Industries in Tamil Nadu feel that complex legal and regulatory frameworks come in the way of collaborating with Japanese companies, according to a report.

Industry expectations

The report, An Economic Survey Report – Tamil Nadu, on Indian industry’s expectations from Japanese companies in India, was released by the Indo-Japan Chamber of Commerce and Industry in association with Grant Thornton LLP and AK Mylsamy and Associates.

It covered 122 companies with a turnover of ₹50 crore or above, headquartered in Tamil Nadu and had done business with Japanese companies in the past.

According to the report, most companies feel that Japanese companies rank high when it comes to technology and performance, especially in the manufacturing sector.

Almost 36 per cent of the Indian companies have shown interest in technical collaboration and 45 per cent in establishing joint venture partnerships with Japanese companies, the survey found.

Complex tax system

There is a huge thrust on collaborating with the Japanese on the technology front and Indian companies are willing to go the extra mile to attract them.

This includes the Indian companies’ willingness to adopt their processes and welcoming their collaboration in producing intellectual property, according to the report.

But, the challenge seems to be a complex tax regime in India. More than 50 per cent of the respondents felt that tax regime should be simplified and the regulatory framework improved. The companies also feel that more importance should be given to doing business with India easier.

Contribution to FDI

Tamil Nadu accounts for about 7 per cent of total foreign direct investment to India at ₹1.25 lakh crore between 2000 and 2016.

It ranks second in terms of the number of Japanese companies with 1,457 establishments, next only to Haryana.

The report states that understanding expectations of Indian companies from Japanese counterparts will help in effective involvement.