So Close, Yet So Far

Japan-India investment promotion partnership

During PM Modi’s visit to Japan in September 2014, PM Abe and PM Modi signed a joint declaration in which Yen 3.5 trillion of fresh public and private investment and financing from Japan in five years was promised. The Indian side agreed to improve the investment environment in India to facilitate investment by Japan by promoting a ‘Special Package for Japanese Investment’. Its objective was to promote investment by Japanese companies in India.

There are, however, certain difficulties in the investment climate in India.

The foremost is power scarcity. For some regions (such as Gujarat and the vicinity of Chennai), foreign companies by and large face power shortages. Power breakdown and voltage fluctuations are a daily affair. In addition to power generation shortage, the foremost reasons are shoddy power grids where there is loss of power during transmission and power theft as factories and households steal electricity. Foreign companies are obliged to install captive power generation facilities in their factories to deal with power breakdowns. This is obviously unwanted extra investment. Most of the households have given up on getting uninterrupted power, while the affluent class and foreigners install power gensets in their homes.

Indian roads are also of poor quality. Expressways in the real sense of the term are very few in number such as the Delhi-Agra Expressway, Mumbai-Pune Expressway, and the Bandra-Worli Sea Link in Mumbai.

National highways are, on the whole, in poor shape. In addition to cars and trucks, one can find even bullock carts and carts pulled by camels on the same roads. Thus, these roads are extremely dangerous and accident prone.

When the author was staying in India, one of the Japanese companies making sheet glass with its factory in Gurugram complained that many of the glass shipments break on NH 8 during transportation. Maruti Suzuki that has factories in Gurugram and Manesar is also apprehensive about safe transport when it sends its cars on trucks. The DMIC (Delhi-Mumbai Industrial Corridor) will be a solution to this problem.

Drinking water and sewage systems are also a problem in India. Drinking water cannot be consumed without boiling and sterilization. Yet heavy metals cannot be isolated. In India, the majority of areas have no drinking water supply. Securing industrial water is also a source of headache. Access to water is a struggle for both companies as well as individuals.

In rural areas, as ground water is d