India-Japan Investment Relations: Trends & Prospectus

Geethanjali Nataraj ()
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Geethanjali Nataraj: Indian Council for Research on International Economic Rela

Indian Council for Research on International Economic Relations, New Delhi Working Papers from Indian Council for Research on International Economic Relations, New Delhi, India

Abstract: Though Japan had been one of the top five investors in India for long, its share inIndia’s total FDI inflows has been dwindling since 2000. Other countries havesurpassed Japan in terms of their investment and market share in the Indian economy.In this context, this study attempts to analyse the constraints on Japanese investmentin India. The study finds that poor infrastructure, taxation system, procedural hasslesin customs clearance, and red tapism are important factors deterring Japaneseinvestment in India. Further, many Japanese companies have lost out to stiffcompetition from South Korean companies, which have been able to understand theprice-sensitive nature of the Indian consumer better. It is expected that the completionof the on-going negotiations on the Comprehensive Economic Partnership Agreement(CEPA) will boost Indo-Japanese investment relations. There exist huge opportunitiesfor Japanese investors in sectors such as biotechnology, agriculture, hydrocarbon fuelsand information and communication technology.

Keywords: Foreign Direct Investment; Bilateral Trade; Asia (search for similar items in EconPapers)
JEL-codes: F1 F21 (search for similar items in EconPapers)
Pages: 25 Pages
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