India growth story to benefit Japan's firms, says Nomura

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Key Points

Japan's FDI in India has been gaining a growing presence, and Japanese investments in foreign equities (as of end-2022) showed India at the top of the list for developing countries although trade ties between Japan and India are currently weak..

Japanese individual investors are also investing more aggressively in Indian stocks by way of investment trusts India at the top of the list among emerging market economies, the report said.. With the Indian economy maintaining high growth, Japanese corporations are showing more interest regarding investment in India, according to Nomura..

In the ranking of countries seen as promising for the medium term in the Japan Bank for International Cooperation (JBIC)'s FY23 Survey on Overseas Business Operations by Japanese Manufacturing Companies, India took the top spot for a second consecutive year, even as China fell to number three the report, an collaborative effort by Indias and Japans economists and equity strategists...

Quoting a Bloomberg report of February 2, Nomura said that it is estimated that Japanese investors' Indian equity holdings stood at 2,868.5bn (around $20.3bn) as of end-2023, up 815.2bn (around $4.8bn) versus the end-2022 figure of 2,053.3bn (around $15.6bn)...

Inflows of funds from Japanese individual investors to Indian equities via investment trusts regained momentum at the beginning of 2024 and remain at a high level, although they have started to correct recently..