The Hindu Business Line : `Investment key to expand Indo-Japan trade ties'

MR Kenji Shimizu, Consul General of Japan in Kolkata, said here that his country's comparatively poor trade performance with India may be partly attributed to the bad shape of the Japanese economy and partly to India's commodity-oriented export structure.

He felt that strengthened investment would be conducive to trade expansion, because increased investment had contributed a lot to expansion of trade between Japan and the emerging economies in Asia. "Investment is a key to promoting stronger and deeper economic relations between Japan and India." Infrastructure improvement, he felt, was a pre-requisite for further economic development. "Japan would like to contribute in this area by providing ODA."

Except for a period during the 90s, Japan has continuously been the largest bilateral donor for India since the late 1980s, and assistance has been extended to such priority areas as power and transportation, poverty eradication through rural development and environmental improvement.

Speaking at an interactive session on `Indo-Japanese business opportunities' organised by the Bharat Chamber of Commerce here, the Consul said the trade between the two countries could be increased, provided more attention is given to the Japanese market through extensive study of the needs of Japanese consumers.

He said Japan, with a very high level of purchasing power, had great, untapped potential. He felt the Indian market could be more liberalised and could adopt more transparent policies based on market-oriented and/or market-friendly competition. The current complementary trade structure could be shifted to a more value-added and diversified one for India.

Mr Shimizu said though at present the foreign direct investment to India from Japan was the fourth largest after the US, Mauritius and the UK compared with Japan's experience with China, Japanese investment in India ought to have been more impressive. This is certainly not in keeping with the fast growing trend of government-to-government relations.

He said in 1997, Japanese investment in India touched more than $500 million annually, but this declined to $150 million in 2002 owing to the nuclear test imbroglio. He clarified that once depressed, it would take some time for the Japanese sector to regain its confidence in the Indian market. India, he pointed out, was now emerging as a strong economic power, with a vast consumer base of one billion people, besides possessing a first class software industry.