Infrastructure​ biggest bottleneck for investment​: Japan Minister Nishimura

Interview with Yasutoshi Nishimura Minister of State, Cabinet Office, in Japan Prime Minister Shinzo Abe’s Cabinet.

November 10, 2014 08:03 pm | Updated November 11, 2014 03:29 pm IST

Yasutoshi Nishimura, Japanese Minister of State, Cabinet Office. Photo: Sushil Kumar Verma

Yasutoshi Nishimura, Japanese Minister of State, Cabinet Office. Photo: Sushil Kumar Verma

At your speech in New Delhi, you spoke about the investment climate in India, and raised your concerns. What do you think should be the priority for the Modi government to improve the climate?

I would like to start with the perception of the Japanese people, which has changed because of the strong leadership of Prime Minister Narendra Modi. We very clearly see the government’s desire for promoting and encouraging investment. In fact many companies are thinking once again of investing in India. What they have been asking for is an improvement in administrative procedures in India. PM Modi responded in the joint declaration signed with PM Abe to set up a Japan-plus desk, a help desk, which will respond as a single-window system to all issues that companies may have. We now have a lot of expectations for this desk at DIPP in the Commerce Ministry and hope that more such decisions to help environment will be taken.

Our other concern is the provision of infrastructure. This is the second major issue that has to be tackled. This includes power, electricity and the transport network. The cold chain is very important. One study says about 40% of India’s agricultural produce goes waste due to non-availability of cold chain systems. The agricultural produce is 15% of India’s GDP, so it is a huge figure. Better systems would help promote agriculture, as well as the food processing industry to bring in investment.

Are these time-bound expectations? Japan has taken a lead in announcing investment for India this year, and PM Modi’s government has already completed six months. Is there a deadline for these reforms?

I don’t think there is any reason to lose hope. There are many reforms that are required, and I don’t think any government can produce these overnight. So long as there is a step by step forward movement, I think the expectations can be reached. Japanese companies will move forward with investment, but only if there is a visibility with regard to these reforms.

PM Modi’s visit was marked by $35 billion in investment commitments. Specifically, where would the Japanese government expect these to come from?

Firstly, I would like to clarify that this figure of 3.5 trillion yen is private and public investment combined, for a period of five years. The amount would cover many things, including the Delhi-Mumbai Industrial Corridor (DMIC), metro transports, bullet train high-speed railway and such projects. It also includes assistance to power generation industry. As the infrastructure investment shows results, we expect that private Japanese investors will also take an interest. In particular, we want to support PM Modi’s ‘Make in India’ programme.

In a previous visit by Manmohan Singh too Japan had committed upto a $100 billion, including on the DMIC, but much of that investment has not been able to come in, partly due to procedural problems…. Are you worried about the danger of bottlenecks you have spoken of here as well?

We have promised this 3.5 trillion yen in private and public investment with the hope they will be completed. But one must take into account several factors: the global environment, the economic scenario within India, and also in Japan. But also you should be very clear that the needs on both sides make it obligatory on our part to move towards the execution on this investment.

I ask this because, even before PM Modi had visited Tokyo, the Japanese Chamber of Commerce had written a letter expressing its concerns over the lack of movement on certain infrastructure commitments, particularly on the Chennai-Bengaluru Industrial corridor. Is there a worry about Centre-State relations as well?

As far as procedures are concerned, we believe PM Modi is forward looking and has set up the Japan desk, and with regard to the regional Centre-State issues, we have been asking for greater clarity on procedures and we believe there will be some movement on that end too.

Finally, you have said that the synergy between Abenomics and Modinomics is necessary for India’s growth. What did you mean by that?

Abenomics includes Japanese investment to the world as well as investment in Japan. The Japanese population is on the decline, and if you go by the current rate, it will reduce to 86 million by 2060, and this would bring the demand issue. So if you take the demand needs, and India’s need for development, you would have a template for the future. We hope that not only will Japanese companies move towards India, more Indian companies, including IT companies would move to Japan. When I linked Abenomics and Modinomics, I also am aware of Mr. Modi’s priorities, including infrastructure, tourism and skill-building. There is a commonality in our interests there. Japan also needs to simplify its procedures, our foreign investment is just 3% of our GDP, which is low compared to the OECD average of 30%, and we need to do more as well.

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