Japanese envoy lists troika of hurdles in India

Rohit Bansal

New Delhi, Nov 27: Japanese envoy Hiroshi Hirabayashi is upset. So much that towards the end of a 45-minute interview, on Prime Minister AB Vajpayee’s forthcoming visit to Tokyo, he says he must stop. He takes a deep breath, pauses, and rambles, “Ask something else...or else I will cross the limits of diplomacy!”

Japanese companies face, what Mr Hirabayashi describes, “a troika of obstacles” in India. Reason, he explains, why “we have some 200 business offices and plants in India, but it remains peanuts compared to what we are doing in China and South East Asia”. This ‘troika of obstacles’ includes, “poor infrastructure, in power, railways, airports..., red tapism among the bureaucracy...and the aggressive stance of (state and Central) tax authorities, who collect money from foreign investors to the extent of producing harassment”.

The envoy says, “good intentions by well wishing (Indian) leaders and your top bureaucrats needs to be translated into concrete measures. So that ground reality comes, and real investment comes. The Central government, starting with (Prime Minister) Mr Vajpayee have started various measures on the obstacles, but I hope they know better the ground reality. I hope they don’t compare India of today, with India of yesteryears, but with other countries, who have unrolled the red carpet”.

The envoy is indicting of Indian taxmen. “I hope the understanding is reached that FDI (foreign direct investment) is like precious ducks, which lay golden eggs. If you squeeze them prematurely, you would lose the geese and the eggs that will be produced”. Elaborating, Mr Hirabayashi argues, “Japanese companies are the most law-abiding citizens. But I have hundreds of stories. For instance, frequent change of tax items. Then, in the course of collecting tax, officers giving troubles”. On whether this amounts to too much complaining, he measures his words. “Our companies are not charitable organisations. Profitability is an issue for them. So is speed of change.

For the last three years now, I have been on these issues constantly. This isn’t just true of Japanese companies. All of us have our headaches. We discuss them in the entire diplomatic community”.

Mr Hirabayashi compliments the intent of industry minister Murasoli Maran. But he gets upset on India’s much talked ‘single window’ for FDI. “ The joke is that India has 40 ‘single windows’for one investor. We (have) let our feelings and frustrations be known to Indian officers and captains of business. It is not easy to be working here”.
On the future, the envoy turns philosophical. “Companies are quitting India. So, we need success stories of Japanese investment. Like Toyota. It is where it is, because of the support of the government of Karnataka. There’s also Andhra. And Haryana too, ever since (chief minister) Mr Chautala travelled to Japan, though only on certain belts like Manesar and Gurgaon. Then there’s UP now, which is being proactive in Greater Noida.”

On India’s suggestion that instead of complaining, Japanese companies may well create their own infrastructure, Mr Hirabayashi argues, “Toyota had deep pockets to create its own park, for suppliers and sub-contractors. But not everyone can do that. So, we hope state governments will create their own parks, and special zones, and provide maximum support on other facilities”.

Finally, what hopes of big bucks flowing in during Mr Vajpayee’s visit? ‘No’ is the message behind the envoy’s diplomatese. “It’s a difficult time to open new frontiers. For now, our companies will take ‘a wait and see policy’. But compare yourself to China. The world-wide recession is only a matter of time. Then our companies will look for new avenues. We never hurry to jump in”.