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Firm base for closer India-Japan business relations

Wholesome experience of partner companies from operations in the past two decades

— FILE PHOTO

CEMENTING TIES: Indian Commerce and Industry Minister, Kamal Nath (left), is greeted by his Japanese counterpart, Toshihiro Nikai, during the India-Japan Business Summit in Tokyo last month. Indian and Japanese business leaders attended the one-day meeting co-sponsored by the Confederation of Indian Industry (CII), India Brand Equity Foundation (IBEF) and Japan External Trade Organization (JETRO).

THERE IS a conventional notion that though the Indian market holds great potential, doing business in India is extremely challenging. A strong proof against this comes from Japanese companies operating in India. Remarkably, almost all of them have a positive outlook on India in terms of their investments plans.

In a recent survey of Japanese businesses in India, conducted by the India Brand Equity Foundation (IBEF), 70 per cent of the respondents said they planned to increase their current investments in India.

The point to note is that this bullish outlook is a result of their experience of doing business in India. A substantial 74 per cent of the companies surveyed felt that their overall experience with India had been "exceptional" and another 21 per cent said they were satisfied with their India operations.

Given this positive sentiment, the upbeat mood at the India-Japan Business Summit, held in Tokyo on June 14, came as no surprise.

The summit, which was jointly organised by the Confederation of Indian Industry, IBEF and Japan External Trade Organisation (JETRO), focussed on expanding the ambit of business and commercial contacts between the two countries.

Around 350 delegates participated where CEOs from India made sector-specific presentations covering opportunities in manufacturing, pharmaceuticals, R&D, retail finance and consumer markets. Interestingly, the focus of the two governments represented by Kamal Nath, Minister of Commerce and Industry of India, and Japan's H. E. Toshihiro Nikai, Minister of Economy, Trade and Industry, was on small and medium enterprises (SMEs) as the future area of India-Japan business partnership. JETRO, too, announced that it was opening new offices and business support centres later this year in Delhi and Bangalore.

All these trends augur well.

This writer met with both Indian and Japanese industry representatives during the three days of the "India Everywhere" campaign in Tokyo, and was struck by the strong sense of purpose to build the India-Japan business corridor. Being a data and information driven society, the real challenge for us is to overcome the barriers to growth through more exchange — of information, of people and of ideas.

Early mover advantage

According to the survey referred to earlier, judging from the experience of Japanese companies in India, the scope for growth is enormous. One of the primary reasons most Japanese companies are happy with their India experience is that they have made significant gains from mutually beneficial relationships. This point merits some elaboration.

Japanese companies were among the earliest to bet on India — in fact, as far back as the partial liberalisation of the late 1980s — and they have reaped the early mover advantage. Most Japanese companies entered India through strategic partnerships with Indian companies, alliances that have proved rich and rewarding for both parties.

The cumulative impact of the Japanese corporate presence in India is that concepts such as just-in-time supply, Kaizen and TQM, pioneered by some of the world's leading Japanese corporations and management thinkers, have become common practices on Indian shop-floors. There is no doubt that these concepts have played a key role in India's manufacturing revolution that is now attracting so much global attention.

At the same time, Indian partners have played a key role in helping Japanese companies build market share and derive meaningful value from India.

Widening range

A growing number of Japanese companies are targeting India as a global hub for manufacturing, leveraging the availability of a high-value skilled workforce and resources. Many Japanese companies are also discovering the advantages of India's ITES industry and setting up technical support centres in India to meet the growing needs of their global customers and strengthen global solution businesses.

Relationships like these, based on the inherent strengths of both countries, are bound to grow as a resurgent Japan and rising India make common cause in the globalisation stakes. The two countries must take their engagement a level deeper and expand the network.

It is in their common interest to pursue the India-Japan corridor aggressively. As the two governments strive to create an enabling environment for business relations to flourish, new-generation entrepreneurs, especially in the SME sector, must take up the challenge to exploit the opportunity.

(Views expressed by the author are personal)

AJAY KHANNA

CEO, India Brand Equity Foundation

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