New Delhi, Nov. 22
A HOST of top-notch Japanese companies are lining up for investments in India over the next three years.
The Japanese Ambassador, Mr Yasukuni Enoki, on Tuesday said companies including Toyota Motor Corporation, Honda Motorcycle, Suzuki Motor (Maruti Suzuki) and Kansai Paints are firming up plans to pump in foreign direct investment (FDI) of at least $1.5 billion in the next three years.
He also said that a high-powered Nippon Keidanren Mission led by Mr Okuda Hiroshi, Chairman of the Board of Toyota Motor Corporation, would visit India from November 27 to December 1.
"We expect the average yearly FDI from Japan to India at $500 million for three years (2005, 2006 and 2007). Apart from this, we have certain unconfirmed projects. If we are to add this, then the annual FDI would be about $600 million," Mr Enoki said at a press conference here.Some of the investment projects under consideration include the setting up of small car project by Daihatsu (likely in 2007) and the expansion plan of Mitsubishi Chemical. He said that Mitsubishi Chemical is looking to expand capacity (in India) for manufacturing purified terephthalic acid (PTA) and for this purpose set up a facility at Haryana with an investment of about $350 million.
Stating that the second phase of Japanese investment boom is now up on India, Mr Enoki said four main factors were driving investments into the country better political climate, enhanced recognition about India's economic fundamentals, some sense of saturation of Chinese market and Japanese companies looking at India as an extension of Asean.
The lion's share of the projects (about 19) planned is in the automobile sector (namely 6 FDI projects) amounting to 125.7 billion yen ($1.1 billion). This includes Maruti Udyog (82.8 billion yen) Honda Motorcycle and Scooter (12.5 billion yen), Hero Honda Motors (12.5 billion yen) and Toyota Motor Corporation (15 billion yen).