India pitches for Japanese companies moving out of China

New Delhi: India is making a pitch for attracting Japanese companies in the post Covid-19 scenario after the Japanese government announced incentives for its companies to move out of China.

Invest India has prepared a paper on "Why is India the best place for Japanese investments in the post Covid-19 world" authored by Devika Chawla, Strategic Investment Research Unit, and Seerat Kohli, Japan Plus, Invest India.

The paper has also been put up on the Twitter handle and Facebook page of the Indian embassy in Japan.

The paper argues that there is widespread uncertainty about China's future global role and trade practices.

It examines the recent announcements by the Japanese government offering massive incentives to their companies to move out of China and argues why Japan should look towards India as the foremost destination for diversifying its supply chains away from China.

The implications of this package will be wide and far-reaching, both in terms of geopolitics as well as economics. Specifically, the decision to promote relocation of Japanese companies away from China, its largest trading partner, indicates a growing consensus in Japan to move its supply chains back to the country, or to other preferable countries such as Vietnam, Thailand and India.

It points out that China has been rapidly losing its attractiveness among Japanese countries for a while now, an example of which can be seen from the fact that about 159 Japanese companies operating in China have relocated to comparable countries like Vietnam and Thailand.

Invest India is a non-profit venture under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry. It is the National Investment Promotion and Facilitation Agency of India and acts as the first point of reference for investors in India.

"Such diversification and shifting of Japanese firms away from China is estimated to create a $730 billion economic opportunity for developing geographies like ASEAN and India. The ongoing COVID-19 crisis presents a golden opportunity for India and Japan to further boost their already successful relationship,", the paper argues.