Dispute Will Affect Fdi Flow, Say Japanese Businessmen

Japanese business executives in New Delhi feel that the row dispute between the Union government and Suzuki Motor Company will affect the flow of Japanese investments into India. They are stunned over industry minister Marasoli Marans statement that Suzuki is welcome to withdraw from Maruti.

This is a wrong time for such controversy. Japanese investments in India have just started to grow. But the controversy will cause a phychological block, Kazuo Fujimoto, president of Japanese Association of Commerce and Industry in New Delhi told Business Standard.

Fujimoto, who is also the chairman and managing director of Sumitomo Corporation India Ltd, said that the weakening of markets in South-East Asia might have persuaded some Japanese companies to shift their investments to India.

 

Suzukis case is somewhat different from most other Japanese investments which have been made in private companies after the economic liberalisation begun in India. But it was Maruti which set an example to how it is possible to work in partnership with the government in India. This controversy will now discourage some Japanese investors, Masahito Ikeda, the chief of Export Import Bank of Japan New Delhi office said.

Both Fujimoto and Ikeda said Japanese investors made it a point to visit the Maruti plant whenever they visited India. Maruti has been the symbol of confidence in India. Jin Eda, general manager, at the New Delhi liaison office of Mitsubishi Heavy Industries Ltd, said We do not know the whole story. We hope this will not affect investment from Japan. But investments are guided by several factors and not by just one issue.

Japanese executives, however, make it clear that they are not likely to come out openly in Suzukis favour.