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The past few years have seen a slowdown in global trade. Enough ink has been spent in chronicling how trade tensions between two super-powers have had an impact on not just their economies, but also on other economies. However, at the same time, some economic ties between countries have continued to deepen. One such bond that has continued to prosper is between India and Japan.
This is clearly visible from the bilateral trade between India and Japan, among other things. The bilateral trade between the two major Asian economies has gone up from .
51 bn in 2014-15 to $17.63 bn in 2018-19. The deepening ties can also be gauged from the fact that Japanese Prime Minister Shinzo Abe was the first foreign dignitary to congratulate Indian Prime Minister Narendra Modi on the latter’s thumping victory in the parliamentary elections in India in 2019.
Like any other long-standing relationship, the Indo-japan ties have also been cemented and nurtured over many years.
Indians probably got the first taste of Japanese efficiency through the Maruti Suzuki cars in the 1980s, which has eventually spread across through other automobile brands, electronics and even financial services.
Most notably, the Japan International Cooperation Agency (JICA) has consistently assisted infrastructure development in India in recent years. The rapid-transit or metro systems in several Indian cities as well as the high-speed rail project between India’s financial capital Mumbai and Ahmedabad are among the important tasks that JICA has put its commitment behind. The dedicated freight corridor between Mumbai and Delhi is another project that JICA is assisting India with, and has the potential to boost the economic activity across at least six Indian states.
The freight corridor, which is expected to be operational in the current year itself, will multiply the freight movement between the two major cities manifold, thereby boosting trade, exports as well as investments. The Japanese government has also been exploring investments worth around Rs 13,000 crore (Approx $2 billion) in the north-eastern states of India.
Apart from strengthening government to government relations, there have also been a flurry of activity on the corporate side, wherein major Japanese corporations have shown keen interest in Indian businesses. An outstanding example in this category is Nippon Life Insurance’s (NLI) expansion in India. The over a century-old Japanese financial service major, which is among the top 150 Fortune 500 companies, took a minority stake in erstwhile Reliance Mutual Fund in 2012. This was essentially part of the strategic investments that NLI has made in asset management companies across markets and geographies.
As the under-served Indian mutual fund market grew rapidly over the past decade, so did the influence of the Japanese conglomerate NLI in India. The Indian mutual fund industry went up from Assets Under Management (AUM) of less than Rs6 trillion in March 2012, to close to Rs24 trillion in March 2019. With such rapid growth opportunity, NLI gradually took up its share-holding in the asset management company it partnered with to 75% in 2019. That is how Nippon Life India Asset Management (NAM India) came in to existence. In fact, this was a first of its kind investment for the Japanese financial services conglomerate. For NLI, this is its only company and only joint-venture outside of Japan that has gone public and listed on the bourses.
This deal was also an example of the dedication of the Japanese NLI to the Indian market. The deal was a result of one of the largest Foreign Direct Investment in India in the financial services space. This sent a signal to the consumers of the financial services that the company is committed to serve the Indian masses through the next decade, thereby delivering Japanese excellence to them in the area that matters the most—trust to manage their money and turn it in to wealth.
Change of ownership is not a new phenomenon for the financial services sector across the world. This is true not just for the Indian market, but also for other economies. However, what has typically happened in India is that with the change in a company’s ownership.
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