“DIFFERENT ASPECTS OF JAPAN” PDF 2013/708 Japan Chaudhari 5-.pdf · The research for “Global Country Report titled “Different Aspects Of Japan” is carried out to study the

GLOBAL / COUNTRY STUDY AND REPORT

“DIFFERENT ASPECTS OF JAPAN”

Gujarat Technological University

IN FULLFILLMENT OF REQUIREMENT

OF THE AWARD FOR THE DEGREE OF

MASTERS OF BUSINESS ADMINISTRATION (MBA)

UNDER THE GUIDANCE OF:

Prof. Bhumika Raval (Assistant Professor)

Prof. Megha Bakhai (Assistant Professor)

MBA SEMESTER

CHAUDHARI TECHNICAL INSTITUTE

A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“DIFFERENT ASPECTS OF JAPAN”

SUBMITTED TO:

Gujarat Technological University

IN FULLFILLMENT OF REQUIREMENT

OF THE AWARD FOR THE DEGREE OF


UNDER THE GUIDANCE OF:

Prof. Bhumika Raval (Assistant Professor)

Prof. Megha Bakhai (Assistant Professor)

SUBMITTED BY:

(BATCH: 2011-13)

MBA SEMESTER – III/IV

CHAUDHARI TECHNICAL INSTITUTE

GANDHINAGAR.


STUDENT’S DECLARATION

We, the students of Chaudhari Technical Institute (Batch 2011-2013), hereby

declare that the report for Global/Country Study report entitled “Different Aspect Of

Japan” is a result of our own work and our indebtness to other work publications,

references, if any, have been duly acknowledged.

Place: Gandhinagar

Date:

PREFACE

“Experience is the best teacher”

Teaching gives the knowledge of theoretical aspects of management but from the

Global Country Report we get knowledge of management field in different country &

their main sector. The aim of this report is to introduce the fundamentals and the basic

principles of business in different sector of particular country Japan.

The Global Country Report gives us knowledge regarding the sector which has much

opportunity for business for India and Gujarat. From this report we get the knowledge of

particular sectors rules, law, procedures, policies, and it is very useful to us in the

development of practical skill required of a manager and an aid to prospective

employment.

This saying has played guiding role in including in global country report of curriculum of

the MBA program of the Gujarat technological University this report and study real

business environment. We are thankful to Gujarat technological University for giving us

such a valuable opportunity.

This practice learning of MBA program develops of feeling about the difficulties

challenges in the business world, only theory knowledge does not import complete

education practical knowledge to all meaning to education to fulfill this objective of

practical learning of MBA program. In this direction we have tried our level best to

present a project report as a Global Country Report.

ACKNOWLEDGEMENT

The satisfaction and the happiness that accompanies the successful completion of only

task would be incomplete without expression of appreciation and gratitude to the people

who made it possible. Thought this acknowledgement we express our sincere gratitude

towards all those people who have helped us in the preparation of this project, which

has been a learning experience.

Indeed we consider it as a pleasant duty, though equally difficult to acknowledge the

motivating efforts of several people who have helped us in bringing this dissertation

report to find its delight.

We would like to thanks Gujarat technological university for giving us such a wonderful

opportunity for studying about other country and company this experience will be

beneficial for us in future also.

We would like to thank our HOD Prof. Amit Patel, we express our deep love and thanks

to almighty to Ms. Bhumika Raval (Assistant Professor) & Ms. Megha Bakhai (Assistant

Professor) and all the staff members who have guided us in undertaking this project

also thank other faculties of Chaudhari Technical Institute who helped us directly or

indirectly during our project.

EXECUTIVE SUMMARY

The research for “Global Country Report titled “Different Aspects Of Japan” is carried

out to study the future opportunity for the business development of Japan. Japan is an

island situated in East Asia and its capital is Tokyo. The currency of Japan is Yen. It is

also known as Nippon which means “the land of the rising sun”. The Japanese flag has

a red circle in the middle which symbolizes the red sun on a white background. Japan is

made up of four main islands and over 4,000 little ones.

This report shows the geographical, economy and finance, culture, land & climate, food,

language, clothing and various industries of Japan.

Demographic profile includes Population, Age Structure, Birth rate & Death Rate, Major

Cities Population, Sex Ratio, Infant Mortality Rate, Life Expectancy At Birth, Religions,

Languages, Regions, Household Pattern, Education Level.

The PES Analysis of Japan in this report provides the theory of the analysis of the

political, social and economical climate of Japan.

The different economic sectors of Japan is related to import export of Japan’s

agriculture, banking, manufacturing, health care, retail, etc. and includes unemployment

rate, growth rate and contribution.

The trade and commerce of Japan has third largest population over the globe, so the

consumer market at a large has the opportunity for trading and commerce. It also has

the opportunity to India for trading and commerce and relation of two country for export

and import.

This report also shows the study of the economic overview of Japan and business

overview of international trade level and the trade relation & business values of

Japanese Product with Gujarat also which shows the benefits and outline about the

difference of the culture in Japan and in India.

Table of Content

SR.

NO.

PARTICULAR PAGE

NO.

1 Introduction of Japan country 1

2 Demographic profile of Japan 4

3 PESTEL Analysis 19

4 Different Economic sector Of Japan 51

5 Overview of Industry, Trade & Commerce 64

6 Economic overview of Japan 78

7 Business overview of Japan & International trade level 95

8 Present trade relation & business volume of Japanese

product with Gujarat

99

9 Present trade relation & business volume of Japanese

product with India

113

List of Table

SR.

NO.

PARTICULAR PAGE

NO.

1 Population 5

2 Age structure 6

3 Birth rate & death rate 7

4 Major cities - population 8

5 Sex ratio 9

6 Infant mortality rate 10

7 Life expectancy at birth 11

8 Population of students 17

9 Age Structure 28

10 Median Age 28

11 Urbanization 28

12 Major cities population 28

13 Ethnic Groups 29

14 Religion 29

15 Literacy Rate 29

16 The Lunar Calendar in Japan 41

17 Introduction of Japan economy 51

18 Economic data in Japan 52

19 Unemployment rate 53

20 Agricultural Sector Contribution in Japan 54

21 Growth in Japan 55


23 Inflation rate in Japan 57

24 Banking sector growth in Japan 57

25 Manufacturing sector growth in Japan 59

26 Manufacturing sector GDP in Japan 59

21 Health care sector GDP in Japan 61

22 Health care sector growth in Japan 61

23 Retail sector in Japan 62

24 Japan import and export 72

25 List of the largest trading partners of Japan 76

26 Japan-India Trade 92

27 Japan trade with other countries (2011-12) (Million yen) 94

28 Japanese Companies in Gujarat 99

29 Name of company in Gujarat 100

30 Maruti Suzuki India Limited 109

31 Sales of Maruti Udyog Limited 112

32 Japan's Merchandise Trade with India( Percentage

Share)

123

33 Location wise business establishment of Japan in India 125

34 FDI Flows with Respect to Japan, China and India ( 1990-

2010)

129

List of Chart

Sr.

no.

Particular PAGE

No.

1 Population 5

2 Age structure 6

3 Birth rate & death rate 7

4 Major cities - population 8

5 Sex ratio 9

6 Infant mortality rate 10

7 Life expectancy at birth 11

8 Religions 12

9 Judicial System 21


11 Contribution in Japan 54

12 Growth in Japan 55


14 Inflation rate in Japan 57

15 Banking sector growth in Japan 58

16 Manufacturing sector growth in Japan 59

17 Manufacturing sector GDP in Japan 60

18 Health Care Sector GDP In Japan 61

19 Health care sector growth in Japan 62

20 Retail sector in Japan 63

21 Japan’s Economic Relationship 66

22 Japan’s trade in India 71

23 India’s trade in Japan 71

24 Japanese FDI in India 72

25 Share to Japanese total trade of China and of the US 93

26 Japan trade with other countries (2011-12) 94

27 State wise Japanese Business Establishment in India 113

28 Volume of world merchandise exports, 1990-2013 Indices, and

1990=100

114

29 Growth in volume of world merchandise trade and GDP, 2005-

13 (Annual % change)

117

30 Quarterly World exports of manufactured goods by product,

2008Q1-2011Q4 Year-on-year % change

124

31 Real GDP growth and trade of euro area economics, (2008-11)

Annualized % change over previous

126

32 FDI inflow and outflow 129

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1

INTRODUCTION OF JAPAN COUNTRY

Introduction

Japan is a country situated in Asia. It is also known as Nippon which means

“the land of the rising sun”. The Japanese flag has a red circle in the middle

which symbolizes the red sun on a white background. Japan is made up of

four main islands and over 4,000 little ones

Geography

� Full country name: Japan

� Population: 126,475,664 (World Fact book, 2011)

� Border countries: none

� Climate: Japan has four distinct seasons, with cold winters and hot

summers. The north-eastern island of Hokkaido is markedly cooler

with temperatures below zero for most of the winter. The southern

islands have a more tropical climate. June to September can be hot

and humid. It can snow in winter, but this is infrequent south of

Tokyo.

� Terrain: the geography of Japan is very distinctive, with steep hills

and mountains surrounding heavily populated plains. The country

is made up of a series of over 1,000 islands. The main islands

include Hokkaido, Honshu, Kyushu and Shikoko.

� Natural hazards: some active volcanoes, tsunamis, typhoons

(typhoon season is June - December). Japan's location at the

juncture of several tectonic plates means that approximately 20%

of the world's earthquakes take place in Japan. In March

2011, Japan's strongest-ever earthquake and subsequent tsunami

hit Honshu Island, causing damage to the Fukushima Daiichi

nuclear facility. The earthquake has had a damaging impact on the

country's economy and energy

2

Economy and finance

� Currency: yen (¥)

� Type of economy: capitalist, Western.

� Health of economy: Japan is the world's third largest economy;

however, huge government debt and the cost of repairing the damage

caused by the 2011 earthquake have caused a recession in the

country. Although Japan is slowly recovering, it is also feeling the

effects of weak demand for exports and a sharp downturn in business

investment. Economic recovery will depend partly on how the economy

deals with an ageing population and the attitudes of younger

generations, many of whom do not share the same work ethic as their

parents.

� Unemployment rate: 4.5% (Statistics Bureau of Japan, 2011).

� Main exports: cars, electronic devices and computers.

Culture

The Japanese culture has many influences from neighbouring continents such

as Europe and North America. The traditional culture comprises of many old

customs extravagant costumes and their cuisine. The Japanese culture is

made up of many traditions some of which are Tea ceremonies, Geishas,

Cherry Blossoms, Sumos, Japanese swords, Festivals etc.

Land and Climate

Most of Japan has a humid Monsoon climate with strong winds the weather

can get very hot during the summer months and very wet and cold during the

winter months it also snows it gets up to -9 degrees Celsius. Japan has four

distinct seasons.

Japan is made up of four large islands and 4,000 little ones. The names of the

four main islands are Honshu, Shikoku, Kyushu and Hokkaido. The largest is

Honshu this is where the capital Tokyo is situated. Japan is well known for its

highest mountain mount Fuji; infact 70% of japans landscape is mountainous.

3

Food

Japans food comprises of rice as a staple, seafood such as fish and Tofu.

Japanese food is very well known around the world because of its simplicity

and tastiness. Sushi is one of the most known dishes. It is Rice wrapped in

Seaweed with various fillings from cucumbers to teriyaki chicken. Some other

examples of Japanese food would be Miso Soup( Bean soup) , Ramen (

Noodles with various vegetables), Tempura ( fish and seafood deep-fried in a

tempura batter)

Language

Japanese is the sixth most spoken the language in world. More than 99% of

Japan speak Japanese the rest either speak English etc. Japanese is written

in characters like Chinese.

Clothing

Today a typical Japanese person wear what an average person every else in

the world would were. The traditional costume for Japan is a Kimono. It is only

worn on special occasions such as weddings graduation ceremonies and

festivals. Different Kimonos are worn on different occasions. On a funeral

Japanese people were black kimonos.

4

DEMOGRAPHIC PROFILE OF JAPAN

Demography is the learning of human residents dynamic. It encompasses the

learning of the size, structure and distribution of populations, and how

populations change over time due to births, deaths, migration, and aging.

Demographic analysis can relate to whole societies or to smaller groups

defined by criteria such as education, religion, or ethnicity.

Demography is the branch of sociology that studies the characteristics of

human populations. Demography is the statistical study of all populations.

Before proposing complex theories to explain sociological phenomena (e.g.,

World Systems Theory), especially at the macro and/or societal levels,

sociologists should first turn to demographic indicators for possible

explanations. Demographic analysis is a powerful tool that can explain a

number of sociological phenomena.

For instance, in examining the elements that led to the first World War, most

people turn to political and diplomatic conflicts but fail to consider the

implications of expanding populations in the European countries involved.

Expanding populations will result in increased competition for resources (i.e.,

food, land, access to trade routes and ports, etc.). Expanding populations may

not be the primary cause of World War I, but it may have played a role in the

increased hostilities leading up to the war.

In this fashion, demographic indicators are often informative in explaining

world events and should be turned to first as explanations.

� Demographic profile are includes:

1. Population,

2. Age Structure,

3. Birth rate & Death Rate

4. Major Cities Population

5. Sex Ratio

6. Infant Mortality Rate

7. Life Expectancy At Birth

8. Religions

9. Languages

10. Regions,

11. Household Pattern

12. Education Level

POPULATION

Some reports claim that Japan’s total population could fall by as much as 30%

to around 87 million by 2060 and the reasons, quite simply, point to a disparity

in the birth and death rates. In addition, it’s impossible to rule out the part that

the March 2011 Tsunami and Earthquake played. 19,000 people lost their

lives at the time, and it’s

on’ effect of reducing overall Life expectancy.

Year 2008

Population 127,433,500

5

Infant Mortality Rate

Life Expectancy At Birth

Household Pattern

Education Level


87 million by 2060 and the reasons, quite simply, point to a disparity



lives at the time, and it’s widely accepted that the incidents will have a ‘knock

on’ effect of reducing overall Life expectancy.

2009 2010 2011

127,433,500 127,078,700 126,804,400 126,475,700


87 million by 2060 and the reasons, quite simply, point to a disparity



widely accepted that the incidents will have a ‘knock-

2011 2012

126,475,700 127,960,000

6

AGE STRUCTURE

0-14 years- 13.5% (male 8,927,803/ female 8,268,937)

15-64 years- 62.6% (male 39,850,531/ female 39,909,944)

65 years and over- 23.9% (male 13,097,558/ female 17,313,315)

(2012 est.)

HTTPS://WWW.CIA.GOV/LIBRARY/PUBLICATIONS/THE-WORLD-FACTBOOK/GEOS/JA.HTML

8927803

3985053113097558

82689377

3990994417313315

13.50% 62.60% 23.90%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0-14 15-64 >65YEAR

AGE STRUCTURE

%

Female

Male

7

BIRTH RATE & DEATH RATE

Birth rate

8.39 births/1,000 population (2011 est.)

Death rate

9.15 deaths/1,000 population (July 2011 est.)

http://www.indexmundi.com/japan/demographics_profile.html

Interpretation

This entry gives the average annual number of deaths during a year per 1,000

populations at midyear; also known as crude death rate. The death rate, while

only a rough indicator of the mortality situation in a country, accurately

indicates the current mortality impact on population growth.

Birth date

48%Death Rate

52%

BIRTH RATE & DEATH RATE

MAJOR CITIES - POPULATION

TOKYO (capital) 36.507 million; Osaka

million; Fukuoka-Kitakyushu 2.809 million; Sapporo 2.673 million (2009)


INTERPRETATION

Tokya is a capital of japan. So people are living in the capital. Because there

are many facilities are there. In Tokyo isw a mega cities in the world. In the

lowest population in japan is Sapporo.

Tokyo

36.507

MAJOR CITIES

8

POPULATION

TOKYO (capital) 36.507 million; Osaka-Kobe 11.325 million; Nagoya 3.257

Kitakyushu 2.809 million; Sapporo 2.673 million (2009)


INTERPRETATION



japan is Sapporo.

osakanagoya

fukuokasapporo

11.325

3.2572.809

2.673

MAJOR CITIES-POPULATION

Kobe 11.325 million; Nagoya 3.257

Kitakyushu 2.809 million; Sapporo 2.673 million (2009)



9

SEX RATIO

Birth: 1.06 male/female

under 15 years: 1.08 male/female

15-64 years: 1 male/female

65 years and over: 0.76 male/female

total population: 0.94 male/female (2011 est.)


Interpretation

This entry includes the number of males for each female in five age groups -

at birth, under 15 years, 15-64 years,65 years and over, and for the total

population.

at birth

27%

<15 years

28%

15-64

26%

>65

19%

Sex Ratio

10

INFANT MORTALITY RATE

Total: 2.21 deaths/1,000 live births

male: 2.44 deaths/1,000 live births

female: 1.97 deaths/1,000 live births (2011 est.)


Interpretation

This entry gives the number of deaths of infants under one year old in a given

year per 1,000 live births in the same year; included is the total death rate,

and deaths by sex, male and female . This rate is often used as an indicator of

the level of health in a country.

male

55%

female

45%

INFANT MORTALITY RATE

11

LIFE EXPECTANCY AT BIRTH

Total population: 83.91 years

male: 80.57 years

female: 87.43 years (2011 est.)


Interpretation

This entry contains the average number of years to be lived by group of

people born in the same year, if mortality at each age remains constant in the

future. The entry includes total population as well as the male and female

components.

male

48%female

52%

LIFE EXPECTANCY BIRTH

12

RELIGIONS


Interpretation

Total adherents exceeds 100% because many people belong to both

Shintoism and Buddhism (2005)

This entry is an ordered listing of religions by adherents starting with the

largest group and sometimes includes the percent of total population.

Shintoism, 83.9

0% Buddhism, 71.4

0%

Cristianity, 2%Other, 7.80%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

Shintoism Buddhism Cristianity Other

RELIGIAN

13

LANGUAGES

Japanese, Chinese, Korean, English.

REGIONS

The regions of Japan at a glance are as follows:

Regions of Japan

HOKKAIDO

This island is the second largest of Japan's main islands. The climate is cooler

in summer and very cold in winter. Fishing and forestry are the main

occupations of Hokkaido region. Sapporo, the capital city is famous for the

Snow Festival.

14

TOHUKU

This mountainous region occupies all of northeast region. The region has

short summers and long winters. The area is primarily agriculture based.

KANTO

This region lies in the southeast part of Honshu. The climate is generally

mild. The Tokyo-Yokohama district forms the economic hub of the region and

agricultural work is on the decline.

CHUBU

The region is located in central Honshu. The climatic conditions vary greatly

according to the area. This area has some of the longest rivers of Japan. It

also has 3 industrial areas.

KINKI

This region is located in west central Honshu and is the second most

important industrial area.

CHUGOKU

This region encompasses the western tip of Honshu. The climate is

dehydrated and warm.

SHIKOKU

This is the smallest island of Japan and there is little large scale industry. The

climate is subtropical.

KYUSHU

This is the southernmost of the major islands. The climate is subtropical and

because of the warm climatic conditions, marine sports are very popular. The

Kita Kyushu Industrial Zone has many heavy industries.

15

HOUSEHOLD PATTERNS

AGRICULTURAL AGE FAMILY/HOUSEHOLD PATTERNS

Extended family: several generations living and working together on the land.

INDUSTRIAL AGE FAMILY/HOUSEHOLD PATTERNS

Nuclear family: father working, mother at home not working, and

approximately two children--for middle and upper classes in developed West.

Also nuclear family in lower class West and socialist countries--except that

women worked.

INFORMATION AGE FAMILY/HOUSEHOLD PATTERNS:

Multiple family patterns: no one model everyone must follow to be socially

accepted. Examples include: married couples with or without children;

unmarried couples living together; single parents; divorced parents with

children who remarry, making children part of different households; single-

person households; people living in groups; gay and lesbian couples; etc.

INFORMATION/DATA ON JAPANESE FAMILY/HOUSEHOLD

PATTERNS

Japan has had a history of stressing it the importance of the "continuing family

before the individual. It was expected that the eldest son inherit the position of

head of the house. Continuity was of paramount importance and other

arrangements, such as adoption, would be made if no sons had been borne.

The rest of the children were expected to leave on marriage, girls to other

hawses, younger sons either to set up branch houses or to a house with no

son as an adopted head. It was important that a `bride or an adopted son fit

into the existing ie, because if they failed to do so, they but things have been

modified significantly. The absolute authority of the head of the house is over,

and since children now choose their future occupations freely, less is made of

an eldest son as the potential successor. Women are still the prime

16

caretakers, and much of the time give up their careers to take on childrearing

as a fulltime job. However more Japanese women now have a career and a

family. The Japanese word for child-rearing is shitsuke, a word also used for

tacking a kimono into shape and teasing rice seedlings into an upright

position. Childrearing is considered by the Japanese to be extremely

important.

EDUCATION LEVEL

The schooling years in the Japanese education system are segmented along

the lines of 6-3-3-4: 6 years of primary or elementary school; 3 years of

middle or junior high school; 3 years of high school; and 4 years of university.

However, the government has just announced (October 2005, Daily Yomiuri)

that it is intending to make changes in the Education Law to allow schools to

merge the 6-3 division between elementary and middle schools.

Many private schools, however, offer a six year programmed incorporating

both junior high school and high school. There are two options for tertiary

education: junior college (two years) and university (four years).

A school year has three terms: summer, winter and spring, which are each

followed by a vacation period. The school year begins in April and ends in

March of the following year.

� An elementary school (from 6 years) and junior high school (3 years)

education, i.e. nine years of schooling are considered compulsory (see

pages on legality of homeschooling).

� This system, implemented by the School Education Law enacted in March

1947 after WWII, owes its origin to the American model 6-3-3 plus 4 years

of university. Many other features of the Japanese educational system, are

however, based on European models.

17

� The Japanese school year begins in April and students attend school for

three terms except for brief spring and winter breaks and a one month long

summer holiday.

� SOME STATISTICS

Japan has 23,633 elementary schools, 11,134 junior high schools, 5,450

senior high schools, 995 schools for the handicapped, 702 universities,

525 junior colleges, and 14,174 kindergartens (May 2003 figures).

� Enrolment of the population of students may be broken up into:

TYPES OF SCHOOL POPULATION OF

STUDENTS

Kindergartens 1,760,442

Elementary School 7,226,911

Junior High School 3,748,319

Senior High School 3,809,801

Junior Colleges(usually

two years)

250,065

universities (four years)

and graduate schools

2,803,901

technical colleges 57,875

special training schools 786,135

other types of schools 189,570

18

EDUCATIONAL REFORM & OTHER CURRENT ISSUES

More than 90% of all students graduate from high school and 40% from

university or junior college. 100 % of all students complete elementary school

and Japan is repeatedly said to have achieved 100% literacy and to have the

highest literacy rate in the world since the Edo period.

Each academic year begins in April and comprises of two semesters. Basic

general degrees are four-year degrees, a feature adapted from the American

system. The general degree may be followed by two-year Master's degrees

and then a three year Doctorate (largely based on research) where these are

offered.

19

PESTAL ANALYSIS

POLITICAL CULTURE OF JAPAN

Introduction

• The Japanese government, a constitutional monarchy, is based on a

parliamentary cabinet system. Executive power is vested in the

cabinet, which consists of the prime minister and not more than 17

ministers of state that collectively are responsible to the Diet. The

prime minister, who must be a member of the Diet, is designated by the

Diet. In practice, the prime minister is always a member of the House

of Representatives. The prime minister has the power to appoint and

dismiss the ministers of state, all of whom must be civilians and a

majority of whom must be members of the

Diet. Japan's constitution became effective on May 3, 1947, and

consists of 103 articles.

• Unlike the American political system and the British political system

which essentially have existed in their current form for centuries, the

present Japanese political system is a much more recent construct

dating from Japan's defeat in the Second World War and its

subsequent occupation by the United States. The post-war constitution

of 1947 is an anti-militarist document which includes the renunciation of

the right to wage war and prohibits the maintenance of armed forces

although later a limited self-defence force was permitted.

System of government

• Japan is a democratic, constitutional monarchy with a parliamentary

government headed by a Prime Minister. Japan maintains an Imperial

Family, headed by the Emperor, currently Emperor Akihito. Universal

suffrage is limited to citizens of Japan aged 20 years or older; voting is

voluntary and actual voting rates vary widely.

20

• Executive power is vested in the Cabinet which is comprised of the

Prime Minister and ministers of state. There is a House of

Representatives (also known as the Lower House) and a House of

Councilors (also known as the Upper House). The Prime Minister is

selected from among members of parliament by a vote by both houses

of the Diet (parliament). The Prime Minister submits bills to the Diet,

reports to the Diet on domestic and foreign issues, and supervises and

controls administration.

• The Japanese Constitution specifies that the majority of Cabinet

members must be elected members of parliament. However, the

Prime Minister can appoint non-politicians to the Cabinet and as

Special Ministers of State. There is no term limit for prime ministers

although individual parties often have term limits in place under party

rules.

Government structure

• Japan's governmental structure has three tiers: national, prefectural

and local. There are 47 prefectures and 1788 local

municipalities. Each tier is governed by elected assemblies. Japan

does not have a federal system and the two lower tiers of government

remain to a large extent fiscally dependent on the national

government. At the lower prefectural and local levels of government,

voters regularly vote in governments of different political

leanings. Many local municipalities have merged in recent years

primarily in pursuit of improved governance and greater economic

efficiency.

Political parties

• The post-war history of political parties in Japan shows frequent splits

and mergers. The Democratic Party of Japan (DPJ) took office

following the August 2009 election after more than fifty years of almost

unbroken rule by the LDP. The DPJ was formed in 1998 through the

21

merger of a number of smaller opposition parties, and strengthened by

a further merger with the Liberal Party in 2003.

• There are 95 female Diet Members, who account for around 13 per

cent of all Diet Members.

• In the Lower House, or House of Representatives, there are 480

seats. The chart below indicates the relative strengths of the political

parties in the Lower House. The electoral term for the Lower House is

four years, although political conditions frequently see the House

dissolved earlier.

22

Japan's Economy

Before Japan's 2011 earthquake and nuclear power plant disaster, its

economy was emerging from the deepest recession since the 1970s. It

rebounded strongly in 2010, when GDP increased by a strong 3% -- the

fastest growth in 20 years. It fell off briefly during the last quarter of 2010, but

was expected to pick up again with stronger exports to fast-growing neighbors

in Asia.

However, Japan lost much of its electricity generation when it shut down

nearly all its nuclear power plants after the earthquake. The economy shrank

.5% in 2011 as manufacturing slowed due to the crisis.

If that weren't bad enough, Japan's economy is still challenged by rising

commodity prices -- the country imports most of its food and oil -- and a

shrinking labor pool, as its population ages. Japan is also challenged by

a debt-to-GDP ratio of more than 200%. Like the U.S, much of Japan's debt

resulted from efforts to stimulate its economy out of a 20-year deflationary

period and recession.

Japan's recession became official in Q4 2008 when GDP growth plummeted

12.9% from a year earlier, the worst decline since the 1974 recession. Japan's

economic collapse was a shock, since Q3 growth was only down .1%,

following a decline of 2.4% inQ2 2008. The severe downturn was a result of

slumping exports in consumer electronics and auto sales, 16% of Japan's

economy and a driving force behinds the country's economic revival from

2002-2008.

Japan's economy had only recently recovered from the deflation that hobbled

it in the 1990s. Japan's economy was up 2.1% in 2007, and 3.2% in Q1 2008,

leading many to believe it had finally grown out of its decade-long recession.

23

Japan Economy overview

In the years following World War II, government-industry cooperation, a strong

work ethic, mastery of high technology, and a comparatively small defense

allocation (1% of GDP) helped Japan develop a technologically advanced

economy. Two notable characteristics of the post-war economy were the

close interlocking structures of manufacturers, suppliers, and distributors,

known as keiretsu, and the guarantee of lifetime employment for a substantial

portion of the urban labor force. Both features are now eroding under the dual

pressures of global competition and domestic demographic change. Japan's

industrial sector is heavily dependent on imported raw materials and fuels. A

small agricultural sector is very much subsidized and protected, with crop

yields among the highest in the world. Usually self sufficient in rice, Japan

imports about 60% of its food on a caloric basis. Japan maintains one of the

world's largest fishing fleets and accounts for almost 15% of the global catch.

For three decades, overall actual economic development had been

spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a

4% average in the 1980s. Growth slowed markedly in the 1990s, averaging

just 1.7%, largely because of the after effects of inefficient investment and an

asset price bubble in the late 1980s that required a protracted period of time

for firms to reduce excess debt, capital, and labor. Measured on purchasing

power parity (PPP) basis that adjusts for price differences, Japan in 2011

stood as the third-largest economy in the world after China, which surpassed

Japan in 2001. A sharp downturn in business investment and global demand

for Japan's exports in late 2008 pushed Japan further into recession.

Government stimulus spending helped the economy recover in late 2009 and

2010, but the economy contracted again in 2011 as the massive 9.0

magnitude earthquake in March disrupted manufacturing. Electricity supplies

remain tight because Japan has temporarily shut down most of its nuclear

power plants after the Fukushima Daiichi nuclear reactors were crippled by

the earthquake and resulting tsunami. Estimates of the direct costs of the

damage - rebuilding homes, factories, and infrastructure - range from $235

billion to $310 billion, and GDP declined almost 1% in 2011. Prime Minister

Yoshihiko NODA has proposed opening the agricultural and services sectors

24

to greater foreign competition and boosting exports through membership in

the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade

agreements with the EU and others, but debate continues on restructuring the

economy and reining in Japan's huge government debt, which exceeds 200%

of GDP. Persistent deflation, reliance on exports to drive growth, and an aging

and shrinking population are other major long-term challenges for the

economy.

Why Japan's Economy is Important to the India

India is close to replacing Japan as the world’s third largest ecnomy,

possibly as early as this year, says a senior economist at India credit rating

agency Crisil. Sunil Sinha, the firm’s main macroeconomist, based the

projections on India’s purchasing power parity, saying that tsunami-wracked

Japan will see a decline in GDP this year, while India’s economy will expand

as will the purchasing power of its currency, the rupee.

India is the fourth-largest economy in the globe, trailing the U.S., China and

Japan. GDP figures from 2010 show that the Japanese economy was worth

$4.31 trillion, with India at $4.06 trillion. Not far behind. The earthquake and

tsunami in March nearly shut Japan down for a month and now Japan’s

economy is expected to post no growth at all this year, at best, while India’s

economy will grow between 7% and 8% in 2011.

The International Monetary Fund’s growth forecast for India and Japan show

both country’s GDP levels about the same in constant dollar terms, but the

disaster in Japan has taken its toll on the nation’s growth. “Were it not for the

earthquake and tsunami, India would have overtaken Japan in around 2013-

14,” said Sinha.

25

Economy: The Japanese economy is one of the third largest in the world.

Only the USA and China have a higher GNP. The Japanese currency is

the Yen.

Exports: Japan's main export goods are cars, electronic devices and

computers. Most important trade partners are China and the USA, followed by

South Korea, Taiwan, Hong Kong, Singapore, Thailand and Germany.

Imports: Japan has a surplus in its export/import balance. The most

significant import goods are raw materials like oil, foodstuffs and wood. Major

supplier is China, followed by the USA, Australia, Saudia Arabia, South

Korea, Indonesia and the United Arab Emirates.

Industries: Manufacturing, construction, distribution, real estate, services,

and communication are Japan's major industries today. Agriculture makes up

only about two percent of the GNP. Most vital agricultural product is rice.

Resources of raw materials are very limited and the mining industry rather

small.

Banks: Banks in Japan operate similarly to banks in other countries. There

are a variety of institutions, ranging from large international banks to smaller

regional ones. The large domestic banks include Japan Postal Bank, Mizuho,

Tokyo-Mitsubishi UFJ, Sumitomo, Resona, Citibank and Shinsei Bank.

Furthermore, several online banks, most notably Seven Bank, have recently

gained popularity and offer their customers banking via the internet and a

network of ATMs.

Living cost: Living costs in Japan and especially in Tokyo are famous to be

among the worlds highest. However, if you live outside of central Tokyo,

adjust to a Japanese lifestyle and do not depend too heavily on food and

products from your home country, you may be surprised how inexpensive

Japan can be.

Housing: Some of the world's most expensive land can be found in

central Tokyo. Consequently, even tiny apartments in the city center are very

26

expensive. However, housing costs are distinctly lower in Tokyo's suburbs,

surrounding prefectures and in other regions and cities of Japan. Additional

commuting costs are repeatedly more than rewarded by the savings on the

rental fee, specially as many Japanese companies pay part or all of their

employees' commuting expenses.

Utilities such as gas, water and especially electricity are expensive,

and phone rates are high. For international calls, consider internet phones,

callback services and other offers for the expat community.

SOCIAL CULTURE OF JAPAN

• Japan is an island country in East Asia, situated in the Pacific Ocean, it

lies to the east of the Sea of Japan, China, North Korea, South Korea

and Russia, stretching from the Sea of Okhotsk in the north to the East

China Sea and Taiwan in the south. The characters that make up

Japan's name mean "sun-origin", which is why Japan is at times

referred as the "Land of the Rising Sun".

• Japan is an archipelago of 6,852 islands. The four largest islands are

Honshu, Hokkaido, Kyushu, and Shikoku, which together comprise

about ninety-seven percent of Japan's land area. Japan has the world's

tenth-largest population, with over 127 million people. Honshu’s

Greater Tokyo Area, which includes the de facto capital city of Tokyo

and several nearby prefectures, is the largest urban area in the world,

with over 30 million residents.

• Archaeological study indicates that people lived in Japan as early as

the Upper Paleolithic period. The first written mention of Japan is in

Chinese history texts from the 1st century AD. Influence from other

nations followed by long periods of isolation has characterized Japan's

record. From the 12th century until 1868, Japan was ruled by

successive feudal military dictatorship in the name of the Emperor.

Japan entered into a long period of isolation in the early 17th century,

which was only ended in 1853 when a United States fleet pressured

Japan to open to the West. Nearly two decades of internal conflict and

27

insurrection followed before the Meiji Emperor was restored as head of

state in 1868 and the Empire of Japan was proclaimed, with the

Emperor as a divine symbol of the nation. In 19th and early 20th

centuries, victory in the First Sino-Japanese War, the Russo-Japanese

War and World War I permitted Japan to enlarge its empire during a

period of increasing militarism. The Second Sino-Japanese War of

1937 expanded into part of World War II in 1941, which came to an end

in 1945 following the atomic bombings of Hiroshima and Nagasaki.

Since adopting its revised constitution in 1947, Japan has maintained a

unitary constitutional kingdom with an emperor and an elected

legislature called the Diet.

• A major economic power of Japan has the world's third-largest

economy by nominal GDP and by purchasing power parity. It is also

the world's fourth-largest exporter and fourth-largest importer. Even

though Japan has officially renounced its right to declare war, it

maintains a up to date military with the sixth largest military budget

used for self-defense and peacekeeping roles. After Singapore, Japan

has the lowest homicide rate (including attempted homicide) in the

world. According to Japan's health ministry, Japanese women have the

second highest life expectancy of any country in the world According to

the United Nations, Japan also has the third lowest infant mortality rate.

� Social Analysis

• Demographics

The demographic features of the population of Japan include population

density, ethnicity and education level, health of the population, economic

status, religious affiliations and other aspects of the population.

28

• Population- 126,475,664 (July 2011 EST.)

• Age Structure

0-14 years 13.1% (male 8,521,571/female 8,076,173)

15-64 years 64%(male40,815,840/female40, 128,235)

65 years and over 22.9%(male12,275,829/female16,

658,016) (2011 EST.)

• Median Age

Total 44.8 years

Male 43.2 years

Female 46.7 years (2011 EST.)

Population Growth 0.278% (2011 EST.)

• Urbanization

Urban population 67% of total population (2010)

Rate of urbanization 0.2% annual rate of change (2010- 15

EST.)

• Major Cities – Population

TOKYO (capital) 36.507 million

Osaka Kobe 11.325 million

Nagoya 3.257 million

Fukuoka Kitakyushu 2.809 million

Sapporo 2.673 million

29

• Ethnic Groups

Japanese 98.5%

Koreans 0.5%

Chinese 0.4%

Other 0.6%

• Religions

Shintoism 83.9%

Buddhism 71.4%

Christianity 2%

Other 7.8%

• Literacy Rate

Definition age 15 and over can read and

write

Total population 99%

Male 99%

Female 99% (3.5% of GDP is spent on

education)

30

JAPANESE CULTURE – OCCUPATIONS

Geisha are famous female traditional entertainers,

who sing, dance, play traditional Japanese musical

instruments and engage their clients with

interesting conversation. Today there are still some

active Geisha in places such

as Kyoto and Kanazawa.

Samurai were a traditional warrior class in pre-

industrial Japan, who were easily recognised as

they were the only men allowed to carry two

swords. Samurai were committed to a single

daimyo (normally a wealthy leader).

JAPANESE CULTURE – FASHION

Japanese fashion isn't just a set of modern fashion

trends and sub cultures. Japanese fashion includes

many traditional forms of clothing including

the kimonoand its associated accessories.

The Kimono is the most famous form of traditional

Japanese clothing for women. The Kimono is actually

a style with many different forms; from the casual to

the wedding style, all which have a particular meaning

and are wore to different events or occasions.

31

JAPANESE CULTURE – MUSIC

Japanese Music is a major part of Japanese culture

which spans from the traditional Japanese music and

instruments to modern Japanese music including J-

POP and Japanese Rock Music.

The Koto is one of the most refined and sophisticated

of the traditional Japanese musical instruments. To the

western ear the Koto would sound similar to a harp.

What is equally amazing about the Koto, is seeing it

carried by petite Japanese woman.

JAPANESE CULTURE – FESTIVALS

Bon-Odori Festival is a traditional Japanese summer

festival featuring Japanese drum music, dancing and

special summer food.

JAPANESE CULTURE – CEREMONIES

The Japanese Tea Ceremony is a highly developed

art form, with several different schools or styles

of Japanese Tea Ceremony in existence.

The Japanese Tea Ceremony is a very formal event in

which many exacting steps are followed.

Traditional Japanese weddings ceremonies are

normally based on the Japanese Shinto religion

ceremony.Traditional Japanese weddings are major

occasion with the wearing of traditional Japanese

clothing including the bride in the wedding kimono.

32

Shichi-Go-San Festival is a traditional Japanese

festival where parents celebrate on the fifteenth of

November their children growing up as they turn three,

five and seven years of age.

Japanese New Year is celebrated at same time of the

year as western countries, but is celebrated in a

distinctive style. Japanese New Year is an important

family time of the year and there are many traditions

involved.

33

Technology of Japan

� Electronics

Japan is well known for its automotive and electronics industries

throughout the world, and Japanese electronic products account for a

large share in the world market, compared to a majority of other countries.

Japan has large international corporate conglomerates such as Fuji (which

developed the nation's first electronic computer, FUJIC, in 1956) and

Sony. Sony, Panasonic, Canon, Nikon, Fujitsu, Hitachi, Sharp, NEC,

Epson and Toshiba are among the best-known electronics companies in

the world. Toyota, Honda, Nissan, Mazda, Mitsubishi, Nintendo and

Subaru are too extremely well known companies in the world.

� Aeronautics

Japan has also complete evolution into aerospace study and space

exploration. The Japan Aerospace Exploration Agency (JAXA) conducts

space and planetary study, aviation examine, and expansion of rockets

and satellites. It has developed a sequence of rockets, the newest and the

majority powerful of which is H-IIB. H-IIA/B rockets which have the

capability of carrying 8-ton payload to the GTO at maximum are now

administered by the private-own company Mitsubishi Heavy Industry.

� Development of Battery-Free Display RFID Device by

Toppan :

� Toppan Printing has successfully developed a battery-free display

RFID device capable of displaying text and images. The new 2.7 inch

dot-matrix electronic paper display is capable of

contents without the use of battery power.

� Furthermore, since electronic paper is used for the display part,

information displayed remains on the screen without any needs for a

battery. The method of communication is compliant with ISO

15693, which is widely used in the field of RFID. Sample shipment is

from 5000 JPY per unit.

� Robotics Technology

�� Robots can be divided into three main categories:

� Industrial Robots

These robots are dedicated to performing repetitive manufacturing

that are often unsafe or unpleasant for human workers. They are

designed to repeat the same process over and over without change.

Modern industrial robots can easily be programmed to perform new

applications.

� Research / Service Robots

These robots are designed to assist in exploring and gathering data. They

are often used in space applications, surgeries, and household chores.

They are designed to not only interact with the environment, but react

appropriately, thus coining the term "artifici

34

matrix electronic paper display is capable of changing its display

contents without the use of battery power.

Furthermore, since electronic paper is used for the display part,


battery. The method of communication is compliant with ISO


from 5000 JPY per unit.

Robotics Technology

Robots can be divided into three main categories:

Industrial Robots

These robots are dedicated to performing repetitive manufacturing




Research / Service Robots

robots are designed to assist in exploring and gathering data. They



appropriately, thus coining the term "artificial intelligence."

changing its display

Furthermore, since electronic paper is used for the display part,


battery. The method of communication is compliant with ISO/IEC


These robots are dedicated to performing repetitive manufacturing tasks




robots are designed to assist in exploring and gathering data. They



� Educational Robots

These robots are occasionally considered plaything or kits and are planned to

offer an educational experience. Educational robots are used in competitions

and for learning experience. They often have the ability t

behavior.

� Latest Japan Technology

Technologists from Japan’s National Institute of Advanced Industrial Science

and Technology has recently form a 5

like the middling Japanese woman between the a

middling Japanese woman this HRP

for walking and moving arms and it has 8 facial motors inside for blinking,

smiling & expressing emotions.

�� Carbon Fibers to Trim Vehicle Weigh

� Cutting a car's weight is one of the best ways to boost fuel economy.

And one way to reduce weight is to replace some of the steel in a car's

body with a material called carbon f

� Carbon fiber is too expensive for widespread use

times as much as steel by weight. That's why its use has been limited

to luxury vehicles such as the Audi R8 and racing cars, along with

some airplanes and golf clubs.

35

Educational Robots



and for learning experience. They often have the ability to simulate learned

Latest Japan Technology


and Technology has recently form a 5-foot, dark haired robot in order to look

like the middling Japanese woman between the ages of 19 to 29. But unlike

middling Japanese woman this HRP-4C robot contained 30 motors inside it


smiling & expressing emotions.

Carbon Fibers to Trim Vehicle Weigh

car's weight is one of the best ways to boost fuel economy.


body with a material called carbon f

Carbon fiber is too expensive for widespread use—it costs at least four

as steel by weight. That's why its use has been limited


some airplanes and golf clubs.



o simulate learned


foot, dark haired robot in order to look

ges of 19 to 29. But unlike

4C robot contained 30 motors inside it


car's weight is one of the best ways to boost fuel economy.


it costs at least four

as steel by weight. That's why its use has been limited


36

� Now, researchers hope to make automotive-grade carbon fiber using a

process similar to how knitting yarn is created. The development could

lower the price of carbon fiber by as much as 25%.

� These tiny filaments are wound into strands that are subsequently

turned into a fabric. The fabric is then combined with a glue-like

chemical and hardened into the final shape of a car part, such as a

hood or trunk lid.

� High-Tech Agriculture in Japan

�� The Japanese have taken a high tech approach to agriculture as they

have with everything else. “They are ahead in biotechnology; they grow

their rice with an amazing variety of mini-machines, including

mechanical rice transplanters and harvesters, helicopter spraying, vinyl

sheeting, concrete banked paddies and massive use of chemical

fertilizer.”

�� The Japanese have produced a tomato plant that bears 10,000

tomatoes with the aid of a rotating-lens system that filters out harmful

sun rays and focused beneficial rays where they are needed most. One

tomato plant at the Tsukuba Science Expo in Japan produced 16,897

individual tomatoes.

�� The modernization of rice paddy agriculture includes consolidating

small fields into large ones, replacing open canals with underground

drainage pipes, installing pumps to pump in water and periodic draining

of the paddies. These changes have made the paddies easier for

farmers to work.

37

• Environment of Japan

� Business Environment

�� Organizational structure

� Strict & hierarchical

� Interdependence

� Participative management

� Long-term planning

� Vertical society

� Private decision making

� Corporate Structure

Japanese management system plays a big role in the nation’s powerful

integrated national system. Japanese management is known for lifetime

employment, seniority-based wages and promotions, consensus decision-

making, and enterprise unions. These factors are important for Japan’s

integrated national system and make the system what it is today.

38

�� Organizational Structure

39

� The Cultural Environment

� The Elements of Culture:

� Material culture: Material culture refers to tools, artifacts and

technology. Before marketing in a foreign culture it is important to

assess the material culture like transportation, power, and

communications and so on.

� Language : Language reflects the nature and values of society. There

may be many sub-cultural languages like dialects which may have to

be accounted for. Some countries have two or three languages.

� Aesthetics : Aesthetics refer to the ideas in a culture concerning

beauty and good taste as expressed in the arts -music, art, drama and

dancing and the particular appreciation of colors and form. African

music is different in form to Western music. Aesthetic differences affect

design, colors, packaging, brand names and media messages.

� Education: Education refers to the transmission of skills, ideas and

attitudes as well as training in particular disciplines. Education can

transmit cultural ideas or be used for change, for example the local

university can build up an economy's performance.

� Religion: Religion provides the best insight into a society's behavior

and helps answer the question why people behave rather than how

they behave.

� Attitudes and values: Values often have a religious foundation, and

attitudes relate to economic activities. It is essential to ascertain

attitudes towards marketing activities which lead to wealth or material

gain, for example, in Buddhist society these may not be relevant.

� Social organization: Refers to the way people relate to each other, for

example, extended families, units, kinship. In some countries kinship

may be a tribe and so segmentation may have to be based on this.

Other forms of groups may be religious or political, age, caste and so

on. All these groups may affect the marketer in his planning.

40

� Weather of Japan

�� In the winter months (December to February), cold, dry air-masses

from Siberia move down over Japan, where they meet warmer, moister

air-masses from the Pacific. The resulting precipitation causes huge

snowfalls on the side of the country that faces the Sea of Japan.

�� The Pacific Ocean side of Japan receives less snow but can still be

quite cold, while the big cities of Honshū like Tokyo, Osaka, Nagoya

and Kyoto have winters with highs in the single digits or even low teens

and lows a few degrees above zero (Celsius). The odd January or

February day will be colder, but these cold snaps usually don’t last.

�� The summer months (June to August) are dominated by warm, moist

air currents from the Pacific, and produce high temperatures and

humidity throughout most of Japan (with the blissful exception of

Hokkaidō). In the early part of summer, usually mid-May to June, there

is a rainy season lasting a few weeks that starts in the south and

gradually works its way northward.

�� Although it can be inconvenient, this rainy season is not usually a

significant barrier to travel. August, September and October is typhoon

season, which can make travel in Okinawa, the Izu-shotō and

Ogasawara-shotō difficult.

�� In contrast to the extremes of summer and winter, spring (March to

May) and autumn (September to November) in Japan are

comparatively mild. Rainfall is relatively low and the days are often

clear.

41

�� The Lunar Calendar in Japan

(Table-1)

Explanation: Japanese Names For Months

ENGLISH MODERN

JAPANESE

NAME

OLD NAME OLD NAME'S

MEANING

January IchiGatsu MuTsuki Harmony, Happy Spring

February NiGatsu KisaRagi Seasonal Change of Dress

March SanGatsu YaYohi Grass Grows Dense

April ShiGatsu UTzuki Summer, Plant Rice

May GoGatsu SaTsuki Rice Sprouts

June RokuGatsu MiNaTzuki Watering Month

(put water in the field)

July ShichiGatsu FuTzuki Month of Letters

August HachiGatsu HaTzuki Month of Leaves

September KuGatsu NagaTsuki Autumn Long Month

October JuuGatsu KaNaTzuki Month of Gods*

November JuuIchiGatsu ShimoTsuki Month of Falling Frost

December JuuNiGatsu ShiHasu "Poor Looking" Winter

� Environmental issues and pollution in Japan

�� Types of Pollution in Japan

� Dioxin

Because of the limited land area in Japan, securing space to dispose of

trash is a perennial issue. Japan has resorted to burning trash as a matter

of necessity. The term “dioxin” refers to the compound tetrachlorodi

benzo-p-dioxin, which has a propensity to accumulate in the body and to

cause cancer and birth defects.

42

� Vehicle Emissions

As a result of the imposition of various rules and regulations, considerable

progress has been made in limiting air pollution from factory smokestacks,

but in Japan’s major cities air pollution from the nitrogen oxides and

particulate matter emitted by motor vehicles continues to cause health

problems. The majority of the particulate matter and approximately 80

percent of the nitrogen oxides emitted by motor vehicles comes from

diesel engines.

� High-Tech Pollution in Japan

Another issue in Japan is environmental pollution that is caused by high-

tech pollution created by cutting-edge industries, such as integrated circuit

production. Ground water pollution is caused by solvents.

� Pollution caused by natural disasters

The Great East Japan Earthquake and the accompanying tsunami in

March 2011 damaged at least 270,000 buildings. The rubble and debris

left behind, including ruined boats, cars, etc., plus those washed up on the

shore, were in excess of 24 million tons. The national government took

prompt measures to collect and dispose of this waste on behalf of the

affected towns and villages, and covered the costs of the clean up by local

governments.

� Air Pollution Reduction in Japan

Air pollution in Japanese cities decreased markedly between 1967 and

1985. Laws passed in 1970 helped reduce the levels of sulphur dioxide

emissions by 78 percent in 10 years.

43

• The Japanese Judicial System

� overview

There are five types of courts in Japan: the Supreme Court, High Courts,

District Courts, Family Courts and Summary Courts.

Sources : http://www.courts.go.jp/english/system/system/index.html

1) Companies Act (Act No. 86 of July 26, 2005)

�� General Provisions

� Purpose

The formation, organization, operation and management of companies shall

be governed by the provisions of this Act, except as otherwise provided by

other acts.

A Company shall be a juridical person.

�� Trade Name of the company

The name of a Company shall be its trade name.

A Company shall use in its trade name the words "Kabushiki-Kaisha,"

"Gomei-Kaisha," "Goushi-Kaisha" or "Goudou-Kaisha" respectively for

44

Stock Company, General Partnership Company, Limited Partnership

Company or Limited Liability Company.

�� Employees of a Company

� Section 1 Employees of a Company

� Manager

A Company may appoint manager(s) and have him/her carry out its

business at its head office or branch office.

� Manager's Authority of Representation

A manager shall have authority to do any and all judicial and nonjudicial

acts on behalf of a Company in connection with its business.

A manager may elect or dismiss other employee(s).

�� Incorporation

o Section 2 Preparation of Articles of Incorporation

In order to incorporate a Stock Company, incorporator shall prepare articles of

incorporation, and all incorporators shall sign or affix the name and seal to it.

Articles of incorporation of a Stock Company shall specify or record the

following matters:

• Purpose

• Trade name

• Location of the head office

• Value of property to be contributed at the incorporation or the lower

limit thereof

• Name and address of the incorporator

� Section 7 Formation of Stock Companies

A Stock Company shall be formed by the registration of the incorporation at

the location of its head office.

�� Share

� Section 1 General Provisions

• Shareholders' Liabilities

45

A shareholder's liability shall be limited to the amount of the subscription price

of the shares he/she holds.

• Total Number of Authorized Shares

A Stock Company may not abolish the provisions on the Total Number of

Authorized Shares by amending its articles of incorporation.

2) Civil Code (Act No. 89 of 1896)

�� General provision

� Common Provisions

This Code must be construed in accordance with honoring the dignity of

Individuals and the essential equality of both sexes.

� Section I Capacity to Hold Rights

The enjoyment of private rights shall commence at birth.Unless otherwise

provided by applicable laws, regulations or treaties, foreign nationals shall

enjoy private rights.

� Section II Capacity to Act

• Age of Majority

The age of majority is reached when a person has reached the age of 20.

• Permission for Minors to Carry on Business

A minor who is permitted to carry on one or more kinds of business shall

have the same capacity to act as a person of the age of majority as far as

such business is concerned.

� Section III Domicile

• Domicile

The principal place wherein a person lives shall be his/her domicile.

46

• Residence

If a person does not have the domicile in Japan, his/her residence is deemed

to be his/her domicile, whether he/she is a Japanese or a foreign national;

provided, however, that, this shall not apply where the law of domicile controls

in accordance with the applicable provision of the Act Concerning the

Application of Laws or other laws which provide the governing law.

• Temporary Domicile

If any temporary domicile is selected for any act, such temporary domicile is

deemed to be the domicile as far as such act is concerned.

� Section IV Management of Absentee Property and Adjudication of

Disappearance

• Administration of Absentee Property

In cases any person who has left his/her domicile or residence hereinafter

referred to as "absentee" did not appoint an administrator of his/her property

hereinafter in this Section referred to simply as "administrator"

• Remuneration for Administrator

The family court may grant reasonable remuneration to the administrator from

the property of the absentee with due regard to the relationship between the

administrator and absentee and other circumstances

�� Juridical Persons

� Section I Establishment of Juridical Persons

• Establishment of Juridical Person

No juridical person can be formed unless it is formed pursuant to the

applicable provisions of this Code or other laws.

47

• Registration of Establishment of Juridical Person

A juridical person must complete its registration within two weeks from the day

of its establishment at the location of its principal office, and within three

weeks at any location of its other office.

� Section II Management of Juridical Persons

Director: A juridical person must have one or more director

Representative of Juridical Person: The director shall represent the juridical

person with respect to any and all business of the juridical person

� Ordinary General Meeting

The director of an incorporated association must convoke an ordinary general

meeting of the members at least once a year.

� Extraordinary General Meeting

The director of an incorporated association may convoke an extraordinary

general meeting of the members whenever directors find it necessary.

3) Trademark Act (Act No.127 of April 13, 1959)

� Application for trademark registration

Any person who desires to register a trademark shall submit an application to

the Commissioner of the Patent Office accompanied by the required

documents. The application shall state the following matters:

(i)The name and the domicile or residence of the applicant for trademark

registration;

(ii) The trademark for which registration is sought; and

(iii) The designated goods or designated services and the class of goods or

services provided by Cabinet Order.

Where a person desires to register a trademark consisting of a three-

dimensional shape the application shall contain a statement indicating thereof.

Where a person desires to register a trademark consisting solely of characters

designated by the Commissioner of the Patent Office , the application shall

contain a statement indicating thereof.

48

� Examination by an examiner

The Commissioner of the Patent Office shall direct the examination of

applications for trademark registration by an examiner.

� Notification of reasons for refusal

Where the examiner intends to render a decision to the effect that an

application is to be refused, the examiner shall notify the applicant for

trademark registration of the reasons for refusal and provide the applicant

an opportunity to submit a written opinion, designating a reasonable time

limit for such purpose.

�� TRADEMARK RIGHT

� Section 1 Trademark Right

• Duration

The duration of a trademark right shall expire after ten years from the date

of registration of establishment of such right.

Where the renewal of the duration of the trademark right is registered, the

duration shall have been renewed at the time of expiration of the duration.

� Section 3 Registration Fees

A person obtaining the registration of establishment of a trademark right

shall pay as a registration fee for each trademark registration the amount

of 66,000 yen multiplied by the number of classes.

A person filing a request for the registration of renewal of the duration of a

trademark right shall pay as a registration fee for each trademark

registration the amount of 151,000 yen multiplied by the number of

classes.

� Time limit for payment of registration fees

The registration fee shall be paid within 30 days from the service of a

transcript of an examiner's decision or a trial decision to the effect that a

trademark is to be registered.

49

� Penal Provisions

• Person responsible for payment Amount

o Person filing an application for trademark Registration -6,000 yen per

case plus , 15,000 yen for each class.

o Person requesting the division of a trademark Right 30,000 yen per

case.

o Person filing an opposition to registration 3,000 yen per case plus

8,000 yen for each class.

o Person filing a request for a trial or retrial 15,000 yen per case plus

40,000 yen for each class.

4) Industrial Safety and Health Act (Act No. 57 of June 8,

1972)

� General Provisions

• Purpose

The purpose of this Act is to secure, in conjunction with the Labor

Standards Act (Act No. 49 of 1947), the safety and health of workers in

workplaces, as well as to facilitate the establishment of comfortable

working environment.

• Measures for Preventing the Dangers or Health Impairment of

Workers

The employer shall take necessary measures for preventing the

following dangers:

o Dangers due to machines, instruments and other equipment.

o Dangers due to substances of an explosive nature, substances of a

combustible nature and substances of an inflammable nature.

� Organization for Safety and Health Management

• General Safety and Health Manager

The employer shall, as provided for by the Ordinance of the Ministry of

Health, Labour and Welfare, appoint a general safety and health manager

for each workplace of the scale defined by Cabinet Order and have the

said person direct the work of safety officers, health officers, or persons in

charge of management of technical matters.

50

• Safety Committee

The employer shall establish a safety committee at each workplace of the

scale and in the industries defined by Cabinet Order, in order to have it

investigate and deliberate on the following matters and submit its opinion

to the employer:

o Matters pertaining to the basic measures for preventing dangers to

workers.

o Matters pertaining to safety among the causes of industrial accidents

and countermeasures to prevent its recurrence.

• Health Committee

The employer shall establish a health committee at each workplace of the

scale defined by Cabinet Order, in order to have it investigate and

deliberate on the following matters and state its opinion to the employer:

• Matters pertaining to the basic measures for preventing worker'

health impairment

o Matters pertaining to the basic measures for maintaining and improving

the health of workers.

o Matters pertaining to health among the causes of industrial accidents

and countermeasures to prevent its recurrence.

• Measures for Preventing the Dangers or Health Impairment of

Workers

The employer shall take necessary measures for preventing the following

dangers:

o Dangers due to machines, instruments and other equipment.

o Dangers due to substances of an explosive nature, substances of a

combustible nature and substances of an inflammable nature.

� The employer shall take necessary measures for preventing

health impairment as follows:

o Health impairment due to raw materials, gases, vapors, dusts,

insufficient oxygen in air, pathogens, etc. Health impairment due to

radiation, high temperatures, low temperatures, ultrasonic waves,

noises, vibration, abnormal atmospheric pressure, etc.

51

Different Economic sector of Japan

Data Of 2011 Statistics

GDP $5.866 trillion (2011 est.) (nominal;

3rd) $4.444 trillion (2011 est.)

GDP growth -0.7% (2011)

GDP per capita $45,870 (2011 est.) (nominal; 12th)

$34,748 (2011 est.)

GDP by sector Agriculture: 1.2%, industry: 27.3%,

services: 71.6% (2011 est.)

Inflation (CPI) 0.3% (April 2011)

Population

below poverty line

15.7%

Labour force 65.93 million (2011 est.)

Labour force

by occupation

agriculture: 3.9%, industry: 26.2%,

services: 69.8% (2010 est.)

Unemployment 4.6% (2011 est.)

Main industries among world's largest and

technologically advanced producers

of motor vehicles, electronic

equipment, machine tools, steel and

nonferrous metals, ships, chemicals,

textiles, processed foods

Ease of Doing Business Rank 20th

52

ECONOMIC DATA IN JAPAN

Data Of 2011 External

Exports $788 billion (2011 est.)

Export goods motor vehicles 13.6%;

semiconductors 6.2%; iron and steel

products 5.5%; auto parts 4.6%;

plastic materials 3.5%; power

generating machinery 3.5%

Main export partners China 19.7%, US 15.5%, South Korea

8%, Hong Kong 5.2%, Thailand 4.6%

(2011)

Imports $808.4 billion (2011 est.)

Import goods petroleum 15.5%; liquid natural gas

5.7%; clothing 3.9%; semiconductors

3.5%; coal 3.5%; audio and visual

apparatus 2.7%

Main import partners China 21.5%, US 8.9%, Australia

6.6%, Saudi Arabia 5.9%, UAE 5%,

South Korea 4.7% (2011)

FDI stock $161.4 billion (31 December 2010

est.)

Gross external debt $2.719 trillion (30 June 2011)

53

2. INTRODUCTION OF AGRICULTURE SECTOR IN JAPAN

Farming, forestry, and fly-fishing form the primary sector of industry of the

Japanese economy, organized with the Japanese mining industry, but

organized they explanation for only 1.3% of gross national product. Only 15%

of Japan's property is fit for farming, and the farming economy is extremely

maintained and protected.

Agricultural policy makers are frustrated by conflicting goals that are difficult to

resolves especially when their high costs are factored in. While making

reforms to preserve the domestic farming sector and making adoptions so that

Japan can enter free trade agreements, the government also has to enhance

this nation's food self-sufficiency rate and the international competitiveness of

its farms.

UNEMPLOYEMENT RATE OF AGREECULTURE SECTOR IN JAPAN

YEAR UNEMPLOYEEMENT RATE(%)

ANNUAL

2008 9.2

2009 14.3

2010 13.9

2011 12.5

54

http://www.tradingeconomics.com/japan/agriculture-value-added-percent-of-gdp-wb-data.html

AGRICULTURE SECTOR CONTRIBUTION IN JAPAN

YEAR CONTRIBUTION OF

AGREECULTURE SECTOR (%)

2008 1.14

2009 1.16

2010 1.16

http://www.tradingeconomics.com/japan/agriculture-value-added-percent-of-gdp-wb-data.html

55

AGRICULTURE SECTOR GROWTH IN JAPAN

YEAR GROWTH (%)

2008 -1.0

2009 -5.5

2010 4.4

2011 0.7

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries

3. INTRODUCTION OF BANKING SECTOR IN JAPAN

A bank is a financial institution and a financial intermediary that accepts

deposits and channels those deposits into lending activities, either directly by

loaning or indirectly through capital markets. A bank is the connection

between customers that have capital deficits and customers with capital

surpluses.

Banks performance as fee negotiators by guiding checking or current

accounts for clients, disbursing checks pinched by clients on the bank, and

gathering payments put to clients' present accounts. Banks also enable

56

customer payments via other payment methods such as Automated Clearing

House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated

teller machine (ATM).

Banks derive currency by accommodating capitals dropped on recent

accounts, by accepting term deposits, and by issuing responsibility safeties

such as banknotes and bonds. Banks lend currency by production advances

to clients on present financial statement, by creation installment loans, and by

investing in marketable debt safeties and other forms of currency lending.

UNEMPLOYEMENT RATE OF BANKING SECTOR IN JAPAN

YEAR UNEMPLOYEEMENT RATE(%)

ANNUAL

2008 3.987

2009 5.073

2010 5.058

2011 4.882

http://www.economywatch.com/economicstatistics/Japan/Unemployment_Rate_Percentage_

of_Labour_Force/

0

1

2

3

4

5

6

2008 2009 2010 2011

Unemployeement

Unemployee…

57

BANKING SECTOR INFLATION RATE IN JAPAN

YEAR INFLATION RATE OF BANKING

SECTOR (%)

2009 -1.3

2010 -0.7

2011 -0.3

http://www.gfmag.com/gdp-data-country-reports/247-japan-gdp-country-

report.html#axzz2F2RSnoxX

BANKING SECTOR GROWTH IN JAPAN

YEAR GROWTH (%)

2008 -1

2009 -5.5

2010 4.4

2011 -0.7

-1.5

-1

-0.5

0

2009 2010 2011

INFLATION RATE (%)

INFLATION RATE …

58

http://www.gfmag.com/gdp-data-country-reports/247-japan-gdp-country-

report.html#axzz2F2RSnoxX

4. INRODUCTION OF MANUFACTURING SECTOR IN JAPAN

Lean principles are derived from the Japanese manufacturing industry. The

term was first coined by John Krafcik in his 1988 article, "Triumph of the Lean

Production System," based on his master's thesis at the MIT Sloan School of

Management.Krafcik had been a quality engineer in the Toyota-GM NUMMI

joint venture in California before coming to MIT for MBA studies. Krafcik's

research was continuous by the International Motor Vehicle Program (IMVP)

at MIT, which shaped the international greatest-seller book co-authored by

Jim Womack, Daniel Jones, and Daniel Roos called The Machine That

Changed the World.[1] A complete historical account of the IMVP and how the

term "lean" was coined is certain by Holweg (2007)

For many, Lean is the usual of "tools" that promotion in the documentation

and constant exclusion of waste. As waste is eliminated value expands while

manufacture period and price are reduced.

The variance between these two methods is not the objective itself, but

moderately the major method to attaining it. The operation of smooth flow

exposures value difficulties that already occurred, and thus waste decrease

obviously happens as a importance. The benefit demanded for this method is

that it obviously takings a scheme-extensive viewpoint, whereas a leftover

attention every so often incorrectly assumes this perspective.

-6

-4

-2

0

2

4

6

2008 2009 2010 2011

GROWTH(%)

GROWTH(%)

59

MANUFACTURING SECTOR GROWTH IN JAPAN

YEAR GROWTH (%)

2008 0.79

2009 -17.7

2010 18.23

MANUFACTURING SECTOR GDP IN JAPAN

YEAR GDP(%)

2008 19.79

2009 17.77

2010 19.47

60

5. INTRODUCTION OF HEALTH CARE SYSTEM IN JAPAN

The health care system in Japan provides healthcare services, including

screening examinations, prenatal care and infectious disease control, with the

patient accepting responsibility for 30% of these costs while the government

pays the remaining 70%. Payment for individual health facilities is offered via

a worldwide fitness care guarantee scheme that delivers comparative equality

of admission, with costs set by a government committee. Hospitals, by law,

must be run as not-for-profit and be succeeded by doctors. For-profit

companies are not allowable to own or control clinics. Clinics must be owned

and run by doctors.

Long Life Health Care System.

The insurance carrier then remunerates the doctor, hospital, clinic, or other

medical care provider directly for the remainder on a fee for-service basis as

determined by the Ministry of Health, Labour and Welfare. This universal

medical care insurance system gives all citizens access to adequate medical

care, thus contributing greatly to their peace of mind and to the overall level of

health in society. The percentage of Japan’s population aged 65 or over

was 7% in 1970. Just 41 years later, in 2011, it was more than 23.2%. As

of April 2011, Japan had 29.76 million elderly people. Today one in every five

people is 65 years or older, and in 2050 the ratio will likely be one in three. In

2008, medical expenditures of this group totalled 18.99 trillion yen, or 54.6%

of the total

61

HEALTH CARE SECTOR GDP IN JAPAN

YEAR GDP(%)

2008 8.51

2009 9.51

2010 9.49

HEALTH CARE SECTOR GROWTH IN JAPAN

YEAR GROWTH (%)

2008 -1

2009 -5.5

2010 4.4

62

6. INTRODUCTION OF RETAIL SECTOR IN JAPAN

Total retail sales including food & beverages, general merchandise, and

fabrics/apparel & accessories in Japan amounted. Total Retail Sales (US$)

RETAIL SECTOR IN JAPAN

YEAR TOTAL RETAIL SALES( US$)

2008 651215

2009 730743

2010 752572

http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Tokyo%20ATO_

Japan_12-21-2011.pdf

63

64

Overview of Industry, Trade & Commerce

1. Overview of Industry Trade Commerce

Today, despite an overall stagnation on the economy for nearly two decades,

Japan’s industries are still among the most highly advanced and innovative in

the world. Japanese manufacturing products, particularly in electronics and

automobiles, are the world leaders in both production and technological

advancements in their respective fields.

In 2010, Industry was responsible for 23 percent of Japan's GDP. Major

industries are in Japan include motor vehicles, electronic equipment, machine

tools, steel and nonferrous metals, ships, chemicals, textiles, and processed

foods.

Japan’s automobile industry produces the second largest amount of vehicles

in the world behind China. However, Japanese automobile companies remain

among the most valuable and technologically advanced in the world. Japan is

home to six of the top twenty largest vehicle manufacturers in the world –

Toyota (1st), Renault-Nissan (4th), Honda (8th), Suzuki (10th), Mazda (14th),

Mitsubishi (16th). The automobile industry also managed to register a

massive 10.5 percent growth in 2009, in spite of the global financial crisis.

Japan is also the world’s largest electronics manufacturer with prominent

companies such as Sony, Casio, Mitsubishi Electric, Panasonic, Canon,

Fujitsu, Nikon, Yamaha etc. Japanese electronic products are renowned for

their innovation and quality. Backed by its high-tech industries and

companies, Japan had the 8th highest industrial production growth rate in the

world for 2010 at 15.5 percent. Simultaneously, Japan’s industrial production

growth rate was the highest among the G20 nations.

Despite the historical significance of Japanese manufacturing, Services are

the dominant component of the economy – contributing to 75.9 percent of the

GDP in 2010. Major services in Japan include banking, insurance, retailing,

transportation and telecommunications.

65

The Tokyo Stock Exchange is the third largest stock exchange in the world by

market capitalisation – with a total market capitalization of US$3.8 trillion as of

Dec 2010. Japan Post is also the world’s largest postal savings system, and

quite possibly the world’s largest holder of personal savings – at present it

holds about US$2.1 trillion of household assets in its savings account and

US$1.2 trillion of household assets in its life insurance services.

Agriculture’s contribution to Japan’s economy is fairly small when compared

to Industry and Services. In 2010, Agriculture made up only 1.1 percent of the

nation’s GDP. Although its contribution appears minute, agriculture is still a

highly important component of Japan’s economy and society.

Japan’s agricultural economy is highly subsidized and protected. Only 15

percent of Japanese land is suitable for agriculture, though any available land

is highly cultivated. As such, Japan has one of the highest per hectare crops

yields in the world. Though it has a small agriculture sector, Japan is self-

sufficient in the production of rice and fish, but relies heavily on food imports

such as wheat, corn, sorghum and soybeans from the US.

The 2011 earthquake and tsunami were catastrophic for many of Japan’s

industries. Services contracted by 6 percent since the disaster – with

dampened consumer confidence and interruptions to the economy to blame.

The five major industries that are expected to be the most affected by the

crisis are the natural gas industry, the automobile industry, the semiconductor

industry, the oil industry and the tourism industry. (1)

66

2. TRADING SYSTEM OF JAPAN

Japan’s Economic Relationship

Graph Title: Japan Economic Relationship

TRADE & ECONOMIC POLICY ENVIRONMENT

(1) JAPAN'S ECONOMIC ENVIRONMENT

After a severe economic slowdown following the financial crisis in the autumn

of 2008, the Japanese economy began expanding in the spring of 2009,

mainly reflecting an increase in exports and the effects of a series of policy

packages. In 2010, corporate profits have been improving, and household

incomes are apparently sound and steady. However, Japan's economic

recovery recently appears to be pausing, and its economy remains in a

difficult situation as the high unemployment rate shows. In addition, judging

from the recent price trends in Japan, the Japanese economy is in a mild

deflationary phase.

In order to overcome our long-stagnant economy and remove the fear of

continuing future stagnation among the people, our administration has started

initiatives to achieve a "Strong Economy", a "Robust Public Finances" and a

"Strong Social Security System" in an integrated manner. In June 2010, the

government issued a "New Growth Strategy, Blueprint for Revitalizing Japan"

and a "Fiscal Management Strategy, for the Security and Hope of the People",

which contain concrete measures for achieving the above-mentioned three

targets.

Multilateral

Trading

System

Regional &

Bilateral Trade

policy

67

(2) TRENDS IN FOREIGN TRADE

Trade statistics showed that Japan's trade surplus considerably decreased in

2008 and slightly increased in 2009. In 2008, Japan's imports dramatically

increased due to a sharp rise in the price of crude oil, thus decreasing our

trade surplus to ¥2.06 trillion. In 2009, Japan's exports and imports drastically

decreased due to the world economic crisis. A decrease in imports slightly

exceeded that of exports. As a result, the total trade surplus increased slightly

to ¥2.67 trillion (an increase of ¥0.61 trillion from 2008).

The total value of exports from Japan in 2009 amounted to ¥54.17 trillion (a

decrease of 33.1% from 2008)

-Regional trends in the total value of exports in 2009 (compared to 2008)

China down by 21.0%

NIEs(inc. Korea; Singapore; Hong Kong, China; and Chinese Taipei) down by

28.9%

Association of South East Asian Nations down by 30.1%

United States down by 38.6%

European Union (EU) down by 41.0%

Middle East down by 42.6%

The total value of imports to Japan in 2009 amounted to ¥51.49 trillion (a

decrease of 34.8% from 2008)

-Regional trends in the total value of imports in 2009 (compared to 2008)

China down by 22.9%

European Union (EU) down by 24.3%

68

NIEs (inc. Korea; Singapore; Hong Kong, China; and Chinese Taipei) down

by 29.5%

United States down by 31.4%

Association of South East Asian Nations down by 34.4%

Middle East down by 50.2%

3. TRENDS IN FOREIGN DIRECT INVESTMENT

The amount of FDI stocks steadily increased until 2008. That in CY2008 was

¥18.5 trillion (3.6% of GDP) and that in CY2009 was ¥18.4 trillion (3.9% of

GDP). As the Ministry of Internal Affairs and Communications reports, the

situation of employment in foreign companies in Japan, according to the

"2006 Establishment and Enterprise Census", approximately 750,000 regular

employees were employed by companies which have more than 1/3 of foreign

equity.

In June 2010, the Cabinet issued its "New Growth Strategy". From that

strategy, it is noted that Japan will double employment and double direct

incoming investment by inviting foreign firms which bring high value-added

products and services into Japan. Some items related to this are given below:

� For the purpose of strengthening the competitiveness of companies

operating in Japan and encouraging more foreign companies to set up

business bases in Japan, the effective corporate tax rate will be

reduced to the levels of other major countries, taking into consideration

the need to secure tax revenue sources by expanding the tax base.

� With the aim of enabling Japan to revive as an Asian industrial center,

an incentive system containing taxation measures will be considered to

invite foreign firms to set up their Asian head offices and R&D bases in

Japan, which are linked with the degree of their contribution to the

69

employment of highly-skilled personnel. It is aimed to put this system

into operation from the FY2011.1

� A "program for promoting Japan as an Asian industrial center and

direct investment into Japan" (tentative name) will be drawn up by the

end of 2010. This program will include reforms to systems and other

measures to ensure smooth flows of people, goods and funds, with the

aim of making Japan's business environment more appealing.

4. TRADE RELATIONS

India’s exports to Japan more than doubled from US$2.5 billion in 2005-06 to

US$5.2 billion in 2010-11, growing at the average rate of 16 per cent per

annum. However, the share of Japan in India’s global exports shrank from

2.4 per cent in 2005-06 to 2.1 per cent in 2010-11. As a result, Japan slipped

from the 10th to 12th position in India’s exports over the last five years. India’s

imports from Japan nearly doubled from US$4.1 billion in 2005-06 to US$8.1

billion in 2010-11,with an average rate of growth of 14.9 per cent per year.

However, the share of Japan in India’s global imports declined from 2.7 per

cent in 2005-06 to 2.3 per cent in 2010-11. Consequently, Japan’s position in

India’s imports slipped significantly from the 10th to 16th over the last 5 years.2

Total trade between India and Japan had been low at US$13.3 billion in 2010-

11 as against India’s trade with the US at US$43.2 billion and that with its

now, the biggest trade partner,China, at US$59.2 billion . India’s trade with

China recorded an annual average compound 1growth rate of 27.4 per cent

during 2005-96 to 2010-11 against 15.3 per cent for India-Japan trade and 10

per cent for India-US trade.

70

5. INDIA’S TRADE WITH JAPAN

In 2010 the share of Japan in India’s exports plunged to below 2 per cent.

The main items of India’s exports to Japan has been minerals such as iron

ore (constituting 36 percent in 2010), metal products (16 per cent), food

products including marine products (15 percent), raw materials (15 per cent)

and chemical products (8 per cent). It has been noted that the prices of

certain products that India exports to Japan are significantly higher than

India’s exports to other countries. This is due to a much higher cost of

certification 5 by Japanese agencies as compared to Indian agencies. It has

been suggested by India’s Agricultural and Processed Food Products Export

Development Authority (APEDA) that the Japanese government accords

Indian certification agencies an equal status as that of Japanese agencies.

This can particularly boost exports of organic products to Japan which include

basmati rice, honey, spices, tea, and dry fruits (Nataraj, Geethanjali,

2010).Japan had been a major source of India’s imports in 1995 with about 7

per cent share, just behind the US at 10 per cent and Germany at 7.6 per

cent. In 2010, Japan accounted for just a little above 2 per cent of India’s

imports. China overtook the US as the single most important source of India’s

imports in 2005 and it gained a share of nearly 11 per cent of India’s imports

in 2010 against about 6 per cent for the US in that year. India’s major item of

imports from Japan has been general machinery constituting 31 per cent of

total imports in 2010. This is followed by metal products particularly iron and

steel accounting for 23 per cent. Electrical machinery (17 per cent), chemical

products (10 per cent) and transportation machinery (8.5 per cent) are the

other important import products from Japan.

71

6. JAPAN’S TRADE WITH INDIA

Although the share of Japan in India’s trade has been falling significantly over

the years, Japan remains an important trade partner of India. However, India

has been only a marginal trade partner for Japan. India constituted just 0.6

per cent of Japan’s global exports as well as imports in 2005. It seems that a

shift has begun since then and, India’s share in Japanese trade has steadily

improved in recent years. However, this improvement can be seen more in

the case of Japanese exports to India than for her imports from India as

depicted in Table 3.

JAPAN’S TRADE IN INDIA

INDIA’S TRADE IN JAPAN

Graph Title: India Trade in Japan

7. JAPANESE FDI IN INDIA

Following is a table of some selected 2010 imports and

exports from Japan,

Table Title: Japan Import and Export

Product (In billions of yen) Exports Imports

Coal

Computers and units 446.95 1548.03

Construction machines

Iron and steel products 3675.43 761.76

Manufactures of metals

Mechanical handling equip

Motor vehicles

Nonferrous metals 1335.28 1606.18

Petroleum 9405.88

Petroleum products

Power generating machinery

Semiconductors etc 4152.83 2136.04

Ships

Soy beans 160.58

72

7. JAPANESE FDI IN INDIA


exports from Japan, the world's third largest economy.

Table Title: Japan Import and Export

Product (In billions of yen) Exports Imports

Coal 2110.70

Computers and units 446.95 1548.03

truction machines 875.34

Iron and steel products 3675.43 761.76

factures of metals 981.79 761.35

anical handling equip 595.55 1522.58

Motor vehicles 9174.07 595.75

Nonferrous metals 1335.28 1606.18

Petroleum 9405.88

ducts 1592.85

r generating machinery 2327.48 653.34

Semiconductors etc 4152.83 2136.04

2242.26

Soy beans 160.58


the world's third largest economy.

73

Foodstuffs 406.12 5199.42

Iron ore & concentrates 1356.58

LNG 3471.85

Machinery 13316.64 4825.71

Manufactured goods 8784.81 5378.60

Raw materials 946.15 4765.88

Source: Japan Ministry of Finance

Blanks indicate either zero values

or no directly comparable data.

8 ROLE OF GOVERNMENT

Japan’s system of economic management is probably without parallel in the

world. Though the extent of direct state participation in economic activities are

limited, the government’s control and influence over the business is stronger

and more pervasive than in most other countries with market economies. This

control is exercised primarily through the government’s constant discussion

with business and through the authorities’ deep indirect involvement in

banking. Consultation is mainly done by means of joint committees and

groups that monitor the performance of, and set targets for, nearly every

branch and sector of the economy. Japanese bureaucrats utilize broad

discretionary power rather than written directives to offer “administrative

guidance” in their interaction with the private sector in order to implement

official policies. However, since the early 1990s, efforts have been made to

limit the use of such unwritten orders, which have been castigated for creating

an atmosphere of collusion between the authorities and big business.

There are several agencies and government departments that concern

themselves with such aspects of the economy as exports, imports,

investment, and prices, as well as with overall economic growth. The most

important of these agencies is the Economic Planning Agency, which is under

the Ministry of Economy, Trade, and Industry (until 2001 the Ministry of

International Trade and Industry) and, apart from monitoring the daily running

of the economy, also is responsible for long-term planning. The practice of

74

long-term planning has been a major force in the functioning of the Japanese

economy. According to the economic objectives of the government, various

policy measures have been used to shift the allocation of resources among

industrial sectors and to influence the organization of specific industries.

Control has been underpinned by the detailed regulation of business

activities, particularly in the financial sector. However, by the early 1990s

reducing government intervention in the economy had become a major

objective of the authorities. This was viewed as a way to create new business

opportunities and as a necessity for making Japanese domestic markets more

accessible to foreign business, thus revitalizing what was then a moribund

economy. A number of deregulation packages to remove and ease controls

subsequently were introduced and implemented.

In the 1980s the government relinquished to the private sector its monopolies

over the tobacco and salt industries and domestic telephone and telegraph

services, and the publicly owned Japanese National Railways was privatized

as the Japan Railways (JR) Group. Most of the remaining public corporations

are special-purpose entities (e.g., for nuclear power generation) that would be

unprofitable to operate privately or are government financial institutions. The

government also retains an interest in radio and television broadcasting. It

remains active in matters deemed to be of strategic interest, notably nuclear

power generation, which is subsidized through a major program to increase

generating capacity.

75

9 JAPAN IMPORT PROHIBITIONS

Japanese Law prohibits the following goods from being imported:

• Arms & Sword (Ammunition, Cutlass, Dagger, Firearms, Guns, and

Knife.

• Drugs (Awakening, Stimulants, Marijuana, Narcotic, Opium, Poppy

Straw, Psychotropic)

• Animal Quarantine (Antibody, Bacillus, Bacon, Bacteria, Biological

Substance, Blood, Bone, Cell, Coliform, Feathers, Feed, Guts, Horns,

Jerky. Per Food, Protein, Raw Wool & Leather, Sausage, Semen,

Serum)

• Plant Quarantine (Barley, Beans, Clay, Flour, Flowers, Green Coffee,

Hay, Fresh/Dried Fruits, Grain, Herb, Leaf, Malt, Nuts, Potpourri, Rice,

Seeds, Soil, Spices, Tea (Tea bag accepted), Tobacco, Walnut,

Wheat, Wood, Vegetable)

• Toxic/Poisonous Substance

• Articles that infringe upon rights in patent, utility models, designs,

trademarks, or copyrights

• Personal Effects

• Products made in North Korea

• Movie Films (35mm & 70mm)

• *Human & Mouse Origin Antibody/Blood/Serum/Tissue can be

accepted

10 JAPAN EXPORT PROHIBITIONS

Japanese Law prohibits the export of the following goods:

1. Drugs (narcotics, stimulants, opium, psychotropic substances) and

utensils for opium use

2. Firearms and parts, Ammunition

3. Weapon, Nuclear weapon, Chemical

materials

4. Counterfeit money or securities

5. Pornographic or obscene material

6. Articles that infringe on patents, trademarks, copyrights, etc.

7. Goods that are supposed to be supplied to domestic Market in higher

priority than foreign m

8. Certain plants and animals that are subject to CITES (Convention on

International Trade in Endangered Species) regulations.

List of the largest trading partners of Japan

These figures do not include services or foreign direct investment, but only

trade in goods. The fifteen largest Japanese trading partners with their total

trade (sum of imports and exports) in billions of US Dollars for calendar year

2010[1] are as follows:

Graph Title:

Country

China

United States

South Korea

Taiwan

76

10 JAPAN EXPORT PROHIBITIONS

Japanese Law prohibits the export of the following goods:

Drugs (narcotics, stimulants, opium, psychotropic substances) and

utensils for opium use

Firearms and parts, Ammunition

Weapon, Nuclear weapon, Chemical Weapon and their parts or

Counterfeit money or securities

Pornographic or obscene material

Articles that infringe on patents, trademarks, copyrights, etc.

Goods that are supposed to be supplied to domestic Market in higher

priority than foreign market

Certain plants and animals that are subject to CITES (Convention on

International Trade in Endangered Species) regulations.

List of the largest trading partners of Japan




Graph Title: List of the Largest Trading Partners of Japan

Exports Imports Total Trade

149.1 152.8 301.9

118.2 67.2 185.4

62.1 28.5 90.6

52.2 23.0 75.2

Drugs (narcotics, stimulants, opium, psychotropic substances) and

Weapon and their parts or

Articles that infringe on patents, trademarks, copyrights, etc.

Goods that are supposed to be supplied to domestic Market in higher

Certain plants and animals that are subject to CITES (Convention on




Country

Australia

Thailand

Indonesia

Hong Kong

Saudi Arabia

Malaysia

Germany

United Arab Emirates

Singapore

Russia

Qatar

77

Exports Imports Total Trade

15.8 45.0 60.8

34.1 21.0 55.0

15.9 28.1 44.0

42.1 1.5 43.7

6.5 35.8 42.2

17.6 22.6 40.2

20.2 19.2 39.5

United Arab Emirates 7.3 29.2 36.5

25.1 8.1 33.3

8.0 16.1 24.1

1.1 21.6 22.8

78

Overview of Japan economy

Japan's Economy:

Before Japan's 2011 earthquake and nuclear power plant disaster, its

economy was emerging from the deepest recession since the 1970s. It

rebounded strongly in 2010, when GDP increased by a strong 3% -- the

fastest growth in 20 years. It fell off briefly during the last quarter of 2010, but

was expected to pick up again with stronger exports to fast-growing neighbors

in Asia.

However, Japan lost much of its electricity generation when it shut down

nearly all its nuclear power plants after the earthquake. The economy shrank

.5% in 2011 as manufacturing slowed due to the crisis.

If that weren't bad enough, Japan's economy is still challenged by rising

commodity prices -- the country imports most of its food and oil -- and a

shrinking labor pool, as its population ages. Japan is also challenged by

a debt-to-GDP ratio of more than 200%. Like the U.S, much of Japan's debt

resulted from efforts to stimulate its economy out of a 20-year deflationary

period and recession.

Japan's recession became official in Q4 2008 when GDP growth plummeted

12.9% from a year earlier, the worst decline since the 1974 recession. Japan's

economic collapse was a shock, since Q3 growth was only down .1%,

following a decline of 2.4% inQ2 2008. The severe downturn was a result of

slumping exports in consumer electronics and auto sales, 16% of Japan's

economy and a driving force behinds the country's economic revival from

2002-2008.

Japan's economy had only recently recovered from the deflation that hobbled

it in the 1990s. Japan's economy was up 2.1% in 2007, and 3.2% in Q1 2008,

leading many to believe it had finally grown out of its decade-long recession.

79

Japan Economy overview

In the years following World War II, government-industry cooperation, a strong

work ethic, mastery of high technology, and a comparatively small defense

allocation (1% of GDP) helped Japan develop a technologically advanced

economy. Two notable characteristics of the post-war economy were the

close interlocking structures of manufacturers, suppliers, and distributors,

known as keiretsu, and the guarantee of lifetime employment for a substantial

portion of the urban labor force. Both features are now eroding under the dual

pressures of global competition and domestic demographic change. Japan's

industrial sector is heavily dependent on imported raw materials and fuels. A

tiny agricultural sector is highly subsidized and protected, with crop yields

among the highest in the world. Usually self sufficient in rice, Japan imports

about 60% of its food on a caloric basis. Japan maintains one of the world's

largest fishing fleets and accounts for nearly 15% of the global catch. For

three decades, overall real economic growth had been spectacular - a 10%

average in the 1960s, a 5% average in the 1970s, and a 4% average in the

1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely

because of the after effects of inefficient investment and an asset price bubble

in the late 1980s that required a protracted period of time for firms to reduce

excess debt, capital, and labor. Measured on a purchasing power parity (PPP)

basis that adjusts for price differences, Japan in 2011 stood as the third-

largest economy in the world after China, which surpassed Japan in 2001. A

sharp downturn in business investment and global demand for Japan's

exports in late 2008 pushed Japan further into recession. Government

stimulus spending helped the economy recover in late 2009 and 2010, but the

economy contracted again in 2011 as the massive 9.0 magnitude earthquake

in March disrupted manufacturing. Electricity supplies remain tight because

Japan has temporarily shut down most of its nuclear power plants after the

Fukushima Daiichi nuclear reactors were crippled by the earthquake and

resulting tsunami. Estimates of the direct costs of the damage - rebuilding

homes, factories, and infrastructure - range from $235 billion to $310 billion,

and GDP declined almost 1% in 2011. Prime Minister Yoshihiko NODA has

proposed opening the agricultural and services sectors to greater foreign

80

competition and boosting exports through membership in the US-led Trans-

Pacific Partnership trade talks and by pursuing free-trade agreements with the

EU and others, but debate continues on restructuring the economy and

reining in Japan's huge government debt, which exceeds 200% of GDP.

Persistent deflation, reliance on exports to drive growth, and an aging and

shrinking population are other major long-term challenges for the economy.

Japan's Importance to the Global Economy:

Japan is the world's fourth largest economy (after the EU, U.S. and China), so

its decline would drag down the global economy, as well. Japan also hires

temporary workers from nearby South Asian countries, who are now being

laid off in droves.

To combat recession in the 1990s, the Bank of Japan had lowered interest

rates to 0% and bought U.S. Treasuries, keeping the yen low which made

exports competitively priced.

The low yen caused investors to borrow money in yen at a low interest rate

and invest it in higher-paying currencies, such as the dollar. This was known

as the yen carry trade, and created much liquidity in the global marketplace.

Last year, the yen carry trade collapsed, and the yen skyrocketed. The

stronger yen made Japanese exports less competitive at a time

when demand had fallen in the U.S.

Why Japan's Economy is Important to the India:

India is close to replacing Japan as the world's third largest economy,

possibly as early as this year, says a senior economist at India credit rating

agency Crisil. Sunil Sinha, the firm's main macroeconomist, based the

projections on India's purchasing power parity, saying that tsunami-wracked

Japan will see a decline in GDP this year, while India's economy will expand

as will the purchasing power of its currency, the rupee.

81

As it stands now, India is the fourth-largest economy in the world, trailing the

U.S., China and Japan. GDP figures from 2010 show that the Japanese

economy was worth $4.31 trillion, with India at $4.06 trillion. Not far behind.

The earthquake and tsunami in March nearly shut Japan down for a month

and now Japan's economy is expected to post no growth at all this year, at

best, while India's economy will grow between 7% and 8% in 2011.

“India should overtake Japan in 2011 to become the third-largest economy in

the world at purchasing power parity,” Sunil Sinha, head of research and

senior economist at Crisil was quoted saying in The Economic Times of India

on Tuesday.

The International Monetary Fund's growth forecast for India and Japan show

both country's GDP levels about the same in constant dollar terms, but the

disaster in Japan has taken its toll on the nation's growth. “Were it not for the

earthquake and tsunami, India would have overtaken Japan in around 2013-

14,” said Sinha.

Economy:

The Japanese economy is one of the third largest in the world. Only the USA

and China have a higher GNP. The Japanese currency is the Yen.

Exports: Japan's main export goods are cars, electronic devices and

computers. Most important trade partners are China and the USA, followed by

South Korea, Taiwan, Hong Kong, Singapore, Thailand and Germany.

Imports: Japan has a surplus in its export/import balance. The fundamental

import goods are raw materials such as oil, foodstuffs and wood. Major

supplier is China, followed by the USA, Australia, Saudia Arabia, South

Korea, Indonesia and the United Arab Emirates.

Industries: Manufacturing, construction, distribution, real estate, services,

and communication are Japan's major industries today. Agriculture makes up

only about two percent of the GNP. The largest part essential farming product

82

is rice. Resources of raw materials are very limited and the mining industry

rather small.

Banks:

Banks in Japan operate similarly to banks in other countries. There are a

variety of institutions, ranging from large international banks to smaller

regional ones. The large domestic banks include Japan Postal Bank, Mizuho,

Tokyo-Mitsubishi UFJ, Sumitomo, Resona, Citibank and Shinsei Bank.

Furthermore, several online banks, most notably Seven Bank, have recently

gained popularity and offer their customers banking via the internet and a

network of ATMs.

Living cost

Living costs in Japan and especially in Tokyo are famous to be among the

world's highest. However, if you live outside of central Tokyo, adjust to a

Japanese lifestyle and do not depend too heavily on food and products from

your home country, you may be surprised how inexpensive Japan can be.

Housing

Some of the world's most expensive land can be found in central Tokyo.

Consequently, even tiny apartments in the city center are very expensive.

However, housing costs are distinctly lower in Tokyo's suburbs,

surrounding prefectures and in other regions and cities of Japan. Extra

commuting costs are often more than compensated by the savings on the

rent, especially as many Japanese companies pay part or all of their

employees' commuting expenses. If you prefer to live close to city

centers, gaijin houses are an inexpensive option to consider.

Utilities such as gas, water and especially electricity are expensive,

and phone rates are high. For international calls, consider internet phones,

callback services and other offers for the expat community.

83

Japan's economic growth

It is a matter of pride for Japan that it houses one of the most educated,

skilled and healthy human populations in the world. Boasting the highest life

expectancy in the world, the country successfully offset the disadvantages of

having limited natural resources and arable land. While the unparalleled

economic recovery of Japan after World War II was propelled by the

manufacturing sector, primarily by the automobile and the consumer

electronics industry, the economy progressively became more broad-based,

shifting to a services-centered economy.

Exports have always been one of the critical drivers of the Japanese

economy. Not surprisingly, this robust trade performance enabled Japan to

have the second largest stock of foreign exchange reserves in the world, after

China. However, Japan's external demand is still driven by manufacturing, as

over 65% of its exports are comprised of transport equipment, electrical

machinery, and general machinery.

Japan also emerged as a global financial center, with the Tokyo Stock

Exchange becoming one of the most important stock exchanges in the world.

A global leader in innovation and quality, Japan has made ground-breaking

contributions in automotive technology and design.

Japan's economic growth took a dive because of the natural disasters, but

2012 will clearly be a bounce-back year, fueled by rebuilding as well as the

general economic strength of the areas not directly affected by the earthquake

and tsunami. In subsequent years, growth is likely to taper down to Japan's

sustainable long-term growth rate of just over one percent. The IMF forecast,

which is typical of many private sector outlooks, reflects this. However, there's

significant uncertainty surrounding this view of the future.

84

GDP (purchasing power parity):

$4.389 trillion (2011 est.) country comparison to the world: 5

$4.41 trillion (2010 est.)


GDP (official exchange rate):


GDP - real growth rate:

-0.5% (2011 est.)

country comparison to the world: 202

4% (2010 est.)

-6.3% (2009 est.)

GDP - per capita:

$34,300 (2011 est.) country comparison to the world

$34,600 (2010 est.)

$33,300 (2009 est.)

GDP - composition by sector:

Agriculture: 1.4%

Industry: 24%

Services: 74.6% (2011 est.)

Labor force:

62.74 million (2011 est.) country comparisons to the world

85

Labor force - by occupation:

Agriculture: 3.9%

Industry: 26.2%

Services: 69.8% (2010 est.)

Unemployment rate: 4.8% (2011 est.) country comparison to the world:

445% (2010 est.)

Population below poverty line:

15.7% (2007)

Investment (gross fixed):

20.9% of GDP (2011 est.)

Budget:

revenues: $1.984 trillion

expenditures: $2.483 trillion (2011 est.)

Taxes and other revenues:

33.9% of GDP (2011 est.)

Budget surplus (+) or deficit (-):

-8.5% of GDP (2011 est.)

Public debt:

208.2% of GDP (2011 est.) country comparison to the world: 2199.7% of

GDP (2010 est.)

Inflation rate (consumer prices):

0.4% (2011 est.)

-0.7% (2010 est.)

Commercial bank prime lending rate:

1.4% (31 December 2011 est.)

1.475% (31 December 2010 est.)

86

Stock of narrow money:

$6.696 trillion (31 December 2011 est.)


Stock of broad money:

$16.46 trillion (31 December 2010)

$15.43 trillion (31 December 2009)

Agriculture - products:

rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish

Industries:

among world's largest and technologically advanced producers of motor

vehicles, electronic equipment, machine tools, steel and nonferrous metals,

ships, chemicals, textiles, processed foods

Industrial production growth rate:

-1.5% (2011 est.)

Natural gas - proved reserves:

20.9 billion cu m (1 January 2011 est.)

Current account balance:

$122.8 billion (2011 est.)

$195.8 billion (2010 est.)

Exports:

$800.8 billion (2011 est.)

$730.1 billion (2010 est.)

Exports - commodities:

transport equipment, motor vehicles, semiconductors, electrical machinery,

chemicals

87

Exports - partners:

China 19.4%, US 15.7%, South Korea 8.1%, Hong Kong 5.5%, Thailand 4.4%

(2010)

Imports:

$794.7 billion (2011 est.)

$639.1 billion (2010 est.)

Imports - commodities:

machinery and equipment, fuels, foodstuffs, chemicals, textiles, raw materials

Imports - partners:

China 22.1%, US 9.9%, Australia 6.5%, Saudi Arabia 5.2%, UAE 4.2%, South

Korea 4.1%, Indonesia 4.1% (2010)

Reserves of foreign exchange and gold:



Debt - external:

$2.719 trillion (30 June 2011)

$2.441 trillion (30 September 2010)

Stock of direct overseas investment - at home:

$146.7 billion (31 December 2011 est.)


Stock of direct overseas investment - abroad:

$880 billion (31 December 2011 est.)


Exchange rates:

yen (JPY) per US dollar -

88

79.67 (2011 est.)

87.78 (2010 est.)

93.57 (2009)

103.58 (2008)

117.99 (2007)

Fiscal year- 1 April - 31 March

89

Regional differences

The region of Japan are not official administrative units, but have been

traditionally used as the regional division of Japan in a number of

contexts. For instance, maps and geography textbooks divide Japan into the

eight regions, weather reports usually give the weather by region, and many

businesses and institutions use their home region as part of their names

(Kinki Nippon Railway, Chūgoku Bank, Tōhoku University, etc.). While Japan

has eight High Courts, their jurisdiction do not correspond to the eight region

below.

Beginnings north to south, the traditional region are:

• Hokkaidō (the island of Hokkaidō and nearby islands, population:

5,507,456, largest city: Sapporo)

• Tōhoku region (northern Honshū, population: 9,335,088, largest

city: Sendai)

• Kantō region (eastern Honshū, population: 42,607,376, largest

city: Tokyo)

• Nanpō Islands: part of Tokyo Metropolis

• Chūbu region (central Honshū, together with Mt. Fuji, population:

21,714,995, largest city: Nagoya), sometimes divided into:

o Hokuriku region (northwestern Chūbu, largest city: Kanazawa)

o Kōshin'etsu region (northeastern Chūbu, largest city: Niigata)

o Tōkai region (southern Chūbu, largest city: Nagoya)

• Kansai or Kinki region (west-central Honshū, population: 22,755,030,

largest city: Osaka)

• Chūgoku region (western Honshū, population: 7,561,899, largest

city: Hiroshima)

• Shikoku (island, population: 3,977,205, largest city: Matsuyama)

• Kyūshū (island, population: 14,596,977, largest city: Fukuoka) which

includes

� Ryukyu Islands (Nansei-shotō)

� Satsunan Islands: part of Kagoshima Prefecture

90

� Ryukyu-shotō and Daitō Islands: Okinawa

Each contain several prefectures, except the Hokkaidō region, which covers

only Hokkaidō.

Import and Export in Japan

Japan is the 5th largest importer and exporter in the world.

Japan's Import and Export Indicators and Statistics at a Glance (2010)

Total value of exports: US$765.2 billion

Primary exports - commodities: transport equipment, motor vehicles, semi

conductors, electrical machinery, chemicals

Primary exports partners: China (18.88 percent of total exports), US (16.42

percent), South Korea (8.13 percent), Taiwan (6.27 percent), Hong Kong

(6.27 percent)

Total value of imports: US$636.8 billion

Primary imports - commodities: machinery and equipment, fuels,

foodstuffs, chemicals, textiles, raw materials

Primary imports partners: China (22.2 percent of total imports), US (10.96

percent), Australia (6.29 percent), Saudi Arabia (5.29 percent), UAE (4.12

percent), South Korea (3.98 percent), Indonesia (3.95 percent)

Japan's imports from India up 21.5% in last fiscal

Japan's imports from India jumped 21.5 per cent to ¥54 billion in the financial

year that ended on March 31. Mr. Mitsuo Kawaguchi, Consul General of

Japan, said this at an interaction with EEPC India (formerly Engineering

Export Promotion Council) members here.

The Indian engineering industry appears poised for better access to the

Japanese market and more Japanese companies are willing to set up joint

91

ventures with their Indian counterparts. Mr Kawaguchi said after the signing of

the Comprehensive Economic Partnership Agreement (CEPA) in February

last year that there has been a visible change in the two-way trade.

Under the CEPA, Japan eliminated tariffs on 87 per cent of its tariff lines. Over

the next decade, it would remove import tariffs in a phased manner on nearly

97 per cent of the tariff lines. Iron, steel, zinc, aluminum and copper items

from India can pass through with zero duty into Japan.

Industrial and automotive components form a substantial part of the exports to

Japan.

“Japan is looking for outsourcing opportunity in India,” he said. Japanese

company be as well keen to set up manufacturing basis in India.

92

Business overview of Japan & International trade level

Japan Business in Indian Context

The Indian Navy and the Japanese Maritime Self Defense Force conducted

their first ever bilateral naval exercise during a visit of four Indian Navy

ships to Japan from June 5 to 9 as part of the scheduled Overseas Fleet

Deployment. The exercise was conducted off the coast of Japan on 09-10

June, 2012.

The conduct of the bilateral naval exercises between both countries was

decided during the visit of Defense Minister A.K. Antony to Japan in

November 2011.

Units of the Japanese Maritime Self Defense Force (JMSDF) participated and

included assets such as two destroyers, one maritime patrol aircraft, and a

helicopter. Indian Naval units participating are INS Rana, INS Shivalik, INS

Karmukh and INS Shakti.

India’s four ships entered Tokyo on 05 Jun 12 after visiting Singapore,

Vietnam, Philippines and Republic of Korea. The three day stay in Tokyo

coincides with commemoration of 60 years of diplomatic relations between

India and Japan.

Topic: India-Japan Trade From 2004-2010

Japan-India Trade (Yen: billion)

YEAR 2004 2005 2006 2007 2008 2009 2010

TREDE EROM

INDIA TOJAPAN

283 352 472 491 544 348 A97

TREDE FROM

JAPAN TO INDIA

329 388 518 723 819 591 792

93

Share to Japanese total trade of China and of the US

Outlook for 2012

� The Chinese government has been intensifying efforts towards easing

its monetary policies to avoid further economic slowdown. However,

they are cautious about implementing large-scale stimulus measures to

create domestic demand, and any increase in demand resulting from

such economic measures is expected to be limited. In addition, China’s

slowing industrial production is forecasted to continue, thus Japan’s

exports to China are likely to decline.

� Imports from China are expected to see a modest rise, fueled by the

increasing imports of smart phones.

� In view of the circumstances, Japan-China trade throughout 2012 is not

expected to see a large increase, but could possibly set a new record

high with a modest increase over the previous record set in 2011.

� The trade deficit is likely to surpass the previous record of US$28.8

billion set in 2005.

94

Japan trade with other countries (2011-12) (Million yen)

Sr. No. Countries name Export Import

1 China 10,70,244 10,41,013

2 Iran 1,36,103 10,27,380

3 Taiwan 3,67,236 1,53,383

4 Bahrain 37,303 57,374

5 Hong Kong 34,19,761 1,22,979

6 Saudi Arabia 5,17,243 40,25,783

7 Viet Nam 7,63,796 9,19,857

8 Kuwait 1,07,372 10,44,215

9 Thailand 29,88,515 19,53,163

10 Qatar 81,078 23,95,410

11 Singapore 21,70,069 6,90,941

12 Oman 2,22,645 4,09,686

13 Malaysia 14,96,147 24,25,671

14 Israel 1,73,630 86,096

15 United Arab Emirates 5,92,258 34,13,092

16 Philippines 8,94,085 71,52,066

17 European Union (EU) 76,19,252 64,11,009

18 Indonesia 14,12,322 27,15,956

19 Denmark 39,585 1,92,674

20 India 8,82,081 5,43,290

21 U.K. 13,04,442 5,78,622

22 Pakistan 1,35,255 36,563

23 Ireland 71,136 3,33,191

24 Netherlands 14,28,942 4,55,220

25 Belgium 5,41,975 2,67,438

26 France 6,37,658 9,43,602

27 Germany 18,71,403 18,56,156

28 United state 59,31,422 7,09,362

29 Canada 7,09,362 10,31,567

95

Business overview of Japan

Trade policy of Japan

• Export policy of Japan

• Import policy of Japan

�� Export policy of Japan

For many years, sell to other countries promotion was a large issue

in Japanese government course of action. Government official acknowledged

that Japan required importing to grow and grow, and it needed to generate

exports to pay for those imports. After 1945, Japan had complication export

enough to pay for its imports until the mid-1960s, and resulting deficits were

the justification for sell to other countries endorsement programs and import

restrictions.

The belief in the need to promote export is early strong and part of Japan's

self-image as a "processing country A dealing out nation must import raw

materials but is capable to pay for the imports by adding importance to them

and exporting some of the output. Nations develop stronger economically by

affecting up the industrial hierarchy to produce products with superior value

added to the basic inputs. Rather than letting markets get done this

movement on their own, the Japanese control felt the economy should be

guide in this way all the way through industrial policy.

Japan's methods of promote exports have taken two paths. The first was to

build up first-class industries that can firstly substitute for imports and then

fight in international markets. The second was to provide incentives for firms

to export.

During the first two decades later than World War II, export incentives took the

form of a join up of tax support and government assistance to construct export

industries. After joining the International Monetary Fund (IMF) in 1964,

however, Japan had to drop its main export incentive — the whole exclusion

of export income from taxes — to fulfill with IMF procedures. It did keep into

96

the 1970s, however, extraordinary tax action of costs for market development

and export endorsement.

Once chronic trade deficits came to an end in the mid-1960s, the require for

export promotion policies diminished. Virtually all export tax incentives were

eliminated over the track of the 1970s. Even JETRO, In the 1980s, Japan

constant to use industrial policy to support the growth of new, more complex

industries, but direct export promotion measures were no longer division of

the policy package.

The 1970s and 1980s saw the future out of policies to restrain exports in

certain industries. The great achievement of some Japanese export industries

formed a criticism in other countries, either because of their success per se or

because of allegations of unjust aggressive practices. Under General

Agreement on Tariffs and Trade (GATT) course of action, nations have been

reluctant to raise tariffs or compel import quotas. quota violate the guidelines,

and raising tariffs goes against the common trend connecting industrial

nations. Instead, they have resorted to persuasive the exporting country to

"voluntarily" hold back exports of the offending product. In the 1980s, Japan

was quite willing to carry out such export restraints. Among Japan's exports to

the United States, steel, color television sets, and automobiles all were topic

to such restraints at a variety of times.

�� Import policy of Japan

Japan began the postwar period with heavy import barrier. practically

all products were topic to government quotas, many faced high tariffs,

and MITI had power over the portion of the foreign exchange that companies

needed to pay for any import. These policies were acceptable at the time by

the weaken condition of Japanese industry and the country's regular trade

deficit.

The main impulsion for change throughout has been worldwide

commitment that is, response to foreign, rather than domestic, and force. The

result has been a lengthy, reluctant process of reducing barriers, which has

irritated many of Japan's trade partners.

97

Japan has been a partaker in the major rounds of tariff cutting negotiations

under the GATT framework — the Kennedy Round complete in 1967,

the Tokyo Round completed in 1979, and the Uruguay completed in 1993. As

a result of these agreements, tariffs in Japan fell to a low level on average.

Upon complete performance of the Tokyo Round agreement, Japan had the

lowest average tariff level among industrial countries—2.5 percent, compared

with 4.2 percent for the United States and 4.6 percent for the European Union

1980s

Japan's quotas also dropped. From 490 items under quota in 1962, Japan

had just twenty-seven items under quota in the mid-1980s, and that number

dropped again late in the decade to 22 with further agreements programmed

to move toward into effect in the early 1990s, which would reduce the number

again. But those products still under allocation proved to be highly able to be

seen and were the purpose of complaints by exporting countries. The

reduction of restricted items in the late 1980s resulted from Japan's failure of

a GATT case brings by the United States about import limitations on 12

farming products. In addition, heavy force from the United States led to an

agreement that Japan would end import quotas on beef and citrus fruit in

1991.

1990s to 2010

The collapse of the Japanese asset price bubble in the early 1990s and the

following Lost Decade helped matters. price cut markets opened the supply

chains, and several companies curved to foreign trade and savings to avoid

losses and even insolvency. Products of Japanese companies that were

Produced in South-Asian countries were reimported at lower prices. The

Japanese consumer also changed: Economic problems forced many

Japanese to look for cheap prices first and care about national pride or

superior quality later

98

�� Documentation for international trade

• Key Documents:-

A pro forma invoice: - is an invoice, like letter of intent, from the exporter to

the importer that outlines the selling terms, price, and delivery if goods are

actually shipped .if the importer likes the terms and condition, it will send a

purchase order and arrange for payment. At that point, the exporter can issue

a commercial invoice.

A commercial invoice:- is a bill for goods from buyer to seller. It contains a

description f the goods, the address of buyers and sellers, the delivery and

payment terms .many government use this forms to assess duties.

A bill of lading: is a receipt for goods delivered to the common carrier

transformation, a contract for the service rendered by the carrier, and a

document of title.

A consular invoice: is something required by countries as a mean of

monitoring import .governments can use a consular invoice to monitor a price

of import and a generate revenue for the embassies that issue the consular

invoice

A certificate of origin: - it indicates where the product originated and is

usually validated by an external source, such as the chamber of commerce. It

helps Countries determine the specific tariff schedule of imports.

A shipper’s export declaration: - is used by the exporter’s government to

monitor exports and compile trade statistics.

An export packing list: - itemize the material in each individual package,

indicate the type of package, and is attached to the outside of the package.

The shipper or freight forwarder, and sometimes customs officials, use the

packaging list to determine the nature of the cargo and whether the correct

cargo is being shipped.

99

PRESENT TRADE RELATION & BUSINESS VOLUME OF

JAPANESE PRODUCT WITH GUJARAT

Japanese Companies in Gujarat

Japanese company Indian company Product/sector/area

Kowa Company Ltd. Adani port Ltd. Cargo Handling & Port

Infrastructure.

Chiyoda Corporation L&T Engineering

Matsushita Electric Matsushita Lakhanpal

battery India

Dry Cell Battery

C.ITOH & co.Ltd. Reliance industries

Ltd.

Refining Of Crude Oil &

Organic Chemicals

Hitachi Life & Home

Solution Inc.

Hitachi Life & Home

Solutions India Ltd.

Air Conditioners.

Hitachi Displays JCT Electronics Electronics

Ricoh Company Ltd. Ricoh India Ltd. Facsimile,Transceiver,photoco

piers

Japan Metal Gasket

Company

Banco product Automobile cylinder Gasket

Kyoto Machinery Texprint Engineers Industrial Machinery

Nippon Sanso

Corporation

Indox India Ltd. Technology For Cryogenic

Tanks

Seiki Kogyosho Power Build Elecon

Gears Ltd.

Geared Motors And Reducers

Nichimen India Gelatine

andChemicals

Chemicals

100

Name of company in Gujarat

No Company name Industry City

1 Asahi Songwon Industries Manufacturing of inks Ahmedabad

2 Dentsu Marcom

Pvt. Ltd.,

Ahmedabad Branch Advertising Ahmedabad

3 DIC India Ltd., Ahmedabad Factory

Manufacturing & sales of printing

inks

Ahmedabad

4 Erbis Engineering

Co

Ahmedabad Branch Sales &

service for medical& other

professional equipment

Ahmedabad

5 IFFCO-Tokio

General Insurance

Co. Ltd

Ahmedabad Branch on-life

insurance

Ahmedabad

6 IL & FS Education

& Technology

Service Ltd

Ahmedabad Branch Education

services

Ahmedabad

7 JTB Jupiter

Express Services

Pvt. Ltd

Ahmedabad Branch Forwarding Ahmedabad

8 JUKI INDIA Pvt. Ltd Ahmedabad Service Center

Import and re-sell of machinery

Ahmedabad

9 Kintetsu World

Express (India)

Pvt.Ltd

Ahmedabad BranchI nternational

freight forwarding

Ahmedabad

10 Mitsui O.S.K. Lines

(India) Pvt.Ltd.,

Ahmedabad Branch Shipping Ahmedabad

101

11 ORIX Auto

Infrastructure

ServicesLtd

Ahmedabad BranchAuto leasing Ahmedabad

12 Ricoh India Ltd. Ahmedabad Branch Photocopying

machines &printers

Ahmedabad

13 Tata Teleservices

Limited

Gujarat Office Mobile

telecommunication services

Ahmedabad

14 Terumo Penpol Ltd. .Ahmedabad Sales Office

Production of blood packet

Ahmedabad

15 Yokohama India

Pvt. Ltd

Ahmedabad Branch Sales of

passenger cartyres

Ahmedabad

16 IFFCO-Tokio

General Insurance

Co. Ltd

Surat Branch Non-life insurance Surat

17 Indo Japan Pen

Mfg. Co. Pvt. Ltd

Surat Factory Manufacturing of

pen

Surat

18 L&T-MHI Turbine

Generators Pvt.Ltd

., Head Office Manufacturing and

sales of steam turbine & generator

Surat

19 Span Nihon

Kohden

DiagnosticsPvt. Ltd

Production of hematoro gictest

medicine

Surat

20 Ricoh India Ltd., Gandinagar Branch Photocopying

machines &printers

Gandinagar

21 L & T Chiyoda Ltd Plant design Vadodara

22 L&T-MHI Boilers

Pvt. Ltd

Vadodara Branch Manufacturing

and sales of coal firing boiler

Vadodara

102

Japanese Interested In Gujarat

Japanese investment in the state is poised to rise in the coming years,

members of the delegation who accompanied chief minister on the Japan

tour, said on Saturday.

“A large number of Japanese companies have evinced interest in coming to

Gujarat. We are confident that massive investments will be made by

Japanese companies in Gujarat in the coming years,” MaheshwarSahu,

principal secretary, industries department, told media persons.

Japanese investment in Gujarat would be mainly in automobiles, auto

ancillary, solar panel manufacturing and in textiles to a certain extent, he said.

“The Japanese government and industry are very serious on expanding ties

with Gujarat. Currently, only 29 Japanese companies have presence in

Gujarat. This number is poised for a big jump in the next couple of years,” he

added.

Sahu said that the visit was a highly successful one and would open doors for

enhanced co-operation between Gujarat and Japan in various sectors.

ZydusCadila CMD, Pankaj Patel, who was one of the delegation members,

too said that Japanese businessmen had shown a lot of interest in Gujarat.

“There were fruitful discussions on enhancing investment, tourism and cultural

activities during the tour,” Patel said.

ParimalNathwani of Reliance Industries said that Gujarat occupies an

important place in the scheme of things of Japanese companies.

“The treatment given to the CM during the tour was similar to that given to a

PM. It seems that the Japanese have full trust in the chief minister’s

leadership,” he said.

Sudhir Mehta, CMD of Torrent Group, said that chief minister Modi’s visit to

Japan in 2007 is now bearing fruit.

103

Japan-Gujarat: potential

Scope for Japanese companies in Gujarat

• Infrastructure, including real estate Devalopment

• Transport infrastructure project such as Mass Rapid Tansit systems for

Rail and bus

• Ports, including port & cargo management ,integrated Solution in

Marine Logistics.

• It, ICT, ITES, Hogh-end Electronics

• Japan companies Can set up IT and Electronics Industrial Park

• Engineering-Jointly develop an auto –ancillary industrial park for export

of auto components

• Chemical and Allied industries-technology Transfer

• Tourism –Theme Park, Tourist Trails, Special Entertainment Zones.

Gujarat is celebrating 2006 as tourism year

• Healthcare-Gujarat accounts for 31% of the country’s Medical Tourism.

• Biotechnology, Nano-Science, Electronics, Communication

Technology, etc.

104

Japanese Companies Turnover In Gujarat Manufacturers

1] Plasto processors

Export of sesame seeds7) export of garbage bags/jumbo bags. Our group

turnover exceeds 200 corer Rs.We interested in offering salt for industrial and

consumer use in any form and in quantity of about 10,000 m. T. Per

month.We are also been awarded internaional price for quality of our salt.

Busi.

Telephone: 91-2836-253382,Address: Shed No 306, Kasez, Gandhidham,

Gujarat, India.

2] UMA OFFSET

Uma offset of Business : Manufacturer, Exporter Number of Employees : Upto

10 People Turnover : Upto US$ 0.25 Million (or upto Rs. 1 Crore

Approx.)BusinessType: Manufacturer Product/Service: gift bag,children

book,paper bag,calendar,Annual report-books,Printed flyers,educational

book,poster,leaflates,box,br.

Telephone: 91-79-25626324Address: G-4, Madhavpura Market, Shahibaug,

Ahmedabad, Gujarat, India.

3] Pushpak Metals

Company PUSHPAK METALS was established in the year 1986 having

current turnover of Rs. 4 Crore appx. Let us introduce ourselves with some

important information. Pushpak Metals, the company is engaged in Indenting

of Metal and Scrap of all kinds and cater to the respective Industry & trade.

Havin.

Telephone: 91-0-9879158417Address: OPP. Bhidbhanjan Hanuman Mandir,

Ahemdabad, Gujarat, India

105

4] Airolam Limited

Airolam isA 100 crore rupees turnover group is now into laminate industry with

a vision to satisfy increasing demand of decorative laminate in various

sectors. Airolam limited is located at Gujarat which is 70 kilometers away from

Ahmedabad. However, with a proper infrastructure and humid less wheth.

Telephone: 91-2770-240572Address: Dalpur Village, Ananpur Approach

Road, Ta. : Pratij, Dist.

5] SHREE MARUTI TIMBERS

ASTRUCTURE6 COMPNY Profile(1) Business Type manufacturer &

supplier(2) Turnover 1.2 crore per year3) Primary competitive advantages

world class quality,reasonable price Business Type: Manufacturer, Trading

Company,Distributor/WholesalerProduct/Service:PALLETS,BOXES,CAREAT

S,PLYW.

Telephone: 91-02646-223127 Address: PLOT NO 88 / 1, TIMBERMARKET,

G. I. D. C, ANKLESHWAR, Gujarat,

Trade policy of Japan

Export policy of Japan

For many years, export promotion was a large Problems in Japanese

government policy. Government officials known that Japan needed to import

to produce and develop, and it needed to produce exports to pay for

those imports. After 1945, Japan had complexity exporting enough to pay for

its imports until the mid-1960s, and resultant deficits were the reason for

export support programs and import restrictions.

The trust in the need to promote exports is early strong and part of Japan's

self-esteem as a "processing nation." A meting out nation have to import raw

materials but is capable to pay for the imports by accumulation value to them

and exporting some of the output. Nations grow stronger economically by

moving up the industrial ladder to produce products with greater value added

to the basic inputs. Rather than letting markets accomplish this movement on

106

their own, the Japanese government felt the economy should be guided in this

direction through industrial policy.

Japan's methods of promoting exports have taken two paths. The first was to

develop world-class industries that can originally substitute for imports and

then competition in international markets. The second was to provide

incentives for firms to export.

During the first two decades after World War II, export incentives took the

form of a mixture of tax release and government support to build export


however, Japan had to go down its major export motivation — the total

exception of export income from taxes — to comply with IMF procedures. It

did maintain into the 1970s, however, special tax handling of costs for market

development and export promotion.

Once constant trade deficits came to an end in the mid-1960s, the need for

export promotion policies diminish. In effect all export tax incentives were

eliminate over the lessons of the 1970s. In the 1980s, Japan continued to use

industrial policy to promote the growth of new, more complicated industries,

but direct export promotion measures were no longer part of the rule package.

The 1970s and 1980s saw the manifestation of policies to control exports in

certain industries. The great success of some Japanese export industries

created a reaction in other countries, either because of their success per se or

because of allegations of unjust competitive practices. Under General

Agreement on Tariffs and Trade (GATT) rule, nations have been averse to

raise tariffs of import quotas. Quotas violate the guidelines, and raise tariffs

goes beside the general trend among industrial nations. Instead, they have

resorted to realistic the exporting country to "freely" restrain exports of the

wrong product. In the 1980s, Japan was to a certain extent willing to bring out

such export chains. Among Japan's exports to the United States, steel, color

tube sets, and automobiles all were subject to such chains at a variety of

times.

107

Import policy of Japan

Postwar era

Japan begins the postwar period with heavy import barrier. In effect all goods

were subject to government quotas, many face high tariffs, and MITI had

authority over the part of the foreign exchange that companies needed to pay

for any import. These policies were justified at the time by the weakened

position of Japanese industry and the country's unrelieved trade deficits.

The main force for change during has been international obligation that is,

reply to foreign, rather than domestic, and force. The result has been a

extensive, unwilling process of reducing barriers, which has irritated many of

Japan's trade partners.

Japan has been a participant in the major rounds of tariff cutting discussions

under the GATT structure — the Kennedy Round completed in 1967,

the Tokyo Round completed in 1979, and the Uruguay done in 1993. As a

outcome of these agreements, tariffs in Japan cut down to a low level. Upon

complete accomplishment of the Tokyo Round agreement, Japan had the

lowest regular tariff level amongst industrial countries—2.5 percent, compared

with 4.2 percent for the United States and 4.6 percent for the European

Union (known as the European Community before November 1993).

1980s

Japan's quotas also drop. From 490 items under quota in 1962, Japan had

only twenty-seven things under quota in the mid-1980s, and that number drop

again late in the decade to twenty-two with proceed agreements planned to

come into result in the early 1990s, which would reduce the number again.

But those products unmoving under quota prove to be highly visible and were

the object of complaint by exporting countries. The drop of controlled things in

the late 1980s resulted from Japan's loss of a GATT case brought by the

United States regarding import limitations on twelve agricultural products. In

adding, heavy weight from the United States led to an agreement that Japan

would end import quotas on beef and citrus fruit in 1991.

108

1990s to 2010

The stop working of the Japanese asset price bubble in the early 1990s and

the following Lost Decade helped matters. Discount markets opened the

sharing chains, and several company turned to foreign trade and investment

to avoid losses and even insolvency. Products of Japanese companies that

were manufactured in South-Asian countries were reimported at lesser prices.

The Japanese consumer also changed: Economic problems forced many

Japanese to look for cheap prices first and care about national pride or better

quality later.

Most popular companies in Gujarat

INDO NISSIN FOODS LIMITED

Indo Nissin Foods, the manufacturers of the internationally popular Brands of

Instant Noodles, 'Top Ramen' and 'Cup Noodles' was established in India with

the financial and technical collaboration of Nissin Food Products Company

Limited, Japan, a 3 Billion US $ Company which has based its growth on

anticipating and meeting consumer needs since it created the instant noodle

market in 1958.

Indo Nissin formulated the 'Smooth Noodles' - Smoodles, which has become

a catch phrase with the youth. It has its production facilities in Haryana from

where it rolls out Top Ramen in stylishly packed, four out-of-the-world flavors -

Masala, Chicken, Tomato and Curry and Cup Noodles in Spicy Veg, Tangy

Chicken and Mast Masala flavors.

Indo Nissin Foods Limited, a subsidiary of Nissin Food Products Company

Limited, Japan, was incorporated in 1988 and is committed to developing

brands that communicate the wholesome taste, satisfaction and FUN of

instant noodles along with food safety and customerenjoyment.

It is 50 years since we pioneered Instant noodles, but our eyes are still set on

the future, wondering what will be the next new product, and the next, and the

one after that.

Panasonic Energy India Company Limited

Vadodara, Gujarat Product

Dry Battery

Panasonic eyes 70% growth in state

Consumer durables major Panasonic India is eyeing a turnover of Rs 500

crore from Gujarat this financial year, which would be a growth of

over last fiscal.

The company’s subsidiary Panasonic India Ltd is confident of doubling sales

turnover this fiscal to Rs 4,500 crore from Rs 2,200 crore last year and

gaining market shares in key categories that it is present in, Daizo Ito,

executiveWork force: -

Turnover: Panasonic India registered sales of Rs 5,500 crore (USD 1042

million) in FY 2011 and an estimated turnover of Rs 10,000 crores (USD 1940

million) in FY 2012. The company has recently invested USD

the country to set up an R&D and manufacturing facility and on various

marketing initiatives.

Maruti Suzuki India Limited

Type Public

Traded as BSE: 532500

NSE: MARUTI

BSE SENSEX Constituent

Industry Automotive

Predecessor(s) Maruti

Founded 1981

Headquarters New Delhi, India

109

Panasonic Energy India Company Limited

Vadodara, Gujarat Product

Panasonic eyes 70% growth in state


crore from Gujarat this financial year, which would be a growth of



gaining market shares in key categories that it is present in, Daizo Ito,

12650 people in India

Panasonic India registered sales of Rs 5,500 crore (USD 1042


million) in FY 2012. The company has recently invested USD 300 million in


Maruti Suzuki India Limited

532500

MARUTI

BSE SENSEX Constituent

Automotive

Maruti Udyog Limited

New Delhi, India


crore from Gujarat this financial year, which would be a growth of 70 per cent



gaining market shares in key categories that it is present in, Daizo Ito, chief

Panasonic India registered sales of Rs 5,500 crore (USD 1042


300 million in


Key people Shinzo Nakanishi

(CEO & MD)

Products Automobiles

Revenue 37,522 crore (US$6.83 billion) (2010

Net income 2,288 crore (US$416.42 million) (2010

Employees 6,903 (2011)

Parent Suzuki Motor Corporation

Website www.marutisuzuki.com

About Maruti Suzuki

• Maruti Suzuki is India and Nepal

market leader in the car part, both in terms of volume of vehicles sold

and income earned. Awaiting recently, 18.28% of the company was

owned by the Indian government, and 54.2% by Suzuki of Japan. The

BJP-led government

company in June 2003. As of 10 May 2007, the government of India

sold its full share to Indian financial institutions and no longer has any

chance in Maruti Udyog.

• Maruti Udyog Limited (MUL)

the real make commenced in 1983 with the Maruti 800, based on the

Suzuki Alto kei car which at the time was the only modern car on hand

in India, its only competitor

Padmini were both around 25 year

2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti

Suzuki is sell in India and various countries, depending upon export

orders. Models similar to Maruti Suzukis (but not affected by Maruti

Udyog) are sold by Suzuki Motor Corporation and manufactured in

Pakistan and other South Asian countries.

• The company export more than 50,000 cars annually and has an

actually large domestic market in India selling over 730,000 cars

110

Shinzo Nakanishi

(CEO & MD)

Automobiles

37,522 crore (US$6.83 billion) (2010-11

2,288 crore (US$416.42 million) (2010-11

6,903 (2011)

Suzuki Motor Corporation

www.marutisuzuki.com

Maruti Suzuki

Maruti Suzuki is India and Nepal's top automobile producer and the




led government held an initial public offering of 25% of the



chance in Maruti Udyog.

Maruti Udyog Limited (MUL) was establish in February 1981, though



in India, its only competitor- the Hindustan Ambassador and Premier

Padmini were both around 25 years out of date at that point. Through




d by Suzuki Motor Corporation and manufactured in

Pakistan and other South Asian countries.

The company export more than 50,000 cars annually and has an


's top automobile producer and the




held an initial public offering of 25% of the



bruary 1981, though



the Hindustan Ambassador and Premier

s out of date at that point. Through




d by Suzuki Motor Corporation and manufactured in

The company export more than 50,000 cars annually and has an


111

annually. Maruti 800, till 2004, was the India's leading selling solid car

ever since it was launched in 1983. More than a million units of this car

have been sold international so far. now, Maruti Suzuki Alto tops the

sales charts but Maruti Suzuki's speedy has taken over this titles by

19000 models in April 2012.The company imports diesel engines for all

maruti Suzuki cars from the fiat motors the great Italian company.The

German car company Volkswagen has a 19.9% non-controlling

shareholding in Suzuki Motor Corporation.

• To be paid to the large number of Maruti 800s sold in the Indian

market, the term "Maruti" is generally use to refer this solid car model.

Its built-up services are placed at two services Gurgaon and Manesar

south of Delhi. Maruti Suzuki’s Gurgaon facility has an installed

capacity of 900,000 units per annum. The Manesar services, launched

in February 2007 include a vehicle gathering plant with a capacity of

550,000 units per year and a Diesel Engine plant with an annual ability

of 100,000 engines and transmission. Manesar and Gurgaon services

have a combined capability to produce over 14,50,000 units annually.

More than part the cars sell in India are Maruti Suzuki cars. The

company is a supplementary of Suzuki Motor Corporation, Japan,

which own 54.2 per cent of Maruti Suzuki. The rest is owned by public

and financial institutions. It is listed on the Bombay Stock Exchange

and National Stock Exchange of India

Industrial relations

• Since its founding in 1983, Maruti Udyog Limited experienced few

problems with its labour force. The Indian labour it hire readily received

Japanese work culture and the new built-up process. In 1997, there

was a change in ownership, and Maruti became predominantly

government controlled. Shortly thereafter, conflict between the United

Front Government and Suzuki started. Labour unrest started under

management of Indian central government. In 2000, a major industrial

relations issue began and employees of Maruti went on an indefinite

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strike, demanding among other things, major revisions to their wages,

incentives and pensions

• Employees used slowdown in October 2000, to press a revision to their

incentive-linked pay. In parallel, after elections and a new central

government led by NDA alliance, India pursued a disinvestments

policy. Beside with many other government own companies, the new

management planned to sell part of its stake in Maruti Suzuki in a

public contribution. The worker's union oppose this sell-off plan on the

ground that the company will lose a major business benefit of being

subsidised by the Government, and the union has superior safeguard

while the company remains in control of the government.

• The standoff between the union and the management continued

through 2001. The management refused union demands citing

increased competition and lower margins. The central government

prevailed and privatized Maruti in 2002. Suzuki became the majority

owner of Maruti Udyog Limited

• Hansalpur (Gujarat), Aug. 25:

• Japan’s Suzuki Motor Corp (SMC) Chairman Osamu Suzuki today

visited the site here where its subsidiary Maruti Suzuki India plans to

set up a new manufacturing unit at an investment of Rs 4,000 crore.

(Rs. in Million)

Year Net Sales Year Net Sales

2006-07

2007-08

2008-09

1,45,922

1,78,603

2,03,583

2009-10

2010-11

2011-12

3,01,198

3,58,490

3,47,059

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PRESENT TRADE RELATIONS AND BUSINESS

VOLUME OF DIFFERENT PRODUCTS WITH INDIA

TRADE VOLUME OF JAPAN AND INDIA

Chart 1: State wise Japanese Business Establishment in India

114

Chart 2: Volume of world merchandise exports, 1990-2013 Indices, and

1990=100

Figures for 2012 and 2013 are projections. Source: WTO Secretariat

Chart 3: Japan’s Trade in India

Source: http://www.icrier.org/pdf/takahiro_sato.pdf

115

Chart 4: India’s Trade in Japan

Source: http://www.icrier.org/pdf/takahiro_sato.pdf

TRADE RELATIONS

India’s exports to Japan more than doubled from US$2.5 billion in 2005-06

to US$5.2 billion in 2010-11, growing at the average rate of 16 per cent per

annum. However, the share of Japan in India’s global exports shrank from

2.4 per cent in 2005-06 to 2.1 per cent in 2010-11. As a result, Japan

slipped from the 10th

to 12th position in India’s exports over the last five

years. India’s imports from Japan nearly doubled from US$4.1 billion in

2005-06 to US$8.1 billion in 2010-11, with an average rate of growth of 14.9

per cent per year. However, the share of Japan in India’s global imports

declined from 2.7 per cent in 2005-06 to 2.3 per cent in 2010-11.

Consequently, Japan’s position in India’s imports slipped significantly from

the 10th to 16th over the last 5 years.

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Total trade between India and Japan had been low at US$13.3 billion in

2010-11 as against India’s trade with the US at US$43.2 billion and that

with its now, the biggest trade partner, China, at US$59.2 billion. India’s

trade with China recorded an annual average compound growth rate of 27.4

per cent during 2005-96 to 2010-11 against 15.3 per cent for India-Japan

trade and 10 per cent for India-US trade

FOREIGN RELATION OF JAPAN

Japan is the world's 3rd -largest economy and a major economic power both in

Asia and globally. Japan has diplomatic relations with nearly all independent

nations and has been an active member of the United Nations since 1956.

Japanese foreign policy has aimed to promote peace and prosperity for the

Japanese people by working closely with the West and supporting the United

Nations.

In recent years, the Japanese public has shown a substantially greater

awareness of security issues and increasing support for the Self Defense

Forces. This is in part due to the Self Defense Forces' success in disaster

relief, including the 2004 Indian Ocean tsunami; its participation in

peacekeeping operations in Cambodia in the early 1990s and

reconstruction/stabilization efforts in Iraq in 2003-2008; and its response to

Japan’s 2011 Tohoku disaster. However, there are still significant political and

psychological constraints on strengthening Japan's security profile. Although a

military role for Japan in international affairs is highly constrained by its

constitution and government policy, Japanese cooperation with the United

States through the 1960 U.S.-Japan Security Treaty has been important to the

peace and stability of East Asia. In recent years, there have been domestic

discussions about possible reinterpretation or revision of Article 9 of the

Japanese constitution. All postwar Japanese governments have relied on a

close relationship with the United States as the foundation of their foreign

policy and have depended on the Mutual Security Treaty for strategic

protection.

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Japan has pursued a more active foreign policy in recent years, recognizing

the responsibility that accompanies its economic strength, and has expanded

ties with the Middle East, which provides most of its oil. In 2006, Japan's

Ground Self Defense Force completed a successful 2-year mission in Iraq.

The Air Self-Defense Force's (ASDF) airlift support mission in Iraq formally

ended in December 2008. In January 2010, the Diet also ended the Anti-

Terrorism Special Measures Law that allowed for Japan's Maritime Self

Defense Force refueling activities in support of Operation Enduring Freedom

in the Indian Ocean. Since 2009, Japan has been an active partner in

international counter-piracy efforts off the Horn of Africa.

Japan increasingly is active in Africa and Latin America--concluding

negotiations with Mexico, Chile, and Peru on Economic Partnership

Agreements (EPAs)--and has extended significant support to development

projects in both regions. Japan's economic engagement with its neighbors is

increasing, as evidenced by the conclusion of EPAs with Singapore, the

Philippines, Thailand, Malaysia, Indonesia, Brunei, Vietnam, and India.

Chart 5: Growth in volume of world merchandise trade and GDP, 2005-

13 (Annual % change)

Figures for 2012 and 2013 are projections. Source: WTO Secretariat

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Economy

The Japanese economy is one of the third largest in the world. Only the USA

and China have a higher GNP. The Japanese currency is the Yen.

Exports

Japan's main export goods are cars, electronic devices and computers. Most

important trade partners are China and the USA, followed by South Korea,

Taiwan, Hong Kong, Singapore, Thailand and Germany.

Imports

Japan has a surplus in its export/import balance. The most important import

goods are raw materials such as oil, foodstuffs and wood. Major supplier is

China, followed by the USA, Australia, Saudia Arabia, South Korea, Indonesia

and the United Arab Emirates.

Industries

Manufacturing, construction, distribution, real estate, services, and

communication are Japan's major industries today. Agriculture makes up only

about two percent of the GNP. Most important agricultural product is rice.

Resources of raw materials are very limited and the mining industry rather

small.

Economic climate

Japan is currently experiencing an unprecedented period of political and

economic turmoil. The Global Economic Downturn has exposed Japan’s

continuing heavy reliance on export led growth. Net exports and corporate

capital expenditure are sharply down. Domestic consumption is less affected;

however, buoyed also by government stimulus packages, as elsewhere.

The current upheaval, which has mostly been driven by external factors, is

now starting to have far-reaching effects on certain sectors of the

manufacturing economy and society in general. Most affected are the blue-

collar and technical workers, as is common around the globe. This is likely to

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have a significant impact in terms of changes in social values, behavior and

consumption patterns.

The Japanese Government has spent several hundred trillion yen on

economic stimulus packages in an effort to encourage a recovery. However,

the success of these packages is still in doubt as stagnation continues and

Japan’s banks continue to hold large non-performing loans.

Changes that are evidence of the ‘new economy’ emerging in Japanese

business practices include:

• High interest in IT-based solutions

• Demand for innovative cost effective business solutions which can include

imported product and services

• Breakdown of traditional interlinked business relationships

• Introduction of business-to-business (B2B) and business-to-consumer

(B2C) e-commerce ventures

• Speeding up of the business decision making processes

• Introduction of Western management practices

Japan faces a number of challenges going forward, some economic and

some structural. Many of these longer term drivers for change also favor

Australia. Japan’s ongoing reliance on imported minerals and energy, and

growing concerns over food safety and food security (with food self-sufficiency

hovering at around 40 per cent) are priorities for them.

120

TRADE POLICY OF JAPAN

Export policy of Japan

For many years, export promotion was a large issue in Japanese

government policy. Government officials recognized that Japan needed to

import to grow and develop, and it needed to generate exports to pay for

those imports. After 1945, Japan had difficulty exporting enough to pay for its

imports until the mid-1960s, and resulting deficits were the justification for

export promotion programs and import restrictions.

The belief in the need to promote exports is early strong and part of Japan's

self-image as a "processing nation." A processing nation must import raw

materials but is able to pay for the imports by adding value to them and

exporting some of the output. Nations grow stronger economically by moving

up the industrial ladder to produce products with greater value added to the

basic inputs. Rather than letting markets accomplish this movement on their

own, the Japanese government felt the economy should be guided in this

direction through industrial policy.

Japan's methods of promoting exports have taken two paths. The first was to

develop world-class industries that can initially substitute for imports and then

compete in international markets. The second was to provide incentives for

firms to export.

During the first two decades after World War II, export incentives took the

form of a combination of tax relief and government assistance to build export


however, Japan had to drop its major export incentive — the total exemption

of export income from taxes — to comply with IMF procedures. It did maintain

into the 1970s, however, special tax treatment of costs for market

development and export promotion.

Once chronic trade deficits came to an end in the mid-1960s, the need for

export promotion policies diminished. Virtually all export tax incentives were

eliminated over the course of the 1970s. Even JETRO, whose initial function

is to assist smaller firms with overseas marketing, saw its role shift toward

import promotion and other activities? In the 1980s, Japan continued to use

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industrial policy to promote the growth of new, more sophisticated industries,

but direct export promotion measures were no longer part of the policy

package.

The 1970s and 1980s saw the emergence of policies to restrain exports in

certain industries. The great success of some Japanese export industries

created a backlash in other countries, either because of their success per se

or because of allegations of unfair competitive practices. Under General

Agreement on Tariffs and Trade (GATT) guidelines, nations have been

reluctant to raise tariffs or impose import quotas. Quotas violate the

guidelines, and raising tariffs goes against the general trend among industrial

nations. Instead, they have resorted to convincing the exporting country to

"voluntarily" restrain exports of the offending product. In the 1980s, Japan was

quite willing to carry out such export restraints. Among Japan's exports to

the United States, steel, color television sets, and automobiles all were

subject to such restraints at various times.

Import policy of Japan

Postwar era

Japan began the postwar period with heavy import barriers. Virtually all

products were subject to government quotas, many faced high tariffs,

and MITI had authority over the allocation of the foreign exchange that

companies needed to pay for any import. These policies were justified at the

time by the weakened position of Japanese industry and the country's chronic

trade deficits.

The main impetus for change throughout has been international obligation

that is, response to foreign, rather than domestic, and pressure. The result

has been a lengthy, reluctant process of reducing barriers, which has

frustrated many of Japan's trading partners.

Japan has been a participant in the major rounds of tariff cutting negotiations

under the GATT framework — the Kennedy Round completed in 1967,

the Tokyo Round completed in 1979, and the Uruguay Round completed in

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1993. As a result of these agreements, tariffs in Japan fell to a low level on

average. Upon complete implementation of the Tokyo Round agreement,

Japan had the lowest average tariff level among industrial countries—2.5

percent, compared with 4.2 percent for the United States and 4.6 percent for

the European Union (known as the European Community before November

1993).

1990s to 2010

The collapse of the Japanese asset price bubble in the early 1990s and the

following Lost Decade helped matters. Discount markets opened the

distribution chains, and several companies turned to foreign trade and

investment to avoid losses and even bankruptcy. Products of Japanese

companies that were manufactured in South-Asian countries were imported at

lower prices. The Japanese consumer also changed Economic problems

forced many Japanese to look for cheap prices firs and care about national

pride or superior quality later.

JAPAN-INDIA TRADE IN GOODS

Table 1: Japan's Merchandise Trade with India

( Percentage Share)

Year Export Imports

2004 0.5 0.6

2005 0.6 0.6

2006 0.7 0.7

2007 0.9 0.7

2008 1.0 0.7

2009 1.1 0.7

2010 1.2 0.8

Source: JETRO (Japan External Trade Organization).

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Bilateral Trade

In 2007-08, Japan ranked third amongst India’s trading partners.

Bilateral trade between Japan and India has been rising steadily since 2003.

From $4.37 billion in2003-04, it raised to $6.5 billion in 2005-06, $7.45 billion

in 2006-07 and to $10.17billion in 2007-08. The growth rate during this five-

year period was 35.56 per cent. The Confederation of Indian Industry (CII)

estimates that the trade volume could touch $15 billion by 2010 if issues like

trade facilitation and non-tariff barriers were addressed.

Exports

Exports from India to Japan touched $3.85 billion in 2007-08, an increase of

34.73per cent over the $2.86 billion registered in 2006-07. In the first quarter

of the Indian fiscal year 2008, India exported goods worth $786.10 million.

India’s exports to Japan consist largely of raw materials, minerals such as

raw iron ore, agricultural products, marine products, pearls, semi-precious

stones and imitation jewelry. In 2007- 08, Japan imported $1276.24 million

worth of minerals from India, an increase of185.883per cent from 2006-07.

This was followed by $451 million worth of natural pearls, semi-precious

stones and imitation jewelry. Other items exported to Japan include

agricultural products, handicrafts, cotton, carpets, leather garments and

goods, fresh fruits/juices and dried fruits, spices and herbs. Japan is also the

largest importer of Indian shrimps .In an attempt to boost exports of organic

products to Japan, the Agricultural and Processed Food Products Export

Development Authority (APEDA) has suggested that the Japanese

government accord equal status to Indian certification agencies. The step will

go a long way in reducing the cost of these products in the Japanese market.

At present, the prices of products exported to Japan are significantly high ET

that hose exported to other countries. This is because the cost of certification

by Japanese agencies is much higher than that charged by Indian agencies.

Once Indian agencies get equivalence of standards and certification with

their Japanese counterparts, the former, accredited by APEDA, can certify

organic products. Organic products that are exported by India include

basmati rice, honey, spices, tea, garments and some dry fruits.

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Chart 6: Quarterly World exports of manufactured goods by product,

2008Q1-2011Q4 Year-on-year % change

Source: WTO Secretariats estimates based on mirror data for available reporters in the

Global Trade Atlas database, Global Trade Information Systems.

Imports

According to data provided by the Indian commerce ministry, India’s import

from Japan were worth $6.32 billion in 2007–08, up by 37.70 per cent from

the 2006-07 level of $4.59 billion. For the period April to June 2008, imports

from Japan were worth $2.196 billion. India’s imports from Japan have been

increasing because of the rising import volumes of commodities like heavy

machinery, iron and steel, mineral fuels and mineral oils, surgical equipment,

organic chemicals, plastic, rubber etc.

India imported $2.17 billion worth of heavy machinery from Japan in 2007-

08Thiswas followed by $814 million worth of electrical machinery and

equipment. The figure below presents India’s trade with Japan from 2000-

2007. India's Exports to Japan India's Imports from Japan

Source: CMIE, India Trades

125

STATE WISE BUSINESS VOLUME OF JAPAN

Table 2: Location wise business establishment of Japan in India

126

JAPAN'S EXPORTS TO INDIA

JAPAN'S IMPORTS FROM INDIA

Overview of Japan’s FDI At the end of 2007, Japan’s overseas investments

stood at $543 billion1, up from $450billion at the end of 2006 and $387 billion

at the end of 2005. Japan’s outward FDI stock at the end of 2007 accounted

for 3.5 per cent of the world’s outward FDI stock and 4.2 per cent of the

outward stock of developed countries. The inward FDI stock values were

$100.3 billion at the end of 2005, $97.3 billion at the end of 2004 and$89.8

billion at the end of 2003. In 2007, the inward FDI stock of Japan stood at

$132billion.FDI outflows from Japan have risen consistently, especially during

2005-2007. In2005, FDI outflows stood at $457 billion; it increased to $502

billion in 2006 and further to $736 billion in 2007. Hence, Japan ranked high

on the outward FDI performance index with a rank of 44 in 2007. In terms of

the inward performance index, however, it ranked a low 135.In 2006 and

2007, there was a surge in FDI flows into Japan, reflecting a revival of interest

in the Japanese economy. Investment inflows into Japan rose from $2.8billion

in 2005 to $6.5 billion in 2006 and further to $22.5 billion in 2007. However,

the story is vastly different in 2008 and 2009 because of the global economic

crisis and Japan’s descent once again into a major recession.

Chart 7: Real GDP growth and trade of euro area economics, 2008-11

Annualized % change over previous quarter

Source: OECD Quarterly national accounts.

127

JAPANESE INVESTMENT IN INDIA

With growing economic strength, India has adapted its foreign policy to

increase its global influence. Consequently, Indo-Japanese relations have

under paradigm shift and there is now an ongoing effort to build a strategic

and global partnership between the two countries. According to a survey

conducted by the Japan Bank for International Co-operation (JBIC) in 20082,

India has become the most favored investment destination for long term

Japanese investments.

In the portion of the survey dealing with promising countries (including

quantifications of countries viewed as promising for business expansion),

China maintained the top position, but the number of companies viewing

China as promising is declining. On the other hand, more companies are

viewing India, Russia, Brazil, and other emerging countries as promising.

The number of companies that view India as promising has increased to a

level on par with China.

The “growth potential of the local market” was listed as the top reason for

India being a promising destination, a response revealing the hopes placed

on the future growth of the Indian market. Listed third is the presence of

“qualified human resources”, for which India got relatively higher marks than

other countries. The biggest issue for India remains its “underdeveloped

infrastructure”. Infrastructural improvements are believed to be making

progress, but the demands of companies seeking to make forays into India

also appear to be on the rise. India’s robust economic growth in recent years

has not gone unnoticed in Japan.

Japan is now the sixth-largest FDI investor in to India. Cumulative FDI

inflows from Japan touched $2,324 million during 2000-08. This includes

investments in acquisition of existing shares, RBI’s NRI schemes, stocks

swapped and advance pending issue of shares etc. Though Japan has

remained one of the top ten investors into India since the 1990’s, its

contribution to India’s FDI inflow was only 4.29 per cent of total FDI inflows

between 1991 and 2007. Investment volumes have also fluctuated. FDI

128

inflows from Japan increased during 2000-2002 but declined thereafter until

2006, only to rise again in 2007.

Japanese FDI in India

Japan’s foreign direct investment (FDI) into India had been low till very

recently with the cumulative FDI inflows from Japan during the ten-year

period from April 2000 to March 2010 at just US$3.7 billion. This constituted

just 3.4 per cent of total FDI inflows India received during that period and

Japan’s ranking had been 7th in this regard. A significant change happened

since then with the cumulative FDI inflows from Japan shooting up to 7.1

billion by September 2011. With this, Japan’s share in cumulative FDI inflows

to India during April 2000 to September 2011 jumped to 4.8 per cent and

Japan’s rank improved to the 5th position2. This may be compared to

Singapore, which is now the second largest foreign direct investor in India

with a share of over 10 per cent during April 2000 to September 2011.

Although South Korean companies like Hyundai, LG and Samsung have

made their high-profile presence in India, the share of South Korea in the

cumulative FDI inflows to India had been below one per cent till September

2011.

129

Table3 : FDI Flows with Respect to Japan, China and India ( 1990-2010)

1990 1995 2000 2005 2006 2007 2008 2009 2010

FDI Inflows (US$ Million)

Japan 1 806 41 8 323 2 775 - 6 507 22 550 24 426 11 939 - 1 251

China 3 487 37 521 40 715 72 406 72 715 83 521 108 312 95 000 105 735

India 237 2 151 3 588 7 622 20 328 25 350 42 546 35 649 24 640

FDI Inflows as a percentage of gross fixed capital

formation

Japan 0.2 0.0 0.7 0.3 - 0.6 2.2 2.1 1.1 - 0.1

China 3.5 15.0 10.0 7.7 6.4 6.0 5.8 4.3 4.1

India 0.3 2.2 3.3 2.9 6.6 6.2 9.7 8.2 4.5

Source: UNCTAD.

Chart 8: FDI inflow and outflow Chart 9: FDI inflow and outflow

130

INDIA-JAPAN RELATIONS: A PARTNERSHIP FOR

PEACE AND PROSPERITY

In 1949, Prime Minister Jawaharlal Nehru donated an Indian elephant named

Indira to the Ueno Zoo in Tokyo. He hoped that Indira would bring joy into the

lives of Japanese children, still suffering from the after math of World War II.

That gesture is typical of the exchanges between these two Asian nations.

Because India’s and Japan’s relationship faces no structural impediments,

their interactions are generally marked by goodwill. From 2000 on, the two

countries have come closer together, and their ties have expanded beyond

economics to security. A close India-Japan link could affect the strategic

configuration of Asia, provided the two countries overcome the bureaucratic

and political factors that still inhibit their relationship. Expanding Economic

Cooperation: Until the early 1990s, economic relations between India and

Japan revolved primarily around aid. The focus of the bilateral relationship

began to expand after 2000. Aid remained a central component of the

relationship, however, with India becoming the largest beneficiary of

development loans from Japan in 2003. Between 2005 and 2006, India

received approximately $1.5 billion dollars from Japan to improve

infrastructure and eradicate poverty. In June 2006, the Japanese and Indian

governments released a report of the India-Japan joint study group that

encouraged comprehensive economic cooperation, including increasing trade

and investment flows. The report’s release signified the expansion of the

bilateral economic relationship beyond official development assistance and

aid. 2007 was India-Japan friendship year, with 120 trade events and a

40percent increase in Japanese foreign direct investment in India.

Infrastructure and Industry: India views a strengthened economic relationship

with Japan as a way to increase investment in its infrastructure. In the next few

years, India needs to invest at least $300 billion in its infrastructure to sustain

its high growth rates. Without this investment, the nation will be unable to lift a

third of its population out of poverty. The governments of Japan and India

have successfully partnered on infrastructure projects in the past. The Delhi

Metro, their best-known, recent project, stunned Indians grown cynical about

publicly financed infrastructure by finishing on time and on budget. Japan

131

views economic cooperation with India as an opportunity to diversify its

commercial relations beyond those concentrated in China and the United

States. A nation with a rapidly aging population, Japan can use investments in

India to benefit from India’s highly educated and growing workforce. Japanese

officials have also expressed admiration for India’s IT, pharmaceutical, and

biotech industries. Tokyo has pledged to provide Delhi with a soft loan of $4.5

billion to fund the first leg of the Delhi-Mumbai railway freight corridor, which

will connect India's northern states with ports in the country's west. It also

committed to supporting the rest of the corridor, which if completed would cost

$90 billion and span six states. The Japanese government has also promised

to encourage five Japanese companies to set up industrial bases along the

corridor. The recent economic crisis has slowed the project and created talk of

Japan revising its financial commitments downward. However, the rapid

construction of the freight corridor would enhance India’s manufacturing

industry while creating a real and enduring foundation for the India-Japan

economic partnership. Private Sector Ventures: Beyond government

initiatives, the India-Japan bilateral economic relationship is being enhanced

by the integration of the nations’ private sectors. Japanese companies have

made substantial investments in Indian industry. Mitsubishi financed a

petrochemical plant in Haldia (near Calcutta). In June 2008, Japanese

pharmaceutical company was due mainly to: increase substantial investments

in Indian industry. Mitsubishi financed a petrochemical plant in Haldia (near

Calcutta). In June 2008, Japanese pharmaceutical company Daiichi Sankyo

bought a 34.8 percent controlling stake in India’s largest pharmaceutical firm,

Ranbaxy Laboratories. A few months later, Japanese telecom giant NTT Do

Como bought a 26 percent stake in Tata Teleservices Ltd. (TTSL).The flagship

Japanese investment in India is stilcar manufacturer Maruti-Suzuki, which is

celebrating its 25th year in India. The company sells one of every two cars

sold in India, exemplifying the success of Japanese investors in India. More

than 80 percent of Japanese companies in India are profitable and more than

90 percent have expansion plans. According to Japanese embassy figures,

the number of Japanese companies operating in India has increased from 260

to 560 over the last two years. The Japan Bank of International Cooperation

(JBIC) recently listed India as the number one country for strategic long-term.

132

CONCLUSION

The Global Country Research Report titled on “Different Aspects of Japan”

is carried out to study it and also to know the business growth and

opportunities for India with Japan.

The supportive data is the collection which covers the different systems of

Japan like demographic profile, Pestal analysis, different economic sectors,

overview of Industry, trade & commerce, economic overview, business

overview, trade level and the trade relation & business volume of different

product with Gujarat.

From the demographic profile of Japan it has been known their population,

sex ratio, education level, unemployment rate, age wise distribution of

population, religions, languages and household pattern.

From the political profile, Japan's constitution became effective on May 3,

1947 and the legal system is strict as the prime minister has the authority to

appoint and dismiss the ministers of the states. In 2011 Japan stood third

largest economy of the world. It has also been concluded that Japan uses the

latest technology like the robotics technology used in industries and for

educational purpose and well known for the electronics in the world.

The environment of Japan in organizations is strict & hierarchical,

interdependent, participative management, long-term planning, vertical

society, private decision making. The primary agriculture sector of Japan is

formed of farming, foresting and fly-fishing. The GDP of manufacturing in

2010 was 19.47%.

From this study the import & export prohibition and the role of government in

the trade & commerce has also been known. The Economy of Japan in the

last quarter of 2010 went down and before the earthquake in 2011 it had an

emerging economy.

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A large number of Japanese companies have evinced interest in coming to

Gujarat. There are many companies in the Gujarat and have trade relations

with the Japanese companies, which prove to be beneficial to Gujarat as well

as to India. There are many scopes for Japanese companies in Gujarat

market.

It has also been concluded that in the 22 states of India, Japan has

established its business which shows the present trade relation & business

volume of Japanese product with India as well as with Gujarat.

Japan is the sixth largest FDI investor in India. The relation of Japan & India is

the partnership for peace & prosperity.