Historically, India has always been a manufacturing hub. However, that came to a halt when the British invaded the country. Now, post the pandemic, the world has once again started to view India as the hotspot for manufacturing. Not just manufacturing, India is now also viewed as the top consumer market. All the top countries are placing their bets on India. Japan is one such country.
In an interview with ET, Masahiro Goto, head of investment banking at Nomura spoke about how Japan is putting there faith in Indian innovation. India and Japan have had a long-standing relationship with very strong economic and political ties.
India’s GDP is expected to grow at 6.5 percent and is on track to become the world’s third largest economy in the medium term. According to Goto, this puts India in a sweet spot. It is one of the few economies that offers both scale and multi-decade growth as a market. This is driven by the increasing domestic consumption and increasing spends on infrastructure. Thus, India presents itself as a very appealing proposition for overseas investments.
Furthermore, consumption sectors in India such as auto, consumer durables and healthcare are witnessing strong growth which attracts global investors. India is building its infrastructure for green energy and electric vehicles. The financial services sector too is seeing major investments due to high financial growth and under-penetrated markets for financial services. These sectors attract global investors, Goto told ET.
As a manufacturing base, India not only provide substantial opportunity for local manufacturers but also incentives and ease of setup for overseas manufacturers looking to expand their bases to other countries. To Japanese investors, India offers long-term growth with structural stability, low volatility and sustainable macro factors, added Goto. Japanese retailers have continued to invest in India through MFs and an increase in interest is being seen among institutional investors looking to enter India’s public and private markets.