are facing11
Tax & Other Issues Related to InvestmentTaxExamples:Other Issues12
4. Future of Bilateral Economic Relations(PM Modi’s Japan Visit)13
PM Modi’s Japan VisitTokyo Declaration for Japan-India Special StrategicGlobal Partnership (Excerpt From “Partnership for Prosperity” )14
Future of Bilateral Economic Relations- ‐ “Vibrant India” & Japan’s revitalization- ‐ Complementarity & Synergy- ‐ Holistic approach encompassing privateinitiatives & gov’t supportBilateral Relationship with a greatest potential“Special Global & Strategic Partnership”15
धन्यवाद्Thank you16
s 50.8 Viet Nam 270.0 Viet Nam 202.9 Viet Nam 202.0 3 Indonesia 113.9 India 48.0 Indonesia 73.9 Myanmar 198.9 Indonesia 82.2 4 Iraq 87.8 Indonesia 43.9 Philippine s 68.3 Bangladesh 166.4 Philippine s 68.7 5 Philippine s 68.0 Turkey 42.1 Bangladesh 60.0 I
G. How Investor Relations Has Been Most Helpful to Board of Directors 21 H. How CEOs and Investor Relations Officers Gauge Success of Investor Relations and Investor Relations Incentive Compensation 22 I. Key Components of Effective Investor Relations Programs 23 J. Executives Interviewed 26 About Capital Markets Board 29
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