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Japanese investment in India
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Japanese investment in India
Contents
4. Our services 39
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Japanese investment in India
Foreword
Japanese investment in India has been relatively low compared to the investment India has received from countries
such as the USA. Much of the Japanese investment to date has focused on industry sectors such as automotive
vehicles and components, IT and engineering. But recent investment activity suggests that Japanese companies are
becoming more emboldened with respect to pursuing opportunities in India and are beginning to broaden their
interest into new sectors. NTT Docomo’s investment in Tata Teleservices and Daiichi Sankyo’s acquisition of Ranbaxy
are both landmark investments.
Harjinder Singh-Heer During the Indian Prime Minister’s visit to Japan in 2008, a number of new initiatives were announced to promote
Director
both trade and investment and improve things such as air transport links. Future opportunities for Japanese
Heernet Ventures Limited
companies are extremely attractive with sectors such as power generation and transmission, renewable energy,
Email: harjinder@heernet.com transportation and chemicals requiring substantial foreign investment if India is to meet its longer term growth
Tel: +44 (0) 208 180 7223 objectives.
This study aims to provide Japanese companies considering opportunities in India with a short introduction to the
country and its foreign investment regime. It also assesses the level of investment to date in a number of sectors of
the Indian economy.
We have built a strong track record of advising companies on their entry strategy for the Indian market. Key areas
where we assist our clients include initial market analysis, development of an entry strategy, identification of suitable
investment opportunities and commercial due diligence. From our offices in India, we can deliver comprehensive, on
the ground support at every stage of the investment process.
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India Country Profile
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Japanese investment in India
• Complex restrictions on foreign currency reserves are opened up to foreign organised retail) likely to be
Foreign
provision of development finance minister and begins total FDI inflow, especially agreements to promote FDI
aid and loans (1958). financial and economic in automotive sector (1991- like CEPA, DMIC and civil
• Largest investment was the reform process 07). aviation arrangements.
joint venture between • Bilateral trade improved, • Relaxing the FDI and trade
Indian government and with a growth of 22% in norms.
Suzuki Motor Corporation, imports and 11% in exports • Planning to explore natural
resulting in the formation of (2001-07). gas resources in India in
Maruti Udyog (1982). • Rise in interest in private 2010, through private sector
• FDI investment of US$332 sector with about 840 cooperation.
million (1951-91). companies operating their
branches in India.
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Japanese investment in India
Kolkata
Mumbai
South India
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Japanese investment in India
Manufacturing Product quality in many sectors is poor and not Sectors such as automotive components and textiles are
good enough for export markets – but is now competing globally.
improving
Strong domestic demand for products such as steel and
Lack of good distribution infrastructure means building materials
that meeting international demand is difficult
Investments: Volkswagen and BMW are both building
factories in India
Infrastructure Poor transport infrastructure (roads, railways, Over US$320 billion in investment expected through to
and energy ports and airports) 2012. Investment sought through PFI-type initiatives with
foreign investors
Energy shortages in most parts of the country
Investment of US$200 billion for power and US$40 billion
for ports and airports
Consumer General and food retailing is highly fragmented Large market opportunity in retail (US$640 billion by 2010
and dominated by mom and pop stores from US$300 billion in 2005)
No proper logistics infrastructure retards World class, out of town shopping malls are growing
development of retail chains rapidly in urban areas (from 25 malls in 2003 to 375 by
2008)
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Japanese investment in India
Consumer spend has grown very rapidly in the last five years
Increased prosperity has driven strong growth in demand for consumer products
Growth in these sectors is spreading from the large cities to smaller cities and semi-urban areas
Pharmaceuticals 11.9%
Healthcare 10.8%
Cosmetics 8.4%
Clothing 12.8%
0% 5% 10% 15%
The global economic downturn has had a short term impact in India,
but the long term fundamentals are still attractive
India’s non-agricultural economy has achieved double digit GDP growth over the last 3 years, but
is forecast to slow to between 6%-7% in 2009/2010.
Whilst India’s banking sector has escaped the banking crisis (due to a conservative regulatory
environment), a fall in demand for Indian IT and business services primarily from the US is having
a negative economic impact on the major cities
The long term perspective is more attractive with India’s GDP growth expected to exceed China by
2015. India’s GDP growth will be 2 – 3 times that of developed countries such as UK and USA.
GDP growth in India (2000 – 2011) GDP growth for selected countries through to 2020
Source: DIPP
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Analysis of Japanese-Indian trade and
investment
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Japanese investment in India
In 2004 (latest year available), Japanese Sector 2004 (US$ Number of Average investment
million) deals per deal (US$
companies were involved in almost 2,500 million)
overseas investments Finance and Insurance 11,613 1,579 7.4
Transport (Manufacturing) 3,601 145 24.8
Key sectors that attracted Japanese FDI
include financial services and a number of Chemical 3,530 79 44.7
Source: JETRO
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Japanese investment in India
Japanese FDI into India did not show any material increase until 2006, when it reached US$512
million – but since then it has grown rapidly to over US$5.5 billion (2008)
India accounts for approximately 4% of Japan’s FDI in 2008. The USA is the largest recipient
accounting for a third.
% of Japanese FDI by recipient country (2008) Japanese FDI into India (1996 – 2008)
6,000 5,551
3,000
2,000 1,506
Cayman
Islands, 17.2% China, 5.0%
India, 4.2% 1,000 512
485 460
262 261 175 150 146 124 139 266
UK, 5.2% Brazil, 4.1%
Netherlands, 0
Russia, 0.2%
5.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: JETRO
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Japanese investment in India
Source: JETRO
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Japanese investment in India
The value is insignificant in the context of China’s US$127 billion in exports to Japan
India 4,153
Qatar 16,942
4,500 4,058 4,153
Japanese imports from India (US$
Source: JETRO
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Japanese investment in India
Japanese exports to India have doubled in three years to US$6.1 billion (2007)
Again, this value is insignificant when compared to trade with China and USA
India 6,152
7,000
6,152 United Kingdom 16,268
Japanese Exports to India (US$
6,000
Netherlands 18,513
5,000 4,457
Singapore 21,784
Millions)
Source: JETRO
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Japanese investment in India
In the last two years, Japanese companies have made a number of large investments in India.
The two transactions that stand out are Daiichi Sankyo’s investment in Ranbaxy and NTT
Docomo’s investment in Tata Teleservices
NTT Docomo Telecom US$2.7 NTT Docomo Inc. acquired 26% stake in
billion Tata Teleservices. NTT Docomo is the 0 200 400 600 800 1,000
world's leading mobile operator and provider Japanese investment in India by industry (US$ Millions)
of advanced mobile services.
Sector-specific analysis
Sector Key observations FDI rules and limits Examples of Japanese entrants
Automotive Largest sector in terms of FDI from Japan. 100% through automatic route. Toyota, Nissan, Suzuki, Yamaha, Honda
Automotive Growing in tandem with the automotive sector 100% through automatic route. Sumitomo Corporation, Yanmar Group,
Components Stanley Electric, Toyoda Gosei.
Chemicals Has accounted for a substantial share of FDI (12% of 100% through automatic route. Mitsubishi Chemical Corporation, Nitto
Japanese FDI into India) Denko Corporation, Sakata Inx
Corporation, Idemitsu
Future demand for FDI is likely to remain strong due
to excellent domestic demand
Cosmetics No material FDI from Japan to date Through single brand retailing (51%) and No examples
through automatic route in wholesale
retailing (100%).
Electronics Increasingly important sector with Japanese No restrictions on foreign investment in Toshiba, Fujitsu, Panasonic (Matsushita),
companies establishing both distribution and electronic hardware. Shinko Electric Co.
manufacturing operations
Financial India’s retail and wholesale banking and insurance Financial collaboration (51%), Insurance Nomura Holdings Inc., Mizuho Financial
services industries provide enormous growth opportunities sector (26%), Public banks (20%) and Group, Sompo Japan Insurance Inc.,
Private banks (74%). Shinsei Bank
Emerging as an important target for Japanese
investment No restriction in non banking financial
services.
IT services Arguably one of India’s most important export 100% FDI permitted. Hitachi Data System, OKI Electric Industry
generators Co., NTT Communication Corporation
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Japanese investment in India
Sector-specific analysis
Sector Key observations FDI rules and limits Examples of Japanese entrants
Media and Marketing The only major activity has been by Japanese companies in Range from 20% limit on FDI in radio to Dentsu, ADK (Asatsu-DK)
the marketing services industry no limits in magazine publishing (non
current affairs titles only)
Animation industry may provide some good prospects for
future collaboration
Oil and Gas No major investment to date, but some emerging interest in Private refineries (100%) and
natural gas resources government owned refineries (26%).
Pharmaceuticals Japanese companies have invested through alliances with 100% FDI is permitted, except in some Daiichi Sankyo, Astellas Pharma
Indian firms to conduct their contract manufacturing and specialist areas. Inc., Eisai Corporation
clinical trials.
Also saw one of the biggest acquisitions in India with Daiichi
Sankyo acquiring Ranbaxy
Power Indian government is keen to attract significant foreign 100% in power generation, Shinko Electric Co.; Hitachi-GE
investment in both traditional and renewable power industries transmission and distribution (except Nuclear Energy; Japan Bank for
for both production and distribution nuclear power projects). International Corporation (for
funding power projects).
Leading Japanese companies are active.
Telecoms Rapidly growing segment of the Indian economy. 74% FDI in various telecom services, NTT Docomo, KDDI Corporation,
(requires FIPB approval above 49%) Softbank Telecom Group
Has attracted new entrants such as NTT Docomo into the
mobile segment and KDDI into wholesale services
Textiles The Indian textiles industry has suffered at the hands of strong 100% FDI is permitted through Tokai Senko, Nihon Sanmo
competition from other Asian countries automatic route. Dyeing, Kawashima Selkon
Textiles Co.
Access to India’s raw materials and a large workforce are
proving attractive to Japanese companies
Transportation Transport infrastructure has been a major recipient of Except railways, FDI is permitted in Japan ODA.
overseas aid from the Japanese government most industry segments (with various
ownership limits).
Projects such as Delhi Mumbai Industrial Corridor and Delhi
Metro have benefited
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Japanese investment in India
Agreements Description
Comprehensive Special Economic Aims to enhance trade in both goods and services
Partnership Agreement (CEPA)
Identifies a number of measures for trade promotion, promotion, facilitation and liberalization of
investment flows and measures for promoting economic cooperation in identified sectors.
The countries are still negotiating on a number of issues including items in the negative list of products
to be proposed for tariff-cuts and quality control standards for import of agricultural goods.
Delhi-Mumbai Industrial Corridor The Delhi-Mumbai Industrial Corridor has been identified as a key industrial infrastructure project in
(DMIC) India.
The countries have agreed to develop the Delhi-Mumbai Freight Corridor and to cooperate on other
projects such as power facilities, rail connectivity to ports en-route and to develop ports on the west
coast of India.
The working authorities for the project include Vice-Minister METI and Secretary and Department of
Industrial, Policy and Promotion.
Relaxation of Civil Aviation This agreement includes provisions for designated airlines in both countries to offer increased
arrangements scheduled services.
This includes; three more points in each country for code sharing operations; enhancing the capacity to
21 services weekly; designated airlines for cargo services with a weekly frequency of seven; and
setting up a mechanism on code sharing arrangements including the domestic code share.
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Sector-specific analysis
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Japanese investment in India
Automotive industry
The largest recipient of Japanese FDI, with INR 800 billion Toyota Has partnership with the Indian group, Kirloskars. Current
in 2007.* market share is approx. 3%. Strategy is to develop India as
a key production centre for compact cars.
Japanese investment began in the mid-80s with Suzuki’s
joint venture with the state-owned Indian automotive Investment of INR 32 billion in plant in Karnataka
company, Maruti Udyog. The partnership saw the launch of
Maruti Suzuki which has become one of India’s leading car Nissan Established a production unit for manufacturing of car
manufacturers. products at Chennai, India through a 50:50 joint venture with
Mahindra Alliance for an estimated consideration of US$900
In recent years, most of the leading Japanese automotive million (February 2007).
manufacturers have entered the Indian market in the two
wheeler, passenger cars and commercial vehicle segments. Joint venture with commercial vehicle manufacturer, Ashok
Leyland. Investment of INR 20 Billion in majority controlled
100% FDI is allowed under automatic route. joint ventures to produce vehicles and components
There is no regional concentration of Japanese Automobile Nissan Renault has established a joint venture with Bajaj
companies, but states such as Haryana have proved Auto to manufacture ultra low cost cars.
particularly attractive to new entrants.
Automotive production in India has increased with a CAGR Honda Entered market in 1980s in joint venture with Hero Group to
of 12.6% (2001-08) and reached 10.8 million units in 2007- manufacture motorcycles. In the car market, Honda Siel
08. India is expected to become world’s third largest Cars India incorporated in 1995 as a joint venture between
automobile market by 2030 (UNCTAD). Honda and Siel Limited.
The Indian government sees the automotive sector as a key Plant at Noida with a second production plant (in Rajasthan)
employer in the future and is keen to attract more foreign to become operational in 2009. Manufacturing capacity of
investment. The Automotive Mission Plan 2016 has a target 350,000 units p.a. with focus on small car market
to attract investments of approximately US$35 billion to US
Yamaha Yamaha Motor (70% stake) formed a joint venture with
$40 billion by 2016.
Motors Mitsui Co. (30% stake) to establish a motorcycle
manufacturing company, India Yamaha Motor
In the last 5 years, there have been at least 8 major Nippon Joint venture with Talbros to manufacture gaskets
investments by Japanese auto companies with a value of INR Leakless and forgings for Japanese manufacturers in India
1.2 billion. Toyoda Gosei Invested INR 450 million to establish a new
Japanese investments began in the early 1980s with the subsidiary, Toyoda Gosei India, in Rajasthan, India,
partnership between Maruti Udyog and Suzuki Motors. to provide safety system parts such as steering
wheels and airbag modules (June 2008).
The FDI regime is relaxed with 100% equity ownership
permitted for both automotive component manufacturing. Stanley Acquired 19% stake in Lumax Industries which
Electric provides automobiles lights and gear shifters
The industry has hundreds of players, but the largest (February 2007).
companies are primarily located in the Delhi region,
Maharashtra, Chennai and parts of Andhra Pradesh Bellsonica Formed joint venture with Maruti Udyog (70% stake in
Corporation JV) for an investment of INR 120 million, to establish
The Indian government is keen to increase India’s share in
Bellsonica Auto Component India to manufacture car
the global auto components market from 0.9% to 2.5% by
body parts for Maruti (July 2006).
2015. It estimates that to reach this target it will require an
additional US$5 billion in FDI.
Yanmar Acquired 12% stake in International Tractors for INR
Group 20 billion (October 2005).
Mitsubishi Acquired an India-based gear cutting tool
Heavy manufacturer, SRP Tools – now known as Mitsubishi
Industries Heavy Industries India Precision Tools (February
2005).
Chemicals industry
Approximately 10% of Japanese technical collaborations in Dainippon Ink Invested US$33 million to establish a printing ink
India have been in the chemicals industry (August 1991- and manufacturing plant in Gujarat (June 2008).
March 2006). Chemicals
Indian chemicals sector attracted FDI of US$749 million in Mitsubishi Invested approximately ¥ 180 million to establish a
2008-09. The industry accounted for 12.2% of the Japanese Chemical subsidiary Mitsubishi Chemicals India in Haryana for
FDI into India (FICCI). Corporation production and marketing of the company's products (March
2008).
Japanese Investments started in the late 1990s. In 2000,
Mitsubishi Chemicals Corporation established an India Toyo Ink Established an ink factory in India to manufacture ink for
operation with an investment of INR 14.8 billion – this was sheet feed offset printing (February 2008).
the largest Japanese investment in the chemicals Industry.
Sekisui Established its subsidiary, Sekisui Chemical India in Delhi to
100% FDI is allowed. Chemical import and distribute its products, with an investment of INR
150 million (May 2007).
Petroleum, Chemicals and Petrochemicals Investment
Regions (PCPIRs) have been established to attract more FDI Nippon Bee Formed a joint venture with Berger Paints India (49%
into the sector. These regions consist of Special Economic Chemical stake) to establish a company for manufacturing of plastic
Zones, Industrial Parks, and free trade and warehousing coatings for an investment of INR 90 million (April 2007).
zones offering investors attractive tax and investment
regimes. Idemitsu Through its subsidiary, Idemitsu Lube Pte Ltd. entered into
a five year technical collaboration with Savita Chemicals
(November 2006).
The industry has not yet seen any substantial Japanese FDI, but
many foreign manufacturers distribute their products in India
Company Key product areas
In fact, FDI has been relatively low, reaching only US$151 million in
the 9 years to April 2009
Hindustan Home care (Laundry); Personal care (Personal
For the retail segment, FDI rules allow foreign ownership of up to 49% Unilever wash, Skin care, hair care, oral care, deodorants
for single brand retailing in the cosmetic sector, and 100% for and Color cosmetics); Health care.
wholesaling.
Dabur India Health care (Hair care, oral care, Skin care) and
For manufacturing, foreign players can own up to 49% of a joint Home care. Leading in the Ayurvedic products.
venture.
Emami Health care (Baby products, Skin care, Hair care,
The industry consists of a number of domestic players who have ailments, health supplements). Focuses on
typically focused on low priced, products targeted at both India’s Ayurvedic products.
urban and rural markets and multinationals such as Unilever who
have been active in India for many decades VLCC Group Body firming and shaping solutions, Skincare and
hair care solutions. Focuses mainly on beauty
In recent years, as urban affluence as grown many foreign brands products.
have become available
Shahnaz Hair care, Skin care. Focuses mainly on beauty
Hussain products.
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Japanese investment in India
Electronics industry
The electronics industry has been an important destination for Elpida Elpida Memory, a DRAM memory company established
Japanese FDI, accounting for approx. 7% of investment in the Memory Edison semiconductor in India
5 years to 2005.*
Fujitsu Invested in India to launch ultra portable laptops in India
In the last five year, there have been 3 major deals including (January 2008).
the Matsushita’s investment of INR 2 billion to acquire 80%
stake in Anchor Electronics in India. Matsushita • Acquired 80% stake in Anchor Electronics for INR 2 billion.
(Panasonic) Matsushita also established a subsidiary, Panasonic Home
The first Japanese investment in the electronics industry Appliances India Co.
began in the early 1990s with the entry of players such as
Toshiba, Sony, Panasonic.
Hitachi • Entered into joint venture with Toshiba (25%) and
India allows 100% FDI in electronics hardware. Matsushita Electric (25%) to launch IPS Alpha Technology,
for manufacturing and distributing LCD panels for TV. It
The Government has recently set up Electronic Hardware
holds a 50% stake in the joint venture
Technology Parks to encourage investment; these have been
established in a number of major cities including Chennai, Sony Invested in India through its subsidiary Sony India. The
Bengaluru and Cuttack. Corporation company also set up Sony Ericsson company, a mobile
handset company in India.
The electronics sector is expected to be worth US$62 billion
by 2010 Toshiba Established its subsidiary, Toshiba India, for marketing of its
electronic products.
India is the fifth-largest country in Asia in terms of total Financial sector 51% allowed under a financial
insurance premium. It has grown with a CAGR of 28.1% collaboration.
(2002-07). In 2007, FDI of approximately INR 2.5 billion was Insurance Up to 26%.
received in the sector.
Non Banking financial Up to 100%.
In the last two years, eight Japanese foreign institutional
services
investors have obtained the required SEBI registration and
have entered the Indian market. Private sector bank 100% allowed to a foreign bank or its
regulated wholly owned subsidiary in
In the last five years, three major deals have been done by
Indian Private sector bank.
Japanese financial companies, totalling an amount of INR
88.7 billion. 74% through automatic root.
In 1991, banking and insurance deregulation began ; it
Must have credit rating.
included the relaxation of restrictions on private and foreign
investment. From 1992, foreign institutions were allowed to Public sector unit banks Up to 20% through automatic route.
invest in Indian securities.
Financial Sub-sectors Up to 49%.
The government is considering raising some foreign (commodity exchanges,
ownership limits. In the insurance sector, the government is asset reconstruction,
considering raising the FDI limits from 26% to 49%. insurance and credit
information)
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Japanese investment in India
Asset Management
Nomura Holdings Through its subsidiary, Nomura Asset Management Co. Ltd. acquired 35% stake in LIC Mutual Fund AMC for
approximately INR 3.1 billion (July 2009).
Also has an established investment banking operation in India.
Shinsei Bank Entered into an alliance with UTI AMC to invest US$300 million from Japanese retail investors (August 2006).
Launched Shinsei UTI India Fund in 2006 and Shinsei UTI India Infrastructure Equity Fund in 2008.
Securities market
Mitsubishi UFJ Securities Established an Indian subsidiary, Mitsubishi UGJ Securities (April 2008). The company has collaborated with
ICICI Bank to provide financial services to Japanese investors in India.
Mizuho Financial group Formed an alliance with Tata Capital to launch Tata Mizuho Financial group. It offers a range of financial
services including investment banking, private equity, broking and wealth management (February 2008).
Daiwa Securities SMBC Launched its second India-dedicated equity fund for Japanese investors (March 2009).
Established an Indian subsidiary to offer financial services to Japanese corporations, financial institutions and
governments (July 2006).
Insurance
Sompo Japan Insurance Established Universal Sompo General Insurance Co., through a joint-venture between Allahabad Bank,
Sompo Japan Insurance Inc. (26% stake), Dabur Investments, Karnataka Bank and Indian Overseas Bank
(November 2007).
Dai-ichi Mutual Life Insurance Bank of India, Union Bank of India and Dai-ichi Mutual Life Insurance company (26% stake) entered into a
joint venture to form Star Union Dai-ichi Life Insurance, an insurance provider (September 2007).
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Japanese investment in India
IT services
India’s IT sector is arguably India’s most successful export- Hitachi Data Partnered with HCL Infosystems to provide IT storage
orientated industry. Systems solutions in India (September 2009).
Indian companies such as Wipro, Infosys and TCS have Launched a Research and development facility in
established substantial international operations. Bangalore.
Japanese companies have been active technology suppliers NTT Data Acquired 68.7% stake in Vertex Software – a software
to Indian IT companies (837 ‘collaborations’ in 2006 alone).** Corporation developer specialising in mobile and web applications
development.
Japanese companies are particularly investing in Tier I cities
because of their better infrastructure, IT special economic NTT Partnered with Tulip IT Services to offer IT and
zones and parks. They have also moved from being Communication communication services in India.
hardware suppliers to developing joint ventures and Corporation
partnerships for the development of software and related
services Turbolinux Formed Joint Venture with India Action Plan Company
(45% stake in JV) and established Turbolinux India
India’s IT markets are expected to sustain growth of over 20% company to provide software services.
p.a. over the next 3-5 years
NEC Entered a joint venture with HCL Technologies (49% stake
Corporation in JV) - NEC HCL Systems Technologies - to provide IT
enabled services in India.
*NASSCOM
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Japanese investment in India
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Japanese investment in India
The foreign investment in oil and gas started after the Hydro-
liberalization policy of India in 1991 and in 1997, when the Nuclear,
electricity, 1%
New Exploration License Policy (NELP) was established. 7%
The Refinery sector was de-licensed in 1998. Natural
gas, 9%
In the nine years to April 2009, India received FDI worth
US$2.6 billion in the oil and gas sector.
Till now, Japan has made no significant investment in the oil
Coal, 51%
and gas sector but it has a wide scope for investment.
100% FDI is allowed in private refineries through automatic
Oil, 32%
route where as in government-owned refineries only 26%
FDI is allowed. For petroleum products, exploration,
pipelines and marketing/retail, 100% FDI is permitted through
automatic route.
The government established NELP (New Exploration
Licensing Policy) in 1997 in order to attract more investment Oil imports as a % of oil consumption
in the sector.
80%
71%
70% 65%
consumption
50%
40%
30%
20%
10%
0%
1997 2000 2007
Pharmaceuticals industry
There is no restriction, 100% FDI is allowed, for the production The subsidiary sells drugs developed by Astellas
of drugs and pharmaceutical, but the venture should not require Pharma Inc., especially products in immunology and
compulsory licensing. urology.
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Japanese investment in India
Power sector
There have been a number of major Japanese investments in Hitachi-GE Nuclear Partnered with Nuclear Power Corporation
the Indian power sector. Energy and Bharat Heavy Electricals Ltd, to provide
nuclear power technology (March 2009).
Foreign investment in the sector started with the adoption of
the Private Power Policy in 1991. This allowed private It is a joint-venture between Hitachi Ltd, Japan
investment and ownership in the generation and distribution and General Electric Co., the US.
of electricity.
The New Energy and Formed an agreement with India’s Coal and
The Japanese state development bank, Japan Bank for Industrial Technology Finance Ministry, to provide technology
International Corporation has provided substantial loans to Development assistance worth ¥ 1.7 billion for processing
Indian power projects Organization (NEDO) coal for thermal power generation (October
2008).
100% FDI is allowed in the projects related to electricity
generation, transmission and distribution, except nuclear Mitsubishi Heavy Formed agreement with Larsen and Turbo to
power plants. Industries provide INR 4.5 billion technology assistance
for steam turbine and boiler manufacturing.
The power sector will need very substantial investment over
the next 10-15 years; by 2012, an additional 100,000 MW of Shinko Electric Co. Partnered with India Power Company, to sell
capacity is required. wind power generation units in India.
In order to promote FDI, the Indian government has provided Chubu electric Power Together with Hokkaido Electric Power Co.,
a range of tax breaks including a 10 year income tax holiday Corporation Mitsubishi Corporation, Japan Bank for
in the first 15 years of operation and removal of import duties International Corporation and others
on mega power projects (above 1,000 MW generation announced plans to build hydroelectric power
capacities). plant in India.
There are also incentives for the development of power
projects in renewable energy
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Japanese investment in India
Telecoms industry
The mobile telecoms market is expected to grow 27% NTT Docomo Inc. Launched GSM mobile services (Tata DoCoMo) with
annually, reaching 500 million subscribers by March 2010 an investment in Tata Teleservices.
The market’s scale and excellent growth prospects have Acquired 26% stake in Tata Teleservices for US$2.7
made it in attractive destination for foreign investment. billion (November 2008).
NTT Docomo’s investment in Tata Teleservices has been NTT Entered into an agreement with BSNL to develop new
one of the largest Japanese investments in India Communications business opportunities (2009).
The government has raised the FDI limit to 74% for various Extended its partnership with VSNL to launch IP-VPN
telecom services, but any foreign investment exceeding 49% services in Bangalore, India (December 2004).
has to obtain FIPB approval. In telecom equipment KDDI Corporation Established an Indian subsidiary, KDDI India
manufacturing, 100% FDI is permitted. (September 2007).
There is an investment opportunity of approximately US$76
Softbank Telecom Established an Indian subsidiary, Japan Telecom India
billion in many telecom areas including network
Corporation (May 2007).
infrastructure, WIMAX, 2G, 3G, software for voice, data and
broadcasting services.** NEC Corporation Established an Indian subsidiary, NEC India (June
2005).
Textiles industry
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Japanese investment in India
Transport industry
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4
Our services
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Japanese investment in India
Overview
Deep local knowledge, analytical expertise and a highly responsive client service model
Established in 2004
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0
Japanese investment in India
We can assist companies with the development and execution Assisting companies to develop a better understanding of their
competitive in India.
of a comprehensive market entry strategy for the Indian
Research methodologies include:
market.
Analysing the strategies and market positioning of peer
Typical assignments include:
group companies
Analysing market attractiveness (market sizing, growth
prospects, competition, regulatory environment ) Benchmarking analysis in areas such as product strategy
and pricing
Identifying and approaching potential partners
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Japanese investment in India
These companies have purchased research products or advisory services from IndiaAnalysis and its sister operations.
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Japanese investment in India
Example assignments
Context
Asian oil products One of Asia’s leading oil companies with a strong presence in oil-based products with a small presence in India’s
company lubricants industry
The company was keen to assess the future prospects of the Indian lubricants industry and identify which niches
Review of Indian lubricants (automotive, aviation, engineering) were attractive.
industry
Approach
Methodology included field research and expert interviews with manufacturers, distributors and retailers
Key elements of analysis including market sizing, future growth prospects and competitive environment
Based on agreed criteria, we ranked the attractiveness of the various industry segments
Approach
Market structure and attractiveness assessed through a series of expert interviews and market research
Researched the regulatory situation in each market, including incentives for recycling and waste legislation
Identified opportunities for the client to meet significant demand from various emerging markets
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Japanese investment in India
Example assignments
Context
UK-based classifieds Market leader in both print and online in key segments of the classifieds market
publisher
Keen to explore targeted opportunities in India to replicate its highly successful business model. Will consider both
acquisitions and organic investment
Entry strategy
Approach
Analysed the classifieds segment in Mumbai and Delhi
Methodology included field research, mystery shopping and expert interviews
Key elements of analysis including market sizing, future growth prospects and competitive environment
Recommended an entry strategy
Approach
Analysed the English language publishing market in India (size, structure, degree of competition)
Profiled potential partners and scored their partner potential (based on agreed criteria)
Facilitated discussions with selected potential partners
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Japanese investment in India
We have worked with a number of Indian companies on capital raising and equity
placement
Our role has included preparation of information memoranda, research and identification of
potential investors
Clients
Speciality chemicals group Textiles and garment manufacturer Telecoms tower manufacturer
Capital raising for expanding capability in Equity placement Capital raising for expansion of tower
Q10 production manufacturing capacity
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Japanese investment in India
Contact information
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