Japan is the 5th largest source of foreign direct investment in India. The success of the Indo-Japanese joint venture Maruti Suzuki has motivated Japan to create another collaborative success story. The investors hailing from the land of rising Sun are keen to explore more opportunities in India and this time, Punjab is their focus.
In the last few years, Punjab and Japan have collaborated in manufacturing and technology to create better quality products, explore new markets, and pass on the benefit of advanced technology to the ultimate consumer.
So what happens when Japan’s precision meets Punjab’s passion?
Collaborations like Vardhman and Aichi Steel Corp; Yanmar and Sonalika; Toppan Printing and Max Specialty Films mature and yield all-pervading socio-economic benefits.
How would Punjab-Japan collaboration benefit the State’s industry?
- Capital Infusion – Japanese investors see Punjab as the land of opportunities and capital growth. In the last few years, Japan’s Aichi Steel Corp invested approximately INR 500 million and acquired an 11.4% stake in Ludhiana-based Vardhman Special Steels. Sumitomo Corp. invested INR 200cr in SML ISUZU, India’s leading makers of small buses and trucks.
- Massive Expansion – With financial and technical know-how support from Yanmar, Sonalika Tractors has implemented this action plan to expand and launch new hybrid Tractors in India – Micro Hybrid, Mild Hybrid, and Plug-In Hybrid.
- Growth Momentum – The economy of Punjab has been on a growth trajectory with the active support of global investors. For example, one of the leading manufacturers of fine blank, metal sheet parts, and sub-assemblies in Punjab, New Swan Technologies have collaborated with Gunma Seiko for manufacturing of precision Cold forging components for Automotive & General industry.
- New industrial hubs in the State – Many Japanese companies are keenly scouting for alternate investment destinations in Punjab to replace their dependence on China and strengthen their supply chain in the process. Such investments would go a long way in developing the virgin towns and cities of Punjab as industrial hubs.
What is in for Japan?
- Punjab’s entrepreneurial spirit & skilled manpower – Japan is known for its productivity consciousness and Punjabis are known for their entrepreneurial spirit that has created successful business ventures all across the world. The state is home to a hard-working human resource base; the MNCs operating in Punjab have appreciated the cordial labour relations in the State. Any collaboration between Japan and Punjab would bring the best of both worlds on one platform.
- Infrastructural strength of the State – Punjab’s strategic location and connectivity benefit is one of the biggest lures. While taking part in “Agri Tech Seminar – Japanese Technologies for Value-added Agriculture and Food Processing” organized by CII in January 2020; Japan had shown in keenness to create a Maruti Suzuki in India’s agro and food processing sector. Punjab with its robust network of Mega Food Parks, Cold Chains, Dry ports, and 100% road connectivity could emerge as Japan’s choice.
- Financial Incentives – Punjab’s New Industrial Policy of 2017 has succeeded in wooing the industry owing to lucrative financial incentives. Punjab is the only state in India that refunds Integrated GST (tax on inter-state supplies) and state component of GST (SGST). The attractive incentive policy coupled with a power tariff of Rs 5 per unit ensures industries can operate cost-effectively.
- A welcoming government – Punjab is ready to walk the extra mile for Japanese investors and sweeten the deal offering them much more than financial sops. The state’s single-window facility Invest Punjab extends absolute support to ensure fast-track execution of projects. Invest Punjab’s commitment to transparency and timeliness is a perfect match to the Japanese work culture. Invest Punjab has even created a dedicated Japan Desk to help the Japanese investors explore and execute their Punjab entry and operation plans.
The State recently held a series of webinars with Japan, organized by the Indian Embassy at Tokyo presenting the unlimited opportunities and enormous growth potential in the agro-processing field in Punjab. The fact that the Punjab government has started training its teachers in Japanese under the Punjab Skill Development Mission speaks how well-prepared Punjab is to say Konnichiwa to Japanese investors!
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