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Japan firms should not ‘miss bus’ on India, commerce chief says

India’s vast economic potential has much to offer Japanese companies that move quickly to invest in the market, Indian Commerce and Industry Minister Piyush Goyal told Nikkei.

“I do hope Japanese companies will take faster decisions and not miss the bus,” Goyal said in an interview Friday in Osaka, where he traveled to take part in the Group of Seven trade ministers meeting.

“We will be willing to have a red-carpet treatment” for Japanese companies, he added.

Goyal said “there’s a lot of synergy” between Japan and India. Semiconductors, electric vehicle manufacturing and home appliances, as well as other electronic manufacturing, are areas in which the countries can cooperate, the minister said.

Renewable energy, hydrogen, ammonia and steel, along with service sectors such as nursing and health care, are also candidates for collaboration, he said.

Both appliance manufacturing and food processing in India have “scale merit” in terms of the size of the market, Goyal said.

The remarks flesh out potential areas of focus under the Initiative for Japan-India Industry Co-Creation announced by Yasutoshi Nishimura, Japan’s minister of economy, trade and industry, during his visit to India in July.

“We are continuously elevating the partnership with Japan to greater and greater levels,” Goyal said.

India’s gross domestic product has seen 6% to 7% growth each year in real terms, he said, or as high as 9% to 10% annually in nominal dollar terms.

“We are doubling our GDP every eight years or so,” he said. “At that speed, in the next 25 years, the Indian economy will be upward of $25 trillion, possibly upward of $30 trillion.”

Playing up those estimates, Goyal urged Japanese multinationals to consider expanding to India.

“No other part of the world will see such a big growth opportunity that India has to provide,” he said. “And therefore, I would invite Japanese companies who have already saturated the local market.”

Goyal said both New Delhi and Tokyo are keen to act as a “catalyst” for Japanese companies to quickly invest in India, citing a high-speed bullet train being built in India that incorporates Japan’s shinkansen technology as an example of that cooperation between governments.

In August, the Indian government announced a licensing requirement due to take effect in November for the import of notebook computers, tablets and similar devices. But the measure was revised to an import management system, having drawn the concern of U.S. Trade Representative Katherine Tai and others.

“This is a measure that is related to safety and security,” said Goyal, adding that the measures are not intended to hurt any of India’s trusted partners. “No U.S. or Japanese company has to worry at this stage.”

When asked whether the measure is protectionist, Goyal replied, “Not at all.”

“Japan has put so many measures for the security of the Japanese people, and the United States of America has put so many measures for the security of their people, particularly on technology products,” said Goyal.

The U.S. is leading the 14-member Indo-Pacific Economic Framework (IPEF), which includes Japan, India and Australia. Members are negotiating the framework’s four pillars of trade, supply chains, clean economy and fair economy. India, however, has not joined talks concerning trade.

“We wanted to make sure that anything that is decided in the trade pillar… should not be at the cost of the growth and prosperity of 1.4 billion people,” Goyal said, referring to India’s population.

At the same time, “there is a good possibility that if the negotiations come up with the agreement, which India can accept, we may even now join the trade pact,” he said.

Before arriving to Japan, Goyal visited Saudi Arabia. The minister said India and Saudi Arabia have elevated relations to that of a strategic partnership, and added the countries have talked about restarting discussions on a free trade agreement between India and the Gulf Cooperation Council, a six-member bloc of Persian Gulf countries.

The World Trade Organization will hold a ministerial conference in February. About the prospects for a breakthrough, Goyal said, “I am a born optimist.”

“Everybody in the WTO recognizes India’s important role in forging consensus…India will play a leading role to become a part of the solution,” he added. Goyal said that India is aiming to finalize the unresolved issue of public stockholding in the agricultural sector.

When asked about the possibility of Tesla building an EV plant in India, Goyal only said that “many companies including Tesla have shown a lot of interest to come to India… all companies including Tesla, and Suzuki, and BMW, and Mercedes, all are welcome in India.”

On the subject of the Israel-Hamas war, “India has always had a very consistent stance — we condemn terrorism in all its forms and anywhere in the world,” said Goyal.

“We ourselves are the sufferers of terrorism,” Goyal added. “And we have suffered from terrorism from our neighbors for decades now.”

Goyal is in Japan to attend the G7 trade ministers meeting on Saturday and Sunday. As the chair of this year’s Group of 20, India worked to act as a bridge between developed countries and emerging and developing countries.

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