Start of a new era of Japanese trade and investment
The Modi government wants to improve ties with Japan, and wants to encourage cross-border trade and investment. However Japan is demanding some policy changes and concessions in the areas of taxation and expansion of its banks in India.
Japanese Industrial Clusters
Sources said that the country of rising sun is waiting for a faster execution of the Delhi-Mumbai and Chennai-Bangalore corridor projects that would promote Japanese industrial clusters in these regions and will bring prosperity to the area. This is possible if the bilateral Advance Pricing Agreements (APA) meant to reduce tax litigation is signed quickly between Japan and India.
Japanese Banks
The Japanese government led by Shinzo Abe is pressing for an early introduction of the Goods and Services Tax in India and permission for more Japanese banks to open their branches in India, especially in metros. Both the measures will increase profits for Japan, reduce costs for its companies doing business in India and provide jobs for the youth of India. The Japanese also want the foreign investment cap in pension should be eased from 26 % to 49 %.
Pharma and service industries
Japan is known for its focus on quality and six sigma and lean approach in its industries. Hence the Modi government wants to strengthen its ties with Japan for technological and financial help in large projects. Japan’s huge pharmaceutical market should set up its back office and customer service centres in India as Japan’s ageing population is majorly retired and India’s young and educated is jobless. This measure will benefit both the nations and will increase the prowess of Asia in the world economy.
Source- The Financial Express
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