India growth story to benefit Japan's firms, says Nomura
Japan is benefiting from India's growth story. Japanese companies and investors are showing heightened interest in India finds an anchor report by Nomura.
Japan's FDI in India has been gaining a growing presence, and Japanese investments in foreign equities (as of end-2022) showed India at the top of the list for developing countries although trade ties between Japan and India are currently weak. Japanese individual investors are also investing more aggressively in Indian stocks by way of investment trusts India at the top of the list among emerging market economies, the report said.
With the Indian economy maintaining high growth, Japanese corporations are showing more interest regarding investment in India, according to Nomura. “In the ranking of countries seen as promising for the medium term in the Japan Bank for International Cooperation (JBIC)'s FY23 Survey on Overseas Business Operations by Japanese Manufacturing Companies, India took the top spot for a second consecutive year, even as China fell to number three” the report, an collaborative effort by India’s and Japan’s economists and equity strategists.
Manufacturing sectors have been the main driver of Japanese direct investment in India to date, with transport equipment accounting for 35.1% of direct investment in the country, machinery equipment for 10.5%, and chemicals and pharmaceutical for 6.5% as of end-2022.
Significantly, Japanese financial institutions have been increasingly moving into India, and have maintained a certain presence in India
