Q&A: Takashi Shimada, President, Indo Business Centre Ltd

'Japanese investment will increase, but India needs to reduce tariffs'

Immediately after the March 11 earthquake and tsunami, a section of the industry feared Japanese companies might deepen investment cuts in India and elsewhere. Indo Business Centre Ltd President Takashi Shimada, who advises investors in Japan about India, tells Indivjal Dhasmana that investments could increase because skilled youth and equipment are lying idle in Japan. Edited excerpts:

Following the earthquake and nuclear disaster in Japan, do you see a fall in investments by Japanese companies in India?
No. I don’t think so because Japanese economy and markets are limited. Whether you like it or not we have to go beyond borders. We have to find a place somewhere to work and we got highly skilled people and they are lying idle. So are the machines.

So, you expect investments?
We have got the same amount of money. If we cannot invest in one place, what should we do? Bring it to others.

Do you find the investment climate in India conducive?
Besides physical infrastructure, Japanese workers want social infrastructure. After a day’s work is over, you go back home and may not find anything to do. So, what facilities are required to attract Japanese who stay in remote areas.

Do you find tariffs in India too high and policies closed?
If you compare tariffs in India with Asean countries, they are certainly higher and need to be reduced. So far as policies like FDI in multi-brand retail are concerned, it takes time for every economy to open up. In Japan, when we started importing vegetables and fruits from the United States, there was resistance. Once you open the doors and increase your efficiency, business will grow.

When do you think the Comprehensive Economic Partnership Agreement (CEPA) with Japan will be executed?
We are approaching the last stage — a nod from parliaments of both countries. Hopefully, it will be done by this year-end.

Do Japanese firms plan to invest in and provide technical know-how?
Yes, in the area of gas. For example, if you use diesel and oil, it produces lots of CO2. To mitigate that emission, you can use gas cogeneration. There are huge gas resources in offshore areas of Andhra Pradesh. If you can utilise them efficiently, you not only cut down on CO2, but provide more energy resources. In non-conventional sources of energy like solar, Japanese firms can collaborate with Indian counterparts. But, the government of India will have to subsidise 30-40 per cent of solar energy produced.