Despite weak business sentiments, 51 % of existing Japanese companies to expand operations in India: JETRO
In 2021, 68% of the 1455 Japanese companies based in India expect to operate in profits compared to 2020. It signifies very a high expectation to the Indian market.
NEW DELHI/TOKYO: A recent survey conducted by the Japan External Trade Organisation (JETRO) has revealed that almost half of the existing Japanese companies in India incurred operating losses in the COVID-19-hit year 2020.
Merely 32% of the existing 1455 Japanese companies are expected to register operating profit during this time.
“Despite weak business sentiments, 51 % of the Japanese companies operating in India plan to expand their operations in India. This figure cheers very much to strengthen business ties between our two countries,” said Yasuyuki Murahashi Chief Director-General, JETRO, India while addressing Digital Conference & Exhibition on India–Japan Business Partnership in the New World Order organized by the Confederation of Indian Industry (CII) today.
JETRO had conducted the survey to ascertain the current condition of the Japanese companies in 19 countries of Asia and Oceana in 2020. And results were startling.
“As per the survey, a total of 32 % of the Japanese companies in India expect to generate an operating profit in 2020. However, 50% are expected to incur operating losses. This is the 3rd highest among 19 countries in Asia and Oceana,” Murahashi added.
JETRO Chief DG said that 90% of the reason for losses was the sales decline in the local market, and this was highest among all Japanese companies. It means most Japanese companies are dependent on the local market in India.
“Recently Corona cases are increasing sharply again, we have to find the way to business between the two countries….However, business confidence for India is expected to improve significantly in 2021.”
As per the JETRO survey, about 68% of the Japanese companies are expected to operate in profit in 2021 compared to 2020. It shows very a high expectation to the Indian market.
However, JETRO expects the Indian government also to contribute their part of responsibility in providing a congenial business environment for the Japanese companies to motivate them to expand their operations in India
In a word of advice, Murahashi said, “So, JETRO continues to extend support the potential companies which wish to expand their business and invest in India with the cooperation of union, state governments, and others. In order to do that, I would expect the Indian side to offer cooperation to Japanese companies and form economic policy to improve the business environment in India.”
As per the latest survey by JETRO, JCCI, and Embassy of Japan, the total number of 1455 Japanese companies remained almost the same during the last 3 years.
“We realize a booming trend to increasing number of companies to reach the certain level. But frankly speaking, I don’t expect a sharp increase in the next few years,” said Murahashi.
Related article: Total of 1455 Japanese companies operating in India till Oct 2020: JETRO, Japan Embassy
