Last month, Japan’s Minister for Economy, Trade and Industry Yoichi Miyazawa & Industry Minister Nirmala Sitharaman signed a 5 point agenda to promote Make in India campaign, and to increase bilateral trade between India and Japan.
Yesterday, the first step towards implementing the same has been taken as Japan has identified 11 locations where they will set up industrial townships in India. These specialized townships would promote domestic manufacturing as well as act as major investment hubs for both Japanese and Indian companies.
Not only Japanese companies will train Indian skilled workers, but also enable technology transfer to strengthen India’s manufacturing capabilities.
Some of the cities which have been shortlisted by Japanese Govt.:
- Tumkur (Karnataka)
- Ghilot (Rajasthan)
- Mandal (Gujarat)
- Supa (Maharashtra)
- Ponneri (Tamil Nadu)
- Neemrana (Rajasthan)
- Jhajjar (Haryana)
- Integrated Industrial Township in Greater Noida (Uttar Pradesh/NCR)
Additionally, a Govt. official shared that Japan is looking forward to double their investments in India in the next 5 years.
At par With SEZs
As per the action plan signed between the two governments, these specialized industrial townships would be at par with Special Economic Zones (SEZs) and the new proposed National Investment & Manufacturing Zones.
As of now, SEZs have proved to be a major booster for setting up manufacturing and other units with several benefits such as:
- Duty free imports
- 100% tax exemption from income derived from export of goods and services (for first 5 years)
- Exemption from Central Sales Tax; Service Tax; State Sales Tax and other state enabled taxes
- External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
And more.
As per an official, Chinese industrial parks have also been formulated based on the SEZ format to benefit manufacturing sectors.
Japan-India Trade Relations
Since 2000, Japan has contributed 7% of overall FDIs (Foreign Direct Investments) in India, thereby making them 4th biggest foreign investor. Between April 2000 and February 2015, Japan has invested $18 billion, which is now expected to become $35 billion in the next 5 years. During the fiscal year 2013-14, Japan invested $1.7 billion.
Additionally, Japan has actively taken part in making the first stage of $100 billion Delhi-Mumbai Industrial Corridor a grand success, as they have invested close to $5 billion as of now. Japan International Cooperation Agency and Japan Bank for International Cooperation collectively hold 26% stake in this venture.
Besides launching these 11 industrial townships across India, Japan has also committed to initiate major projects in: Investment & Infrastructural Development; IT projects to the tune of $10 billion; Enhancing co-operation in strategic sectors such as defense and power; Creation of a mega Asia-Pacific Economic Corridor.
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