Millennium Post

Modi-Abe bon homie revs up Indo-Japan biz forum

Seeking to enhance bilateral trade, business chambers of India and Japan have formed groups to focus on specific sectors like infrastructure, energy and skill development while working for removal of any bottlenecks by talking to the respective governments.

The decision was taken during a meeting of the Japan- India Business Leaders Forum here during the visit of Prime Minister Narendra Modi as he pitched for Japanese investments.

Leading Indian industrialist Baba Kalyani, co-chair of the forum, said there is renewed enthusiasm among the foreign investors as they feel execution of decisions will happen at a much faster pace given their experience of working with Modi as the Gujarat Chief Minister.

‘I think there is a lot of optimism on both sides about increasing relationship, economic relationship and bilateral trade,’ he said.

He said the Japanese businessmen ‘see in Modi a person who is great in execution and therefore are far more optimistic about what they want to do...I think the overall mood is optimistic.’

Kalyani, Chairman and Managing Director of the $2.5 billion Kalyani Group of companies, said the negative investor sentiment which prevailed in India for the past few years has now reversed and is ‘a lot more upbeat’.

‘They (Japanese businesses) all feel that with Modi leading the government, they will see execution happening at much faster pace. They are more optimistic in investing now,’ he said. With regard to outcome of the Japan-India forum meeting, he said a decision has been taken to form joint groups to take up some specific issues in the areas of infrastructure, energy, skill development, innovation and IPR related matters so that focused attention could be provided to them.

‘And let us say if bottlenecks are there, we can talk to the governments and set it right,’ he added.
Talking about the infrastructure sector in India, Kalyani said, ‘We talked about trillion dollars being invested’ and ‘one country that can make it happen is Japan because Japan has five trillion dollars in banks, sitting idle, doing nothing.’

A joint statement issued after the forum's meeting said the bilateral trade between India and Japan has declined to $16.3 billion in 2013-2014 as compared to $18.5 billion in 2012-2013. To correct this situation, there is a need to promote Japanese investment in high technology manufacturing in India as well as promote value added exports from India to Japan, it said. Underlining the need for a result-oriented focused approach of achieving these things, Kalyani said the forum meeting discussed about clearances which were an issue earlier.

‘A lot was stuck in environment ministry. That is easing away,’ he said, adding ‘the bigger issue is taxation’ and there should be clear transparent rules. In this context, he referred to General Anti-Avoidance Rules (GAAR), saying it is a problem.

‘Our basic taxation system is good. If you look at corporate taxation, personal Income tax, VAT, Excise... They are good. But we have hundreds and hundreds of rules that we put in on how to interpret these (taxes) like GAAR. ‘When a business guy comes in, he wants to come in with a clear idea of what is going to cost him to do business here. But after he has come in, you tell him it is going to cost Rs 100 more, I am sure he won't feel good,’ the industrialist said.

Asked whether he was hopeful of GST materialising this financial year as announced by the
government, Kalyani said, ‘I think so because it is in the benefit of everybody.’
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