Japan is keeping its promise to Modi. Will invest $35bn in creating industrial hubs

Japanese Government’s actions are louder than words. As promised, it will be setting up industrial townships in India that will promote domestic manufacturing and Prime Minister Narendra Modi’s ‘Make in India’ campaign.
To set up such units, the Shinzo Abe-led Japanese Government has already identified 11 sites in Karnataka, Rajasthan, Gujarat, Tamil Nadu, Haryana and Noida, giving a major thrust to investments and Indo-Japan relationship.
Japan will also provide soft-skills training to Indian workers in the manufacturing sector to help bridge the demand-supply gap.
"Japan aims to double its investment in India to about $35 billion in the next five years. The move would help strengthen bilateral economic ties. They are already the primary investors in our economic corridors," a government official told the Economic Times.
Japan is the fourth-biggest foreign investor in India, contributing 7% to the total FDI inflows since April 2000, according to the DIPP. Japan brought in $1.7 billion worth of FDI in 2013-14 and $18 billion between April 2000 and February 2015.
Meanwhile, the move will also ensure transfer of technology between the two countries.
Moreover, the Indian Government might give concessions to Japanese companies involved in the projects.
"We are yet to work out the investment incentives for the companies, but it will definitely not be lower than what is under the prevailing policy framework including SEZs and NIMZs, like what has been announced for the Chinese industrial parks as well," the official told the financial daily.
Special economic zones (SEZs) are allowed duty-free imports and 100% tax-free export income for the first five years, 50% for the next five years and 50% of the ploughed back export profit for the subsequent five years. NIMZs, under the National Manufacturing Policy, provide tax incentives to small and medium enterprises.
The township projects will be assisted by the respective state governments, the Department of Industrial Policy & Promotion and Japan's Ministry of Economy, Trade & Industry.
Japanese Minister for Trade Yoichi Miyazawa met Indian Minister of State for Commerce and Industry Nirmala Sitharaman in New Delhi last week and they signed a five-point agenda for the development of Japanese industrial townships, promotion of investment and infrastructure development, further development and cooperation in the IT sector, enhancing cooperation in strategic sectors and advance Asia-Pacific economic integration.

(Image: India Times)