PM Modi Meets Japanese Business Leaders, Invites Investment In Smart Cities, Textiles, Auto

Prime Minister Narendra Modi on Monday (23 May) invited greater participation by Japanese companies in India, underlining the strength of the economy, which despite a slowdown in global foreign investment flows, attracted record FDI of $84 billion in the previous financial year as a vote of confidence in its economic potential.

The strength of the India-Japan ties was evident in the presence of top executives and CEOs of 34 Japanese companies at a roundtable with Japanese business leaders chaired by Modi in Tokyo, where he arrived on 22 May for a two-day official visit.

The engagement with the CEOs takes on a special import as majority of these companies representing diverse sectors as automobiles, electronics, semiconductors, steel, technology, trading and banking and finance have investments and operations in India and would be pivotal in taking forward the ambitious target of approximately $40 to $42 billion in public and private investment and financing over the five years as agreed upon during Prime Minister Kishida’s visit to India.

Quite aptly, the Prime Minister made a forceful pitch to Japanese businesses for participating in India's growth story, which offers an ambient investment climate with various reforms being undertaken to enable ease of doing business for foreign investors including in the areas of industrial development, infrastructure, taxation and labour.

Of key importance is Modi’s interaction with Nobuhiro Endo, Chairman of NEC Corporation which has plans to contribute to smart cities and the 5G projects in India. The corporation is looking at the application side from smart city's point of view and providing the communication platforms for 5G besides already having an important stake in the development of India’s telecommunication sector, especially in undertaking Chennai-Andaman and Nicobar Islands (CANI) and Kochi-Lakshadweep Islands (KLI) OFC projects.

The other important interaction of Modi was that with Tadashi Yanai, Chairman, President and CEO of Japanese clothing brand Uniqlo which has all of its six India outlets in the National Capital Region. “They discussed Uniqlo's growing presence in India and investment opportunities for textile manufacturing in India under the PLI scheme," Bagchi said. Modi sought Uniqlo’s enhanced participation in helping India become a manufacturing hub for textiles with use of technologies in textile manufacturing even as the company mulls opening a majority of its upcoming stores in India.

Besides corporates, Modi held discussions with Masayoshi Son, Founder of Softbank Corporation which, as India’s biggest technology supporter, has injected more than $14 billion into India's tech industry. The talks focused on Softbank's future participation in India in technology, energy, finance, R&D, with specific proposals being shared with Softbank where it could enhance its investments in India.

The Prime Minister held parleys with Suzuki Motor Corporation Advisor Osamu Suzuki to discuss opportunities in investment, innovation, manufacturing of electric vehicles, and recycling centres in India, where the Japanese automaker will invest Rs 10,445 crore by 2026 in an EV plant in India. The meeting with Osamu Suzuki also comes days after Suzuki’s Indian subsidiary and India’s largest car maker Maruti Suzuki made its biggest investment in India of over Rs 20,000 crore for a new manufacturing plant in Haryana.

Through an agreement signed between Haryana State Industrial and Infrastructure Development Corporation and Maruti Suzuki India and Suzuki Motorcycle India, the Government of Haryana has allotted 800 acres and 100 acres of land, respectively to MSIL and SMIL for the plants to be set up at Industrial Model Township (IMT) at Kharkhoda in Sonepat.

Maruti Suzuki will start construction work on the car plant immediately and the first facility with an annual manufacturing capacity of 2.5 lakh vehicles, is expected to be commissioned within the year 2025, subject to administrative approvals. Phase 1 of the project will have an investment of about Rs 11,000 crore which includes the land, the car manufacturing plant and some common infrastructure and facilities for future plants.

Earlier this year, Suzuki Motor Corporation announced that it would invest about Rs 10,445 crore by 2026, for local manufacturing of battery electric vehicles and batteries in Gujarat which includes an investment of Rs 7,300 crore by its wholly-owned arm Suzuki Motor Gujarat for the construction of a plant for BEV batteries on land neighbouring SMG's existing plant by 2026 and another Rs 3,100 crore for increasing production capacity for BEV manufacturing by 2025.

The "special, strategic and global" relationship between Japan and India -- as Modi referred to in a Japanese newspaper editorial – has already witnessed a sustained partnership in strengthening India's economic and industrial development.

Going ahead, with a strong legacy as this and positive vibes between the two leaders, Modi’s visit is opportunely placed to fulfil the untapped potential of their ties as both nations face new responsibilities, goals and opportunities amidst the Covid pandemic, geopolitical tensions, rising energy prices and challenges to security and stability in the region.

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