China Plus One: India Better Placed Than Asian Peers For Japanese FDI, Says Deloitte Japan Chief Executive

(MENAFN- Live Mint) India has emerged as a major investment hub for Japanese businesses exploring a 'China-plus' supply chain strategy, Kenichi Kimura, chief executive officer of Deloitte Japan, said in an interview highlighting the steep increase in Japanese FDI into India in recent years.

Kimura, who was on a visit to India, said in an interview in the capital on Friday that India has the advantage of a big domestic market, which some of the other emerging Asian economies do not have. In addition, India also acts as a gateway for Japanese factories to export to the Middle East and Africa, which puts India in a sweet spot.

Figures speak volumes about the realignment of investment taking place in Asia. Data available from Japan's finance ministry showed India received 706.9 billion Japanese yen or over $5 billion in FDI from Japan in 2023, overtaking Japan's FDI into China and Hong Kong in that year, which stood at nearly 502 billion yen or roughly $3.6 billion.

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That was the first time India got ahead of China in receiving FDI from Japan. In 2022, China and Hong Kong together received 752 billion yen or $5.7 billion FDI, more than the over 539 billion yen or $4 billion India received, data from Japan's finance ministry showed.

The trend looks promising. The Global Trade and Investment Report 2024, brought out by the Japan External Trade Organization (Jetro), a Japanese government-related trade and investment promotion body, showed, citing provisional figures, that in January-May 2024, India received $1.8 billion of FDI from Japan, more than the $1.68 billion China received and the $897 million that Vietnam received.

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