Covid-19 provides opportunity to India, Japan to further strengthen ties: Report

The Covid-19 pandemic has provided a unique opportunity to both India and Japan to further strengthen economic ties by enhancing cooperation in areas like software development, modern technology, infrastructure and manufacturing, according to a report.

The report, prepared by Shardul Amarchand Mangaldas and FICCI, also said that Japan has always treated India as a preferred partner in terms of economics, trade and commerce. "Covid-19 pandemic has provided great opportunities for the two nations and its businesses to join hands and forge a new alliance in terms of harvesting the fruits of demographic dividend that India provides, and push India towards becoming a major global manufacturing hub amidst the changing economic atmosphere," it said.

The Japanese business community is upbeat about its investments and ventures in India, it said adding Japan continues to be the fourth largest investor in India. It suggested that policy reforms are required in India to bring in greater synergies and reap the benefits of the de-risking activities being undertaken by Japanese companies to move their supply chains out of China to countries like India, Vietnam, Thailand, Indonesia, Malaysia and Myanmar.

Shardul S Shroff, Executive Chairman and National Practice Head - Insolvency and Bankruptcy, Shardul Amarchand Mangaldas & Co, said, "We need to look at the pandemic as an opportunity to bring India and Japan's economic relationship closer". He said that the Indian economy holds the potential to bounce back quickly on the back of a slew of fiscal and economic measures undertaken by the government such as reduction in corporate tax rates, further reforms in the GST regime, revamping labour laws, taking measures to ensure ease of doing business, to attract foreign investment.

"While the Indian government has taken plethora of measures and policy decisions to make India an investor friendly destination for the Japanese business community, a lot more needs to be done to meet the new challenges posed by the pandemic and to harvest the investor sentiments looking for safe investment destinations," he added.

Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas & Co said that the technological and economic prowess of Japan coupled with India's strengths in manufacturing, skilled workforce and its large domestic markets will further strengthen the relationship between India and Japan. The report recommended certain steps such as simplification of the form to incorporate a new company and appoint directors, ensuring easy customs clearance procedures, and immediate refunds of GST credit related to exports.