Mumbai, India (CNN) – While Japan has a slowing economy and an aging population, India has just the opposite. That’s why the number of Japanese companies in India has doubled in the last two years.
Japanese businesses looking to expand are faced with problems at home, including a strong Yen, which makes exports expensive, and a weak economy, which means shrinking domestic demand. The result? Many Japanese businesses are looking to grow overseas, with India emerging as a favored destination.
Japanese companies are investing in various sectors of the Indian economy, such as automobiles, white goods and pharmaceuticals, and Japan has invested billions of dollars in the construction of an industrial corridor linking Mumbai with Delhi.
Sushil Jiwarjka is an industry leader who has led many Indian trade delegations to Japan. “Japan’s economy has been at an ebb for the last 10 years,” he told CNN’s Mallika Kapur.
“They’ve already invested substantially in China,” he added. “They see India as a huge market that is opening up.
There are now 800 Japanese firms in India and foreign direct investment from Japan to India has quadrupled in recent years, according to the Federation of Indian Chambers of Commerce and Industry.
One of the reasons Japan is investing so heavily in India is the people. A population of 1.2 billion – 60% of them under the age of 30 – means strong domestic demand.
It's this demand that's fuelling growth at Japanese camera maker Nikon, which set up shop in India five years ago. Its managing director says turnover has been doubling each year and the Indian market – though small – is promising.
“Compared with even the other prospective markets like China or Russia or Brazil, we strongly believe India is the most prospective market for us,” said Hiroshi Takashina, of Nikon India.
“Considering the potential, considering the huge population and a lot of lovers of photography, this is different from other countries,” Takashina added. “So, we are at least expecting more than 30% growth over the market every year for, say, the coming five to 10 years.”