INDIA’S ADVANTAGES AS THE DESTINATION FOR HIGHER JAPANESE INVESTMENTS
The labour advantage:
Among the many synergies converging in the Indo-Japanese ties, the availability of a large pool of cheap labour in India stands out distinctly as it perfectly addresses the issue of lack of labour in Japan due to its ageing population. India, as the world’s youngest large country, with an estimated average age of 29 years by 2025, is aggressively skilling its large pool of manpower to address domestic and global demands for labour.
India, with its impressive and consistent growth rates, has attracted some of the highest FDI figures in the world since it liberalised its economy in 1991. In the backdrop of its growing economy, India is estimated to provide USD 4.8 Tn investment opportunities by 2025. During 2012-2017, several Indian subsidiaries of global corporates have continuously outperformed their global parent companies, demonstrating the strong growth prospects for investing in India. As of 2018-19, Japanese FDI into India stood at USD 2.96 Bn.
Trade between both the partners has been growing and deepening significantly reflected in the presence of 1,441 Japanese firms operating in India, in sectors ranging from automobiles to food processing and from renewable energy to textiles. In 2018-19, India’s imports from Japan stood at USD 12.7 Bn, while Indian exports to Japan have followed a similar trajectory of growth, standing at USD 4.8 Bn in 2018-19.
As demonstrated in this paper, the continuing COVID-19 crisis gives a golden possibility for India and Japan to similarly boom their already a hit courting. There is no doubt in anyone’s thoughts that the post-COVID world might be starkly super from the one previous it in many giant approaches as the arena looks closer to a financial and social reset. Among one-of-a-kind things, this pandemic has highlighted the sector’s over-dependence on China, mainly in regions including clinical device and medical textiles, due to which, there was a growing consensus amongst and inside countries which includes India and Japan about no longer first-class promoting their home industries however moreover diversifying their reliance on China for manufacturing activities. These convergences bring Indian and Japanese pursuits nearer and the opportunity offered by the manner of Japan’s announcement of investment its multinationals to relocate away from China should be completely leveraged thru India as the maximum high vacation spot to consistent such investments from Japan. India has a variety of things and motives to be the favorite vacation spot for Japanese investments, consisting of its global role and role as a key worldwide player succesful of converting China, its massive market size offering immense possibilities for trade, its continuously strong growth rates, its large pool of cheap yet expert labour and last but no longer the least, its open and democratic values, a major feature that differentiates India from China. A deepening of the Indo-Japanese relationship proves a win-win for both; selling India due to the fact the high area for Japanese corporations to make investments in, goes a long manner in that direction.