Industry Trend Analysis - Quick View: Japan's Role In India's Infrastructure To Expand - OCT 2017

The Latest: Japanese Prime Minister Shinzo Abe is visiting India this week. In addition to attending the annual India-Japan Summit with Indian Prime Minister Narendra Modi, Abe is expected to announce investments in several industrial and infrastructure projects, and kick off construction of the Japan-backed USD12bn Mumbai-Ahmedabad High-Speed Railway. Japan is the largest foreign investor in India's infrastructure market, according to our Key Projects Database.

Implications: Japan's involvement in India's infrastructure industry will continue to accelerate, as the Abe seeks to expand overseas infrastructure investments to generate opportunities for Japanese construction and engineering firms, and as a counter to China's Belt & Road initiative. Japan is the largest foreign investor in India's infrastructure market by the number of projects, with the Japan International Cooperation Agency involved in USD1.7bn worth of projects in 2016.

This expansion will be further aided by Modi's 'Make In India' initiative, which has relaxed or eliminated foreign investment restrictions across many industrial sectors. For Japanese companies, operation and management opportunities will be generated as state governments privatize infrastructure assets such as airports, highways and railways.

Japan's Growing Role in Indian Infrastructure
India - Top Foreign Investors in Infrastructure by Projects (LHS) and JICA Funding By Region in 2016, JPYmn (RHS)
MDB = multilateral development banks. Projects include those in pre-construction and construction phases. Source: BMI Key Projects Database, JICA

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