A NCAER-PRI Dialogue

Copyright © 2016 JETRO. All rights reserved.

Tomofumi Nishizawa

Japan External Trade Organization (JETRO)

December 20th, 2016 While JETRO does its utmost to provide accurate information, it is up to the individual reader to verify the information provided and decide whether to take action based on it within his or her own cognizance.

A NCAER-PRI Dialogue


1. What is JETRO? 2. Overview of Japanese Companies in India 3. Hints for Success in Indian market

2

3

JETRO’s Overseas and Domestic Network

75 Overseas Offices

45 Domestic Offices

Copyright (C) 2016 JETRO. All rights reserved.

JETRO’s Network in India

New Delhi

Mumbai

Bengaluru

JETRO NEW DELHI 4th Floor, Eros Corporate Tower, Nehru Place, New Delhi 110019, INDIA Tel：+91-11-4168-3006 Fax：+91-11-4168-3003

JETRO Ahmedabad Project Office

No. 306-B, Pinnacle Building, Corporate Rd, Prahlad Nagar, Ahmedabad, Gujarat,

Tel：+91-79-4019-2121 FAX:+91-79-4019-2128

JETRO MUMBAI Naman corporate Link, 2nd Floor, Plot no C-31 & C-32, G Block, Bandra, Kurla Complex, Bandra East, Mumbai-400 051,INDIA Tel：+91-22-4201-0900 Fax：+91-22-2659-7260

JETRO BENGALURU 10th Floor, Tower B, Millenia Towers, Ulsoor Lake, Bangalore 560 008, INDIA Tel：+91-80-4113-8168 Fax：+91-80-4113-8169

JETRO CHENNAI Seshachalam Centre 8F , 636/1 Anna Salai, Nandanam, CHENNAI - 600035 INDIA Tel：+91-44-3927-0100 Fax：+91-44-3927-0190

Chennai

Ahmedabad

4

JETRO supporting India through 5 locations


(1) Promoting Overseas Japanese Business Activities

Foreign business

missions and seminars

SME overseas expansion

platforms, and consulting

services

Developing and utilizing

global human resources

5

Promoting Business between Japan and Foreign Countries


(2) Connecting Foreign Companies and Governments with Japan

Hosting foreign business

delegations and

(co)organizing investment

seminars

TTPP(Trade Tie-up

Promotion Program) helps

to find your potential

business partners

Building Relationships

“Japan – India

Innovation Seminar” in

New Delhi (Dec. 2015)

https://www.jetro.go.jp/ttppoas/index.html

6 Copyright (C) 2016 JETRO. All rights reserved.

Promoting Business between Japan and Foreign Countries

(Sep. 2014 @ Tokyo)

(Sep. 2015 @ Tokyo)



Recent Activities : AP Public-Private Committee Delegation

Date: 22nd to 25th of May, 2016

Place: State of Andhra Pradesh (Vijayawada, Amaravati and Chittor), India

Representatives : State Minister of Economy, Trade and Industry, Mr. Yosuke Takagi

Executive Vice President, JETRO, Mr. Shigeki Maeda , VIPs from Private Sectors

Objective: Industrial Cooperation & Investment Promotion, New Capital City & Infrastructure Development


<Andhra Pradesh Public-Private Joint Conference @ Vijayawada on 23rd May>

<Site Visit @ Amaravati on 24th May>

8

Recent Activities : Collaborating with the Indian IT Industry


Explore the brand-new business opportunities based on the idea of “India – Japan

IoT Investment Initiative.”

India-Japan IT-BPM Business Forum @ New Delhi , April 30th 2015

“India – Japan IT Innovation Seminar ” @ Tokyo, June 15th 2016

JETRO Supported

projects 14,000

More than

1,400 Foreign companies’ startups

over

India: 27 companies

Investment projects supported by JETRO (2003～2015)

United States 411

China 151

Germany 120

Republic of Korea 96

United Kingdom 85

France75

Australia 46

Singapore 45

Taiwan 43

Hong Kong 41

Others 292

Copyright (C) 2016 JETRO. All rights reserved. 9

Etc.

http://pvmsys.com/

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwixyMTn2vjQAhXEVbwKHVYcAlYQjRwIBw&url=http://www.meti.go.jp/policy/investment/&psig=AFQjCNGXJ2C1O-I1O5Vje-IghT7NZwAJdw&ust=1481977568613378



10

Japanese companies growing in India： 1,229 companies ( 4,417 sites )

Delhi Territory (145)

Maharashtra (203) Mumbai: Pune:

Haryana (305)

Gujarat (27)

Rajasthan (43)

Uttar Pradesh (46)

West Bengal (19)

Telangana (23)

Tamil Nadu (192)

Karnataka (182)

Source: Japanese Embassy in India/JETRO New Delhi ( as on October, 2015)

Andhra Pradesh (10)


According to “List of Overseas Japanese Companies (2014)” published by Toyo - Keizai, out of 120 companies which were established in India during 2012-2014, JETRO supported 109 companies (nearly 90% of the total) by consultation and feasibility studies.

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjQ4-_C8vHMAhUi2KYKHU3mBt8QjRwIBw&url=http://www.brand-yurai.net/detail/%E3%81%BF%E3%81%9A%E3%81%BB%E3%83%95%E3%82%A3%E3%83%8A%E3%83%B3%E3%82%B7%E3%83%A3%E3%83%AB%E3%82%B0%E3%83%AB%E3%83%BC%E3%83%97.html&psig=AFQjCNGcWcOIU_MQoDSAxRxmgMdm4zwR1g&ust=1464151233138349

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjVv_Lt7PHMAhVGkJQKHdluCQkQjRwIBw&url=http://www.eisai.co.jp/company/profile/history/logo/index.html&psig=AFQjCNHBwXF4Osvwl8SmpQ1KOmnwVL9mTw&ust=1464149712517420

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi8vpHv0_HMAhXiLKYKHZ_tAUEQjRwIBw&url=http://www.kikikanri.biz/2012/search/index.php@p%3Ddetail%26id%3D140.html&psig=AFQjCNGKlT90tIFdMt19YDfta-lLfqq1lA&ust=1464142992035606

http://www.yakult.co.jp/english/index.html

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjkpsbq1PHMAhVlLaYKHQdlDO8QjRwIBw&url=http://www.businesswire.com/news/home/20160328005298/ja/&psig=AFQjCNF7cDcg2Vg2jSMem1kAicGG03CXpw&ust=1464143256215977

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjWj5eO1vHMAhULP48KHcxUDRYQjRwIBw&url=http://blog.goo.ne.jp/hikarishokubai-2009/e/a31fcbc706851fae5c177ceaa2da1773&psig=AFQjCNF1XHdfWs1qHlsYrFoJhquNWU3zwA&ust=1464143606069315

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwiB8oyb1vHMAhWGPo8KHTBABywQjRwIBw&url=https://ja.wikipedia.org/wiki/%E3%83%87%E3%83%B3%E3%82%BD%E3%83%BC&psig=AFQjCNFujc8oFLofKTAfap1wPmFDFeaPbQ&ust=1464143633296429

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjnt5Gy1vHMAhUeSI8KHa9dA3AQjRwIBw&url=http://kabuka-yosou.blog.jp/archives/1027187869.html&psig=AFQjCNH2p-2jYlU0iNCL2eGYaMxP08No2A&ust=1464143678941981

http://www.nidec.com/ja-JP/corporate/about/slogan/

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwigvMiF1_HMAhUCM6YKHaTGDZMQjRwIBw&url=https://commons.wikimedia.org/wiki/File:TOTO_logo.svg&psig=AFQjCNE7SKZOgb_4TuOKYdd-YXHnL_xuxg&ust=1464143856691038

http://www.mhi-global.com/index.html

http://jp.vector.me/browse/27288/kyb

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwiZxfnO1_HMAhUhM6YKHbb0AhYQjRwIBw&url=https://www.recme.jp/company/kagome/&psig=AFQjCNGkbnFphMMja4MNemBcK76KatvOoA&ust=1464144010617339

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjrlffZ1_HMAhVnlKYKHaO8C90QjRwIBw&url=https://ja.wikipedia.org/wiki/%E9%87%8E%E6%9D%91%E8%AD%89%E5%88%B8&psig=AFQjCNGunx1KeBsCDzGFnLzMxeiubh2tCw&ust=1464144033640927

https://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwieotW52PHMAhUhGKYKHR0dAzEQjRwIBw&url=https://www.tyresnmore.com/brands/bridgestone-tyres.html&psig=AFQjCNGgR6q6HQGSitE5VE_VbMxPM8UUgQ&ust=1464144231608166

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiOicTc2PHMAhUj4aYKHWHPAHUQjRwIBw&url=http://jp.misumi-ec.com/vona2/maker/misumi/&psig=AFQjCNE0dgQifgWwpuc9_mHc9IdqVxvmBA&ust=1464144305453345

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwiE8Yee2fHMAhWh5aYKHSBPBcMQjRwIBw&url=https://www.yazaki-group.com/&psig=AFQjCNEe1iFDeBgODaAGQ3siQ9wA6Ueg3Q&ust=1464144444979551

http://www.exedy.com/en/index/

http://www.sws.co.jp/en/index.html

http://www.nssmc.com/en/index.html

https://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiE_tuv3PHMAhWm2aYKHW7YB0cQjRwIBw&url=https://www.nri.com/jp/&psig=AFQjCNHC5yjAZkiukqDCIue1WaISc7WTXw&ust=1464145254608068

http://www.tomoegawa.co.jp/index.html

http://www.fujioil.co.jp/fujioil_e/index.html

http://www.google.co.jp/url?sa=i&rct=j&q=&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwiB_76Y7fHMAhUDLaYKHYNvCR8QjRwIBw&url=https://ja.wikipedia.org/wiki/%E7%A5%9E%E6%88%B8%E8%A3%BD%E9%8B%BC%E6%89%80&psig=AFQjCNHV_ScrVNc9up3daHMH3v2aFbT5UQ&ust=1464149801887994

http://www.shachihata.co.jp/index.php

http://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjojoOC8vHMAhWHIqYKHf3EDu8QjRwIBw&url=http://www.entreplanet.org/about/supporter.html&bvm=bv.122676328,d.dGY&psig=AFQjCNGw3NXcPWQeGTXqTj9vxOSqIh25_A&ust=1464151092883247

https://upload.wikimedia.org/wikipedia/commons/c/c1/Ajinomoto_logo.svg


Automobile Industry

Speed up “Diversification”

Collaboration with local company (JV and M&A)

Set up R&D Facilities

Cost competitive products specially designed for India

Very few Japanese SMEs

Challenges on Infrastructure

Japanese companies growing in India

248 276 362

550

627 725

812 926

1,038 1,156

1,229

298 352 450

838

1,049

1,236

1,422 1,804

2,503

3,881

4,417

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Number of Companies

Number of Bases (incl. Salesbranches etc.)

Time series data on number of Japanese Companies in India

12


Advantages and risks in investment in India

13


Operating Profit Forecast

14

Only 50% of Japanese companies seeing profit in India. Among companies active for 10 or more years since establishment, near 70% seeing profit.

Source: 2015 JETRO Survey on Business Conditions of Japanese Companies in Asia and Oceania


Future Business Plan（1）

15


Nearly 75% of Japanese companies in India plan to expand their business in 1 to 2 years.


Future Business Plan（2）

16


India always tops in 8 years on the proportions of firms expecting to expand their business in the next 1 to 2 years.

EXPORT is Keyword – Japanese Companies in India

<JETRO Survey on Business Conditions of Japanese Companies in Asia and Oceania>

To understand the current business activities of Japanese-affiliated companies operating in Asia and

Oceania and to disseminate those findings widely. Valid response: 4,635 firms from 20 countries/regions


Export sales of Japanese companies in India is the lowest in Asia


Keyword : EXPORT – Japanese Companies in India

Business strategy of Japanese Companies in India is gradually changing. “Export from India” is a Key to earn profits and maintain their production base.

EXPANDING

SHRINKING

Reference : JETRO Survey on Business Conditions of Japanese Companies in Asia and Oceania


Procurement of Raw Materials and Parts(1)


Local Procurement Ratio is still less than 50% in India. Almost same result as last year.


Procurement of Raw Materials and Parts(2)


India is not so competitive with regard to Wages. In most categories, the wage in India is almost similar to China or Thailand.


Wages -Monthly Base salary-




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23

“Look West” with the strategic partnership between India and Japan



Japan Industrial Townships

April 2015, METI Minister Miyazawa and Ms. Nirmala Sitharaman, Minister of State for Commerce and Industry, singed the Action Agenda for “India-Japan Investment and Trade Promotion and Indo Pacific Economic Integration”. The Action Agenda included mutual approval of the identification of 12 candidate sites for Japan Industrial Townships (JITs).

New Delhi

Mumbai

Bengaluru

Chennai

Ahmadabad Areas between the south border and Krishnapatnam Port, Andhra Pradesh

Ponneri, Tamil Nadu One Hub Chennai, Tamil Nadu Sojitz – Motherson, Tamil Nadu

Jhajjar, Haryana Integrated Industrial Township, Greater Noida Uttar Pradesh

Neemrana, Rajasthan Ghilot, Rajasthan

Supa, Maharashtra

Mandal, Gujarat Pithampur, Madhya Pradesh

Tumkur, Karnataka


Japanese Industrial Zones

Rajasthan （Neemrana、Gilot）

Maharastra（Supa）

Gujarat （Mandal）

【Japanese Industrial Zone】 Based on the MOU with JETRO and State Government *State Government provides specific industrial land only for Japanese Companies. *JETRO promotes these land on behalf of the state government and forms Japanese Industrial Cluster. After starting manufacturing, JETRO continuously supports their operation with the State Government.

Industrial Park developed by Japanese Companies

Tamil Nadu (Chennai) OneHub Chennai Sojitz Motherson Industrial Park Mahindra Industrial Park Chennai

Japanese Industrial Zone


（Source: RIICO) ：Available

Neemrana Japanese Industrial Zone (Rajasthan)

46 Japanese factories are already operational in the industrial zone as of December 2016. Japanese SMEs are also having manufacturing base in this zone.


(Photos) Neemrana Japanese Industrial Zone


Mandal Japanese Industrial Zone (Gujarat)

Phase 2 (Under Construction)

5 Japanese factories (including 1 Rental Factory) are already operational.


(Photos) Mandal Japanese Industrial Zone

Major Challenges in Doing Business in India

• Complicated Tax System - Goods and Service Tax (GST) should be introduced at the earliest - Simple and Reasonable operation on Minimum Alternative Tax (MAT), Permanent Establishment (PE) and Transfer Pricing (TP).

• Inadequate Infrastructure - Reform on present “industry- unfriendly” Land Acquisition Law. - Upgrade the major road and port connectivity, quality and quantity of power supply and Industrial Park

• Administration Procedure - Relaxation on External Commercial Borrowing (ECB)

- Relaxation of mandatory certification of IS for steel products etc.

Reference : Suggestions for Government of India by Japanese Chamber of Commerce in India (JCCII) 2016, etc.


A NCAER-PRI Dialogue

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