$1.65-bn SAR aircraft deal likely to take off during Modi’s Japan visit

A pending deal involving purchase of 15 ShinMaywa US-2i Amphibious and Rescue (SAR) aircraft for $1.65 billion is likely to be sealed when Prime Minister Narendra Modi visits Japan shortly.

 

A pending deal involving purchase of 15 ShinMaywa US-2i Amphibious and Rescue (SAR) aircraft for $1.65 billion is likely to be sealed when Prime Minister Narendra Modi visits Japan shortly.
MoD sources said in march, a delegation of senior officials, including from the Navy, visited the facilities where the amphibious aircraft is being produced. They also sought to iron out issues related to modifications "that would allow Japan to export the aircraft to India without violating its self-imposed defence export restrictions".

A friend-or-foe identification system will be removed from the aircraft, a defence official said. Both countries had, at that time, also discussed the possibility of India being permitted to assemble the aircraft indigenously, giving it access to Japanese military technology. The deal was put on hold because of general election in India.

"The deal is significant for a variety of reasons. On the surface, it’s another indicator of growing cooperation between India and Japan on security matters. The deal is doubly significant in the context of India’s relations with Japan because once India clinches the deal, it will become the first country to purchase defence equipment from Japan since the latter’s self-imposed ban on defence exports began in 1967. The deal is important for Abe as it would open up Japan's defence industry for additional contracts with foreign partners,” said diplomatic sources.

Modi is expected to visit Tokyo enroute the BRICS summit in July, where he will meet with his counterpart, Shinzo Abe.
According to Japanese officials, the proposed sale of ShinMaywa US-2i amphibious, fixed-wing aircraft would not infringe on Japan's self-imposed ban on arms exports because the aircraft to be given to India will be unarmed and can be used for civilian purposes. The plane, built by ShinMaywa Industries (7224.T), could be outfitted for firefighting or as a kind of amphibious hospital and costs an estimated $110 million per unit. The plan is to deliver two aircraft and, then, assemble the rest of the planes with an Indian partner.

The Navy had issued requests for information on amphibian planes in 2010 to ShinMaywa, Canada's Bombardier for CL-415 platform, Russia's Beriev for Be-200 and US/German company Dornier for Seastar CD2. The Navy is also interested in Japanese patrol vessels and electronic warfare equipment as Tokyo moves further on easing its ban on military exports, the officials said.

Kochadaiiyaan to get a mega release in Japan

Superstar Rajnikanth's Kochadaiiyaan which is being directed by Soundarya Rajnikanth Ashwin is made with photo-realistic performance capturing technology.

According to a press release, in US, a leading Hollywood special effects studio watched the film and was amazed that this film was made in India. In US the audiences gave standing ovation after watching the film. Kochadaiiyaan is into its 3rd week and is running in 350 screens in South India. There is a screening of Kochadaiiyaan planned for British film institute in London which will happen by the end of this month. Kochadaiiyaan has been invited to almost all the festivals all over the world. The producers are planning a mega release in Japan shortly.

FDI diplomacy with Japan at play

New Delhi, June 8: The new Narendra Modi-led government plans to change the way Indian diplomacy is conducted by focusing on what moves the world — money.

With that aim, Modi will look to work his charm on cash-rich Japan for investment and trade. New Delhi is keen to offer strategic engagement and preferential status to Japanese businesses trying to find a second home after China turned costly and at times threatening.

Modi, who’s also being courted by China whose foreign minister Wang Yi is currently here, will be visiting Japan early next month. Japan will be his second state visit after Bhutan.

India, Japan and the US will also hold three-way talks later this month, focusing on foreign direct investment (FDI) and defence ties.

Terms of endearment

India is likely to offer to Japanese investors enclaves along the Delhi-Mumbai industrial corridor, rollback of retrospective taxation that saw tax demands of $3 billion from companies such as Mitsubishi, preferential treatment in investment-related clearances and regular economic dialogues on the lines of India-US talks.

Besides, India is likely to allow FDI in railways, paving the way for an India-Japan joint venture to build a bullet train using the Japanese Shinkansen technology that has been preferred over French and Chinese offers.

The carefully crafted diplomatic move follows a series of visits Modi made to Japan as the chief minister of Gujarat.

After Modi won the elections last month, a bout of public bonhomie followed with Abe tweeting, “Great talking to you, Mr Modi. I look forward to welcoming you in Tokyo and further deepening our friendly ties.” The tweet from the usually dour Japanese Prime Minister was unusual. But Abe has long treated Modi as a kindred spirit. Both are ultra-nationalists, committed to making economics the cornerstone of diplomacy.

Modi, as the chief minister of Gujarat, has long been involved in the Japan-funded Delhi-Mumbai corridor as it passes through his home state, Gujarat.

Modi hopes the indus- trial zone will draw Japanese investment not only in Gujarat but also in northern and western India.

Sea link

Tokyo is also in talks to partner India in developing ports along the eastern coast to improve sea connectivity with Southeast Asia. This will lead to better maritime links with Japan as part of an Asian supply chain network and can be seen as a rival project to China’s sea-borne Silk Route under which the latter has developed ports in countries surrounding India.

“We are interested in this project and are involved in a survey on this,” Shinya Ejima, chief representative, Japan International Cooperation Agency (JICA), India, told The Telegraph.

The ports, which will be improved to enable them to receive more traffic, will include Haldia, Vizag, Ennore and Chennai. The JICA has committed around 700 billion yen to the Delhi-Mumbai corridor.

According to finance ministry officials, Modi’s advisers see infrastructure projects driving Japanese investment in India. A survey by the Japan Bank for International Cooperation in November 2013 showed Japanese businessmen placed India as “the most promising country” ahead of China, Brazil, Vietnam and the US in the long term.

Around 87 per cent of the companies surveyed appreciate the “future growth potential of local markets”, though more than half said “underdeveloped infrastructure” was India’s Achilles’ heel.

Sanjeev Sinha, a Tokyo-based fund manager who advises Japanese companies investing in India, said, “The top management of Japanese firms recognise the strategic importance of India as an investment destination… (which is backed by) commitment from political leadership starting from the Prime Minister.”

Beijing concerns

Higher wages in China, tough stand of the state towards Japanese firms doing business there, lack of transparency in administering rules and intellectual property rights and anti-Japanese demonstrations in 2012 because of tensions over Senkaku islands have made Japanese companies wary of investing further in the giant neighbouring economy. Japan is the largest foreign investor in China’s $5-trillion economy.

Southeast Asia has been the biggest beneficiary of the shift in Japan’s choice of investment destinations. The region now accounts for 7.2 per cent of Japanese overseas equity holdings, up from 4.3 per cent in 2010. In India, Japan has invested over $16.26 billion over the last 14 years, including nearly $7 billion in the last 5 years.

Production push

Automobiles are expected to be the biggest draw for the Japanese in India. NYK Line, which dominates global shipping of cars, expects India to step up production of automobiles to 5 million by 2015 from 3 million now.

Much of that increase will come from Suzuki, which is planning a Rs 5,000-crore plant in Gujarat. Nissan, Honda and Toyota along with a clutch of auto parts makers are also expected to be major investors in India over the next three years.

en-Japan Acquires Recruitment Agency NewEra Consultancy

@Tilak

Japanese recruitment and post employment solutions provider en-Japan Inc has acquired 60% in New Era India Consultancy Pvt. Ltd, a job placement firm for INR 345 Mn, making it a subsidiary. As per the agreement , en Japan and en Asia holdings Ltd., a consolidated subsidiary, will acquire 60.0% of the total issued shares of New Era from Founder Arvind Sehgal, the largest shareholder of New Era (95%). The residual 40% will be acquired by the company in 2016 to make it a wholly owned subsidiary. The buy would enable en-Japan to access the New Delhi based company’s clients and further enhance its transactions particularly with the Japanese firms. Bridge & Sun Partners, a Tokyo based investment banking firm advised en-Japan on this deal. Established in 2000, New Era is a recruiting company targeting high-class professionals in India with core focus in introducing IT professionals with a large number of global clients. In addition to its head office in New Delhi, New Era has offices in major cities (Bangalore and Mumbai) with plans for further expansion in India. The 331 men strong company had a topline of INR 157 Mn with a operating income of INR 27 Mn and net income of INR 20 Mn for the FY13. enJapan was also established in 2000 and engages itself in offering Recruitment service and post-employment support, Internet- based job information service, job placement, employee training, H&R consulting, aptitude tests in Japan, Australia, South Korea, Singapore, Vietnam, Hong Kong, Thailand and China. As 67.6% of the population in 2025 will be in the working-age population, recruitment services are expected to expand and enJapan seeks to capitalize on this opportunity. As per MyHiringClub.com's survey, FMCG would lead the chart and is expected to generate 1.5 lakh new jobs, followed by healthcare (1.33 lakh), IT and ITeS (1.21 lakh), retail (86,700) and hospitality (83,400). Banking and financial services (61,400), manufacturing and engineering (51,500), education, training and consultancy (42,900), media and entertainment (42,800) and real estate (38,700) are also expected to create job opportunities. The number of Japanese companies launching business in India has doubled over the last five years. By 2013, 1,072 companies had entered the market in India. Some of the recent inbound Japanese deals include: Japan’s staffing firm Outsourcing Inc had acquired a majority stake of 51% in Bangalore based staffing and HR outsourcing services company Alp Consulting and its subsidiary Datacore Technologies Private Limited for $5 Mn. @NuGrid_Consulting Private Limited had been acquired by Japanese HR service provider Recruit Holdings through its wholly owned subsidiaries - RGF Hong Kong and RGF HR Agent Singapore for nearly R150 Cr

OMRON : OPENS ITS FIRST AUTOMATION CENTRE IN INDIA

Omron Corporation Japan has opened its fifth global automation centre in Mumbai. This is the company's first automation centre in India. The centre aims to showcase Omron's expertise in sensing and control technology. The centre will display Omron's key portfolio of industrial automation range as well as the company's technical and application support capabilities. Omron is a global leader in the field of automation and employs 36,000 employees in over 35 countries.

Japan, China vie for India's new prime minister Narendra Modi's heart

Japanese Prime Minister Shinzo Abe follows only three personalities on Twitter. One is India's newly minted Prime Minister Narendra Modi. So it came as no surprise when Abe dispatched a congratulatory tweet to Modi minutes after it became clear that the latter would occupy the prime minister's official residence at 7 Race Course Road in New Delhi. Modi's tweet in response read, "I am sure we will take India-Japan ties to newer heights." It sounded as though the two politicians were continuing a previous conversation rather than forging a new relationship.

Much of Shinzo Abe's economic reforms in Japan will not bear fruit without a significant emerging market driving the growth of Japanese industry. Japanese exports to China declined by 18% in the 12 months leading to the Indian elections. The decline was triggered by the controversy over the Senkaku (or Diaoyu, in Chinese) Islands and is unlikely to reverse course in the near future.

Meanwhile, many Japanese companies are well entrenched in India but suffered at the hands of the previous outgoing United Progressive Alliance government. Two major Japanese corporations, Mitsubishi and Honda, were slapped with tax recovery notices to the tune of US$2.6 billion following a retrospective amendment to a tax law in India. All this makes Modi look like a white-bearded Samurai savior in the eyes of Abe's business-minded constituents.

The annulment of tax demands might be on top of Abe's wish-list, but there is much more that he expects from Modi. Japan has cultivated India as an export destination for a long time by funneling investment into big ticket infrastructure projects such as the Delhi-Mumbai corridor. Abe would like this trend to continue. India might consider inviting Japanese investment in its Northeast region as a fitting reply to China's claim over what it calls South Tibet. Modi has already inducted a retired army general to supervise the impending boost to infrastructure in this region.

Regarding Delhi Mumbai Industrial Corridor (DMIC) project, Indian author and activist Arundhati Roy wrote in her book Capitalism: A Ghost Story

It will be connected to the Delhi Mumbai Industrial Corridor (DMIC), a 1,500-km-long and 300-km-wide corridor with nine megaindustrial zones, a high-speed freight line, three seaports, six airports, a six-lane intersection-free expressway, and a 4,000-mw power plant. The DMIC is a collaborative venture between the governments of India and Japan, and their respective corporate partners, and has been proposed by the McKinsey Global Institute. The DMIC website says that approximately 180 million people will be "affected" by the project. Exactly how it doesn't say. It envisages the building of several new cities and estimates that the population in the region will grow from the current 231 million to 314 million by 2019. That's in seven years' time.

When was the last time a state, despot, or dictator carried out a population transfer of millions of people? Can it possibly be a peaceful process? The Indian army might need to go on a recruitment drive so that it's not taken unawares when it is ordered to deploy all over India. In preparation for its role in Central India, it publicly released its updated doctrine of military psychological operations, which outlines "a planned process of conveying a message to a select target audience, to promote particular themes that result in desired attitudes and behaviour, which affect the achievement of political and military objectives of the country." This process of "perception management," it said, would be conducted by "using media available to the Services."

Abe will also expect Modi to replicate the Gujarat model of governance delivery at the national level. A simplified indirect tax system, time-bound land acquisition schemes and transparency in industrial licensing will be essential ingredients of this model. This will allow Japanese companies to maximize their growth prospects in India and will give Abenomics a new lease of life.

In what appears to be an unintentional Machiavellian twist, Modi has managed to cultivate an equally friendly relationship with China. More surprising is the fact that the Modi-China relationship is now burdened with exactly the same expectations as the relationship between Modi and Abe.

Chinese engineering, procurement and construction contractors are thirsting for a bigger slice of the $1 trillion infrastructure outlay in India over the next five years. Chinese manufactures of mobile phones, transformers and everything else in between have announced plans to enter the Indian market. Low interest loans from Chinese banks that will accompany the activities of Chinese companies in India is also a carrot that India cannot easily ignore.

India too has spruced up its wish list. Last month, the country's first ever service sector delegation to China reached Beijing making a case for Indian information technology and pharmaceutical companies that have been struggling to make headway in the China's domestic market. China's only positive response so far has been an admission that Indian movies are popular among its citizens and cultural co-operation is vital. Everything else is being held back until China gets what it wants from India.

China is rushing its foreign minister to New Delhi on June 8 to ensure that Modi does not overlook its interests as he gets down to business. With the India-China border dispute being tamed by a joint dialogue mechanism over the past several years, the stage appears to be set for a decisive barter where both parties are completely aware of what the other wants in the economic sphere.

This is the first time that the Chinese state media has provided extensive coverage of an Indian general election, so most Chinese are familiar with Modi. It also helps that most Chinese can pronounce Modi's name without much difficulty. Chinese businessmen who have visited Gujarat province, where Modi was chief minister, look at him as a messiah and are relieved that India's democratic process could finally elevate an effective leader.

The courting of Modi by Japan and China certainly resembles a Bollywood plot. But whom will Modi embrace and when? One can only enjoy the songs and drama while waiting for a happy ending.

Japan ferrochrome spot prices rise on output cuts in India

Japanese spot import prices of high-carbon ferrochrome rose this week as Indian producers cut output amid a decline in domestic chrome ore feedstock supplies, market sources said Friday.

Platts assessed the spot price of high-carbon lumpy ferrochrome at 91-93 cents/lb CIF Japan Friday, up from 90-91 cents/lb CIF Japan a week ago, on three deals reported.

One deal for 100-200 mt and another for 500 mt were confirmed by both buyer and seller at 91-92 cents/lb CIF Japan for June shipment from India's east coast. A third deal for over 100 mt was reported at 93.5 cents/lb CIF Japan for low phosphorous material, or maximum 0.02%, and normalized to 93 cents/lb CIF Japan.

Platts takes into account deals for 10-100 mm lumpy material with minimum 60% chrome, 2-4% silicon, around 8% carbon and 0.02-0.05% phosphorous content, with a minimum volume of 100 mt on a CIF Japanese main port basis.

One Omani producer offered 89-91 cents/lb CIF Japan for 0-10 mm powder with around 47% chrome content this week, which failed to attract buyer interest, a Japanese trader said.

Seller and buyer sources said spot trade was lackluster this week as most Japanese end-users were focused on low and mid-carbon ferrochrome, which were seeing supply from Russia and Kazakhstan tighten. An Indian producer source said he received inquiries only from Europe this week.

The Japanese trader said: "End-users think high-carbon prices will stay cheap for a while, but I have concerns about supply tightening."

A second Japanese trader, who pegged the current spot price at 94-95 cents/lb CIF Japan, said: "Non-integrated Indian producers [buying chrome ore from third parties] are in a panic. End-users will be so too, eventually."

A non-integrated Indian producer source pointed to low run rates in the country, saying: "Producers are generally at below 40%."

Visa Steel is said to have cut output at its 50,000 mt/year plant since May. Platts was not able to confirm with the company.

Rohit, another non-integrated producer with a 70,000 mt/year production in West Bengal, may have cut output too, market sources said. The producer could not be reached for confirmation.

A third non-integrated producer was heard shifting to manganese alloy production. The producer did not respond to Platts' inquiries.

ORE MINING BAN

Non-integrated producers are being forced to curtail output as chrome ore supplies from Tata Steel were cut after it was ordered to suspend mining on May 16 by the Odisha State Supreme Court.

The first producer source said his company typically sourced more than 50% of its chrome requirements from Tata. The only other local supply source was the state-run Odisha Mining Corporation, or OMC.

OMC is expected to issue a tender to sell around 50,000 mt of chrome ore next week. Indian state-run Metal & Mineral Trading Corporation issued a 10,000 mt chrome ore export tender Wednesday that closes June 18.

Two non-integrated Indian producers that were said to be cutting output continued to offer spot cargoes this week, a third Japanese trader said. Ferrochrome supply from India typically falls in June as seasonal monsoons lower output at feedstock ore mines, producers said.

With domestic feedstock supply tightening, Indian ferrochrome producers said they were increasingly seeking spot ore imports from Oman and Turkey.

Spot inquiries are expected to pick up next week after Korea Resources Corp. closes a buy tender June 10 for over 1,000 mt.

Market sources said it was possible spot prices would surge if inquiries increased and spot supply ran thin.

Japan coordinating Modi's visit in July

The new Indian Prime Minister Narendra Modi plans to visit Japan in July. He is apparently trying to emphasize the importance he places on bilateral relations.
India's Foreign Ministry on Friday announced that arrangements are underway for Modi to visit Japan to hold talks with Prime Minister Shinzo Abe.
Modi took office on May 26th as he led his Bharatiya Janata Party to a sweeping victory in recent parliamentary elections and realized India's first change of power in a decade.
The new prime minister plans to visit neighboring Bhutan at the end of June. The Foreign Ministry says Japan is likely to be Modi's second foreign destination.
Modi has pledged to revitalize India's economy. He has attached importance to developing economic ties with Japan to promote more investment to his country.
Meanwhile, the Japanese government is set to deepen economic and security cooperation with India in the face of China's increasing maritime activities in the East and South China Seas.

Injack signs MoU with Yokohama India Centre

It was in Yokohama that Indian merchants first entered Japan about 150 years ago and established their business base

The Indo Japan Chamber of Commerce Kerala (Injack) today  signed an MoU with Yokohama India Centre (YIC) for mutual cooperation in promoting business between Kerala and Japan.  The signing ceremony was held during a video conference between officials of the two organisations  at Nippon Kerala Centre in Kinfra hi-tech park, here.
T  Balakrishnan,  president of Injack, and   Yoshihiro Nishida, co-chairman of Yokohama India Centre, signed the MoU. Injack is only the third organisation in India with which YIC has similar MoUs, the other two being Indian Merchants Chamber (IMC) and Federation of Indian Chambers of Commerce & Industry (Ficci).
Yokohama has a long history of doing business with India.  It was in Yokohama that Indian merchants first entered Japan about 150 years ago and established their business base.  Since then Indian business presence in Yokohama has increased manifold and now several big Indian IT companies, including Infosys and TCS, have branches and some like TVS have  manufacturing units there.  
With the signing of  the MoU,  business cooperation in the SME sector is expected to get a boost, as the focus of Injack is on developing  business in the SME sector. Injack has already identified 50 SMEs in and around Yokohama for business matching with SMEs in Kerala.
Balakrishnan proposed partnerships between women entrepreneurs of Kerala and Japan in the SME sector.
A survey by a Japanese consultant to identify more specific areas of interest to Japanese entrepreneurs was also mooted.  A delegation of Japanese business persons is likely to visit Kerala early next year.

JAPAN'S ISUZU MOTORS PLANS TO SELL 50,000 PICKUP VEHICLES IN INDIA

Isuzu Motors of Japan, which has a fully owned subsidiary in Chennai, aims to sell 50,000 pickup vehicles in India in the next few years to gain market leadership. It has earmarked Rs3,000 crore investment for a 1.2 lakh units per year manufacturing facility. Isuzu has started assembling `D-Max' pickups at Hindustan Motors' Chennai plant. It will crank up sales once its own manufacturing facility in Sri City in Andhra Pradesh gets on stream in 2016.