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Yomiuri Shimbun
7 days ago
- Business
- Yomiuri Shimbun
Japanese Firms Investing More in India Amid Rapid Economic Growth; Domestic Demand Gives Companies Confidence
BANGKOK — Japanese manufacturing companies are accelerating their investment in India, with its rapidly growing economy and domestic demand that is expected to remain strong. With a population of over 1.4 billion, the largest in the world, the presence of India's economy is growing amid concerns about a global trade slowdown due to the U.S. tariff policies. Impact of U.S. tariff policy Sumitomo Mitsui Banking Corp. on July 7 in Bangkok held a seminar on business in India. The seminar was held because the Thai economy is expected to slow down due to U.S. tariff measures and an increasing number of companies are considering a shift in production to India. 'India's exports are not large, so the impact of tariff measures is relatively small,' said Hiroyuki Mesaki, head of SMBC's business in India. About 130 people, including Japanese corporate executives, attended the seminar. According to Japan Research Institute, Ltd., India's exports accounted for 21.2% of the country's gross domestic product in 2024 – the second lowest percentage among major Asian countries and regions after China's 20%. Therefore, it is viewed that the United States raising tariffs on imports from the country would have only a limited impact on the Indian economy. Honda Motor Co. plans to add a production line at its motorcycle plant in Vithalapur, southwestern India, through an investment of about ¥16.1 billion. Honda has three other factories in India, and it plans to increase its production capacity in India to 7 million units per year by 2027, up more than 10% from the current level. Suzuki Motor Corp., meanwhile, began operations at its fourth vehicle assembly plant in India in February. Daikin Industries, Ltd. plans to start operations at a new air conditioner factory by 2030. Daifuku Co., a manufacturer of factory conveyors, began operations at a new factory in Hyderabad, southern India, in April. 'India's domestic demand is expanding, so we can expect stable orders and make bold investments,' said Daifuku President Hiroshi Geshiro. Overseas firms see opportunity The International Monetary Fund forecasts that India's economic growth rate will exceed 6% annually from 2025 to 2030. Companies from Europe, the United States, South Korea and elsewhere are also accelerating their expansion into India. According to the Indian Commerce and Industry Ministry, foreign direct investment into India increased by 28% year-on-year to $53.1 billion (about ¥7.8 trillion) in 2024. Indian research institute GTRI expressed expectations for India's economy, saying, 'the U.S. tariff policy will enhance India's position in manufacturing.' However, in U.S.-India tariff negotiations, India has said it is prepared to lower tariffs on U.S. products, which could lead to changes in the business environment. 'India has promoted its domestic manufacturing sector by imposing high tariffs on imports and providing subsidies to foreign companies building factories, but it may be forced to change its policies,' said Toru Nishihama, a chief economist at Dai-ichi Life Research Institute Inc.
Business Recorder
08-07-2025
- Business
- Business Recorder
Japan will continue trade talks with US for mutually beneficial deal, Ishiba says
TOKYO: Japanese Prime Minister Shigeru Ishiba said on Tuesday that he would continue negotiations with the U.S. to seek a mutually beneficial trade deal, after President Donald Trump announced 25% tariffs on goods from Japan starting August 1. Trump on Monday started notifying trade partners, from major suppliers like Japan and South Korea to minor players, of steep U.S. tariff hikes, but later indicated a willingness to delay implementation if countries made acceptable proposals. While Tokyo and Washington have yet to reach a deal, Ishiba noted that recent talks had helped Japan avoid even steeper tariffs of around 30-35% as suggested previously by Trump. 'We have received a proposal from the United States to swiftly proceed with negotiations towards the newly set August 1 deadline, and that depending on Japan's response, the content of the letter could be revised,' Ishiba said at a meeting with cabinet ministers to discuss Japan's strategy on tariffs. Japan will 'actively seek the chance of an agreement that benefits both countries, while protecting Japan's national interest,' he added. Ishiba also asked his cabinet ministers to take steps to mitigate the blow from tariffs on industries and jobs. The latest development in the U.S. trade war drove the dollar up to a two-week high of 146.24 yen , potentially lifting already rising import costs. Japan failed to clinch a deal with the U.S. before a July 9 expiration of a temporary pause on reciprocal tariffs, due to its focus on eliminating a 25% tariff on automobiles - a mainstay of its export-reliant economy. With an upper house election on July 20, Ishiba has repeatedly said Japan will not make 'easy concessions' for the sake of an early deal with Washington. Recent media polls have shown Ishiba's ruling coalition may fail to maintain a majority in the upper house, which could complicate trade negotiations, analysts say. Japan, South Korea face 25% tariffs as Trump ramps up trade war in letters to leaders U.S. tariffs also add to woes for Japan's economy, which shrank in the first quarter on soft consumption. Real wages in May fell at the fastest pace in nearly two years, while the government on Monday made the bleakest assessment on the economy in nearly five years. 'While Japan likely averted the worst-case scenario, 25% tariffs would still hurt exporters' profits by up to 25%,' said Kazuki Fujimoto, an analyst at Japan Research Institute. 'If corporate profits worsen, it's hard to avoid companies from toning down on efforts to hike wages,' he added.
Kyodo News
27-06-2025
- Business
- Kyodo News
Rice imports to Japan surge in May, 3.5 times FY 2024 total
KYODO NEWS - 15 minutes ago - 18:32 | All, Japan Private sector imports of tariffed rice to Japan in May were 3.5 times the total volume brought in during all of fiscal 2024, revised government trade data showed Friday, as soaring prices of domestic rice have spurred demand for cheaper alternatives. According to the Finance Ministry's trade statistics, revised from a preliminary report issued earlier this month, 10,605 tons of tariffed rice were imported in May, a sharp increase from 115 tons in the same period last year. The United States, which accounted for 7,894 tons, was the largest source, followed by Taiwan, Thailand, and Vietnam. Prices of domestic rice have continued to surge due in part to a supply shortage, with an auction system initially employed by the government to release its stockpiles blamed for further inflating prices. Yasufumi Miwa, an expert on agriculture at the Japan Research Institute, noted that private imports may soon decline as the government has been selling stockpiled rice via direct contracts with retailers since late May, helping to ease prices. But Miwa warned that they may rise again if the price of newly harvested rice stays in the range of 4,000 yen ($28) per 5 kilograms. Japan currently imports 770,000 tons of rice annually tariff-free under its minimum access commitment based on World Trade Organization rules. Of that, up to 100,000 tons is used for human consumption. As the recent surge in rice imports falls outside this quota, they are subject to a tariff of 341 yen per kg. Related coverage: Japan rice price falls below 4,000 yen for 1st time since March Japanese restaurants, food companies switching to noodles from rice Japan's core consumer prices in May rise 3.7% on surging rice costs
Kyodo News
27-06-2025
- Business
- Kyodo News
Rice imports to Japan surge in May, 3.5 times FY 2024 total
KYODO NEWS - 13 minutes ago - 18:32 | All, Japan Private sector imports of tariffed rice to Japan in May were 3.5 times the total volume brought in during all of fiscal 2024, revised government trade data showed Friday, as soaring prices of domestic rice have spurred demand for cheaper alternatives. According to the Finance Ministry's trade statistics, revised from a preliminary report issued earlier this month, 10,605 tons of tariffed rice were imported in May, a sharp increase from 115 tons in the same period last year. The United States, which accounted for 7,894 tons, was the largest source, followed by Taiwan, Thailand, and Vietnam. Prices of domestic rice have continued to surge due in part to a supply shortage, with an auction system initially employed by the government to release its stockpiles blamed for further inflating prices. Yasufumi Miwa, an expert on agriculture at the Japan Research Institute, noted that private imports may soon decline as the government has been selling stockpiled rice via direct contracts with retailers since late May, helping to ease prices. But Miwa warned that they may rise again if the price of newly harvested rice stays in the range of 4,000 yen ($28) per 5 kilograms. Japan currently imports 770,000 tons of rice annually tariff-free under its minimum access commitment based on World Trade Organization rules. Of that, up to 100,000 tons is used for human consumption. As the recent surge in rice imports falls outside this quota, they are subject to a tariff of 341 yen per kg. Related coverage: Japan rice price falls below 4,000 yen for 1st time since March Japanese restaurants, food companies switching to noodles from rice Japan's core consumer prices in May rise 3.7% on surging rice costs
The Sun
18-06-2025
- Business
- The Sun
Japan exports fall amid US tariff threats
TOKYO: Japan's exports fell for the first time in eight months in May, data showed on Wednesday, indicating that sweeping U.S. tariffs were threatening the country's fragile economic recovery. Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump have yet to reach a trade deal. Tokyo is scrambling to find ways to get Washington to exempt its automakers from 25% automobile industry-specific tariffs, which are dealing a heavy blow to the country's manufacturing sector. It also faces a 24% 'reciprocal' tariff rate starting in July 9 unless it can negotiate a deal with Washington. Total exports by value dropped 1.7% year-on-year in May, data showed, smaller than a median market forecast for a 3.8% decrease and following a 2% rise in April. Exports to the United States plunged 11.1% last month from a year earlier, while those to China were down 8.8%, the data showed. The tariff threat had driven companies in Japan and other major Asian exporters to ramp up shipments earlier this year, inflating levels of U.S.-bound exports during that period. The data showed imports dropped 7.7% in May from a year earlier, compared with market forecasts for a 6.7% decrease. As a result, Japan ran a trade deficit of 637.6 billion yen ($4.39 billion) last month, compared with the forecast of a deficit of 892.9 billion yen. The hit from U.S. tariffs could derail Japan's lacklustre economic recovery. Subdued private consumption already caused the world's fourth-largest economy to shrink in January-March, the first contraction in a year. They also complicate the Bank of Japan's task of raising still-low interest rates and reducing a balance sheet that has ballooned to roughly the size of Japan's economy. The BOJ kept interest rates steady on Tuesday and decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its massive, decade-long stimulus. According to an estimate by the Japan Research Institute, if all the threatened tariff measures against Japan were to take effect, U.S.-bound exports will fall by 20-30%. Some economists say those duties could shave around 1 percentage points of the nation's gross domestic product. Japan exported 21 trillion yen worth of goods to the United States last year, with automobiles representing roughly 28% of the total. . ($1 = 145.3400 yen)
