More Japanese firms prefer India for future expansion

January 26, 2015 11:34 pm | Updated 11:34 pm IST - CHENNAI

More and more Japanese firms prefer to make future investments in India than China as the latter is becoming less attractive, said Yoshihiro Watanabe, former Senior Managing Director of the Bank of Tokyo-Mitsubishi UFJ Ltd.

Drawing a comparison between India and China, he said currently India had 1,209 Japanese firms, while it was over 20,000 units in China. Besides, good number of small and medium Japanese firms in China had sales revenue of $1 billion and a sizeable market share.

Majority of Indian firms also had revenue of over $1 billion, but the market share was less.

“When we entered China it had so many trade policies that facilitated exports. Japanese products made in China were sold globally and also in the domestic market. However, China has started losing attractiveness due to rising cost of inflation and lack of human resources. India has abundant pool of human resources and the inflation is reasonable. The foreign exchange ratio of yen versus rupee has remained stable and attractive for us to invest here,” he said.

According to him, Japan imported more products from China and exported less to Japan. However, it was vice versa in the case of India. Therefore, he urged the Japanese firms based in India to go in for value addition and export the products to Japan, Asean, East African and Middle East countries.

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