The Hindu Business Line : Japanese SMEs want easy entry, exit options

Small and medium enterprises in Japan planning manufacturing facilities in Tamil Nadu will need assurance on easy entry and exit options among a range of facilities to ease their entry, according to Mr Hiroshige Nishizawa, Chairman, Tokyo Tomin Bank, Japan.

Mr Nishizawa, who was a part of the delegation from Japan organised by the Japan Chamber of Commerce and Industry, recently addressed the Federation of Indian Chamber of Commerce and Industry on the prospects for the entry of Japanese businesses into Chennai. The Japanese investors will need assurance on legal issues, labour and procedural matters, which "should be clearly laid down".

Increasingly Japanese companies are examining options of coming to India. China has become expensive - wage costs are twice that in China.

Good resources

But companies from Japan are looking at Chennai not just for the low cost but also for the skilled human resource and advanced information technology expertise.

However, small and medium enterprises will need support to look beyond their boundaries.

As in China, they need easy entry and exit options, small and medium enterprises do not have the staying power of large companies.

If things do not go well they need to move out fast.

The Tamil Nadu Government could also facilitate entry of Japanese investments by making available rentable factory space in the initial stages, providing single window clearance for licenses and other paper work and providing Japanese language facilities in the offices.

Facilitating entry

Mr Nishizawa said, "Differences in culture is the greatest source of headache so a go-between is needed."

The Tamil Nadu Chief Secretary, Mr L.K. Tripathy, said that during the meeting of the delegation with the Chief Minister, Mr M. Karunanidhi, the Government had committed that it was willing to facilitate entry of Japanese companies to Chennai. The Chief Minister said that the Government would set up a Japanese industrial township near Chennai.

The leader of the Japanese delegation, Mr Nobuo Yamaguchi, Chairman, Japan Chamber of Commerce and Industry, said that Japan and India could do more to exploit the potential in their partnership. There are concerns of slow progress of private investments from Japan into India and clearance delays as compared to China. But there is potential to do better.

Japan came out of its decade-long recession due to economic and social reforms. India too is upgrading its infrastructure and welcoming Japanese companies. "The outcome would be observable eventually," he said.

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