Japanese companies are keen to invest in India's manufacturing sector following the boom being witnessed in this country in the automobile, consumer durables and construction space, chairman and CEO of Japan External Trade Organisation Osamu Watanabe said Thursday.
Leading a 73-member business mission to India, mainly belonging to SMEs, the first in five years, Watanabe said interest towards India is growing rapidly in Japan over the last three years.
He said India is moving in the right direction in attracting foreign direct investment but said remnants of license-raj in terms of bureaucratic, labour and regulatory and licensing-related hassles are still around.
Watanabe was quick to add that during their meeting Prime Minister Manmohan Singh in New Delhi earlier this week, the latter said the government expects economic growth to continue at the rate of of 7-8 per cent or even higher in the next 3-5 years, more SMEs are welcome in the manufacturing sector and that India is thinking of taking more steps to attract FDI in manufacturing sector.
"We see quite a bright future (for Japanese investment in India)," he said. Watanabe said while there is a "feel-good factor" as far as bilateral relations in general is concerned, economic relations are not up to the potential. He noted while Japanese FDI into China is four per cent and into ASEAN 12 per cent, it's a mere 0.3 per cent in case of India in aggregate numbers.
Japanese companies are looking to outsource IT work to India as also opportunities for joint ventures, he added.
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