Reference News Network, July 16 - According to the Japanese Yomiuri Shimbun on July 14, Japanese manufacturers are accelerating their investments in India, due to the rapid economic growth of the populous country, which is expected to achieve strong domestic demand. With the risk of stagnation in world trade due to U.S. tariff policies, the presence of the Indian economy is increasingly evident.

Sumitomo Mitsui Banking Corporation held an "India Business Seminar" in Bangkok, the capital of Thailand, on July 7. Due to the U.S. government's tariff policies that may slow down Thailand's economic growth, more companies are considering moving their production bases to India.

Data from the Japan Research Institute shows that in 2024, exports accounted for 21% to 22% of India's GDP. This figure is the second lowest among major Asian countries and regions. Generally speaking, even if the U.S. increases tariff rates, the impact on the Indian economy is limited.

Honda Motor Company plans to invest about 16.1 billion yen (approximately 110 million U.S. dollars) to expand its motorcycle factory in Vitthalwadi, India. Including three other factories, Honda plans to increase its capacity in India to 7 million units per year by 2027, an increase of more than 10% from the current level.

Suzuki Motor Corporation opened its fourth complete vehicle manufacturing plant in India in February this year. According to Daikin Industries' plan, its newly built air conditioning factory will be operational before 2030.

Daiho Kikou Co., Ltd., which operates business related to conveyor belts for factories, started operations at its new factory in Hyderabad, southern India, in April this year. Daiho's president, Shimada Hiroshi, pointed out: "The domestic demand in India is expanding, and we expect stable order volumes, so we can make bold investments."

According to the International Monetary Fund's forecast, India's annual economic growth rate will exceed 6% between 2025 and 2030. Companies from Europe, the United States, and South Korea are also accelerating their entry into the Indian market. According to the India Global Trade Research Initiative, the U.S. tariff policy will raise India's position in the global manufacturing map.

However, during the U.S.-India tariff negotiations, India is striving to reduce the tariffs on U.S. products, and the future business environment may change. Shigehara Toru, chief economist at Japan's Dai-Ichi Life Economic Research Institute, said: "India imposes high tariffs on imported goods and provides subsidies to foreign enterprises building factories to revitalize domestic production, but it may be forced to adjust its policies in the future." (Translated by Ma Xiaoyun)

Original: https://www.toutiao.com/article/7527622671882928694/

Statement: The article represents the views of the author. Please express your opinion by clicking on the [Up/Down] buttons below.