As the government prepares for Prime Minister Narendra Modi’s visit to Tokyo, manufacturers and investors in Japan have flagged the current state of Indo-Japan infrastructure projects, as well as financial regulations that are hurting the prospects of more Foreign Direct Investment (FDI).
In a letter available with The Hindu , the president of the Japanese Chamber of Commerce and Industry in India has written to Commerce Secretary Amitabh Kant, seeking “urgent intervention to resolve the issues” in areas including India’s “tax system, banking sector, logistics and distribution segment, visas and the pivotal infrastructure sector.”
More than 35 suggestions have been handed over to the government relating to the delays and roadblocks in Japanese investment in India. In particular, the demand relates to expediting infrastructure projects for which Japan has committed more than $100 billion, like the Delhi Mumbai Industrial Corridor (DMIC) and the Chennai Bangalore Industrial Corridor (CBIC), where feeder roads to be built by the Central and State governments, are delayed. “The greatest roadblock we face is the lack of coordination and cooperation between the government in New Delhi, and the State governments for these projects,” a Japanese official told The Hindu .
One of the major concerns for New Delhi and Tokyo has been dipping bilateral trade. Trade declined sharply in 2013 to $16.31 billion, from $18.43 billion in 2012. Japanese FDI to India has dipped from a high of $2.09 billion in 2011-12 to $1.3 billion in 2012-13, says the RBI. However, the silver lining for Japanese investors has been the raising of the FDI cap in the insurance sector to 49 per cent.
