Last year in March, Japanese Prime Minister Fumio Kishida, had announced an investment plan of Rs 3,20,000 crore ($42 billion) in India in the next five years.
Now in a latest, Takashi Suzuki, Chief Director General (South Asia), Japan External Trade Organisation (JETRO), has said that a substantial chunk of Japanese funds is expected to flow into the Indian startup ecosystem this year, according to a report by Economic Times.
Many Japanese business giants, including Suzuki, Toshiba, Toyota and Denso, among others, have already started collaborating with Indian startups, especially in the frontier technologies such health-tech, digital infrastructure and renewable energy.
JETRO is aiming to bring in more SMEs (small and medium enterprises) into India. However, the smaller companies are reluctant to come to India. Notably, only ~20% of the Japanese companies are large. Majority of the companies are SMEs in Japan.
Last year, Toshiba Software in collaboration with Japanese Venture capital fund -- Beyond Next Ventures (BNV) -- layed out big plans for India with the aim of dealing with social issues.
Quoting the Japanese VC fund BNV's Head of Business Development (India), Mayur Shah, the Economic Times report said, "Our main focus outside Japan is on India which consists of 20 per cent of our portfolio. We see the current situation in India as very similar to Japan's early-stage high economic growth. Young demographics in Japan then and in India now feel that the "onus is on them to solve social and business problems and not leave it to large corporations."
BNV, which is currently looking to raise the next fund, has already invested nearly $22.6 million in Indian startups.
"More than 72% of the Japanese companies are willing to expand their operations in India while for China 33.4% of Japanese companies are willing", said Takashi Suzuki.
Mr. Suzuki quoted an example of Uniqlo, a Japanese casual wear designer, manufacturer and retailer. He said that Uniqlo has already turned profitable within three years of entering the Indian market.
Japanese behemoths like Panasonic, Toshiba, Hitachi are also investing large chunks to develop their R&D (research and development) with an aim to make in India for the global markets. The companies are also looking at new sectors like e-commerce, healthcare, agro-tech, retail, automobiles and electronics.
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