Karnataka beckons Japanese companies

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A Far Eastern ‘cherry blossom shower’ on Bangalore may not be far off, and not just because it now has a hospital named after Japan’s favourite flowers.

Karnataka and its capital Bangalore apparently figure high in the plans of many Japanese companies, which are looking at India as their overseas anchor.

Currently hosting 300 of the 1,500 Japanese companies that are present in the country, the State may well see this number swell to 500 in the next two years going by the present trend, says Deepak Anand, Director-Research for JETRO Bangalore. JETRO (Japan External Trade Organisation) works under that country’s Ministry of Economy, Trade and Industry.

By the number of Japanese companies, Bangalore ranks fourth after Delhi-NOIDA, Chennai and Mumbai. “By significance, Bangalore is above that. We expect to have 500 companies in Karnataka by 2016 and 1,000 Japanese companies by 2020,” Mr. Anand told The Hindu.

He said, “In the last ten years, Karnataka attracted $11 billion in foreign direct investments and Japanese companies accounted for 15 to 20 per cent of it. In recent years, their number has grown at a steady rate of 17 per cent a year [unlike in any other region in the country].

“This spurt is quite possible as the Chennai-Bangalore Industrial Corridor should be under implementation by then,” he added.

The latest to eye Bangalore are many mid-sized automobile component manufacturers, pharmaceutical companies and food supplement makers who are searching for suitable partners to do contract manufacturing.

Bangalore has a large number of USFDA-approved manufacturing facilities and has long been a hub for many contract manufacturers who have been making high-quality, unlabelled medicine for big names in the global drug industry. Many Japanese companies are now serious about getting their drugs made here, for selling back home.

Mr. Anand explained that behind this trend was the Japanese government’s plan to cut its high public healthcare bill by increasing the use of generic — or legally copied — drugs which are cheaper than inventors’ patented drugs.

As if in prelude to future arrivals, over the last couple of years, Mr. Anand said the 300-bed Japanese-style Sakra World Hospital (named after sakura or cherry blossom) has started on Bangalore’s outskirts; and the upmarket Brigade Road has The Kenkos store for Japanese lifestyle products. Six new ‘authentic’ restaurants run by Japanese expatriates have sprung up, or a four-fold growth in two years. A four-star hotel near tony M.G. Road has tied up with a Japanese company and replicated that country’s ambience on three floors, even throwing in their public bath. The Japanese are not known to be won over easily, but Bangalore’s record in pharma production seems to have won much of that battle. The other obvious pluses are its famous climate and easy living conditions.

Spurring the Far Eastern interest here, according to Mr. Anand, are two premium Japanese brands. Toyota started its car manufacturing venture with the Kirloskars nearly 17 years back in Bidadi near Bangalore, while Honda Motorcycle & Scooter India more recetnly rode into Narsapur near Kolar, about 60 km from Bangalore.

South India, Bangalore and Gujarat are the current favourites of Japanese and of late, their interest is spreading to the quieter Mysore and Tumkur.

A recent JETRO survey found that companies back home see India as a long-term destination. Mr. Anand said, “They also know that if they have to invest, they must do so now.”

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