Things are about to change, Japan may open pharma sector to India: Baba Kalyani

Interview with CMD, Bharat Forge Limited

The India-Japan Business Leader's Forum  (IJBLF) was held last month in Tokyo and was streamlined by the CII, which is the secretariat for the forum appointed by the Government of India. Baba Kalyani, chairman and managing director, Bharat Forge Limited was nominated by the Government to be the chairman of IJBLF from the Indian side. Pravda Godbole spoke to Kalyani to take an overview of the forum and how will it leverage trade between the two economies.Excerpts

What is it that the forum has achieved?
The basic concept of this forum is to focus on areas that will increase the economic activity between the two countries. The areas that we have identified are infrastructure development, energy security and maritime security. Japan has already invested $4.5 bn  in the Delhi-Mumbai Industrial Corridor (DMIC) that is around Rs 18,000 crore of pure equity. Now, the attention will be turned to the Chennai-Bangalore Industrial belt where Japan holds 26 per cent equity stake and that is funding to a substantial level. The next is energy security towards which India and Japan will work together in countries like Africa, Latin America, and South East Asia. The forum announced that  Japan will cooperate towards increasing the maritime security and a nuclear agreement will also be signed, though it wasn't clear as to when it will happen.

What else did the forum focus on?

The focus was to make this a platform or a medium to long term strategic relationship and to tackle the pain points and road blocks and come up with solutions that will be implemented.

The general sentiment is that such forums only draw roadmaps to deal with issues but not many words are converted into action. As a chairman of the forum, do you think we will not see that happening?
Well, there are signs that show that Japan too is pretty serious about this entire affair. Culturally, Japan is a very closed market, it has a closed economy. Hence, many of our sectors were not allowed to touch their shores. But, now the story is different. The Emperor and Empress of Japan are set to visit India around end of this year. This has never happened before. Also, Japan is set to invest $ 25 bn by 2015. So, yes, we do see signs and they are positive signs.

Which Indian sectors will benefit from IJBLF?
Indian companies that will now be able to operate in Japan will be from the IT sector, pharma, auto-components and IT enable services as well. Japan is clear that it is ready to give an entry to good solid companies. Especially, pharma sector was never open to India but now things are about to change in that regard.

What are the demands that you have put forth in the capacity of the chairman?
Access to the Japanese market for the above sectors, removal of tariff related barriers, strengthening food exports especially sea food, a process in place which ensures quality control, access for Japanese markets to companies from the Indian services sector, pharmaceutical companies as well as auto component entities. Also Visa granting process must be simplified is what I put forth.

Does your role end there after putting forth these demands? How will you follow-up on them?
The forum meets twice a year. Next meeting will be in India around the Emperor's visit by end of 2013 or early 2014. If all goes well we should see a lot of traction then.

According to you what are the core-competencies of India that will help bilateral trade?
Japan has a large pool of capital and a shrinking work-force while India needs investment and its demographics sow that the country is getting younger. So India-Japan friendship is a win-win. Also both the prime ministers share a great personal chemistry. In my opinion that also is a helpful combination.

What is Japan's perception of India?
How do you think Japan perceives India? Here there is corruption, decision making is slow and we are going through difficult times. But, we told them that India is not what it was 10 years ago. Hence, to prove it, we need to make progress on DMIC and quickly. Whichever projects will start, they need to be executed well, which will create a confidence level. A framework has to be in place for the same.