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Indian States Urged to Boost East Asian Investments for Economic Growth

A new report calls for Indian central and state governments to jointly strengthen economic linkages with ASEAN and East Asian nations. It highlights Vietnam's VinGroup pledging a massive $8.5 billion investment in Maharashtra for sustainable development. Japan has established a new government division to facilitate further investment, acknowledging current levels are below potential. State governments are seen as crucial for attracting and channeling these foreign investments to unlock greater economic growth.

Key Points: Indian States Can Accelerate East Asian Investment: Report

  • Vietnam's VinGroup invests $8.5B in Maharashtra
  • Japan forms new division to boost India investment
  • States key to unlocking ASEAN economic ties
  • Gujarat signs deal for Indo-Taiwan Industrial Park
2 min read

Indian states can accelerate investment flow from East Asian nations: Report

Report urges Indian states to boost economic ties with ASEAN, Japan, and South Korea, highlighting major investments and untapped potential.

"both sides realise that it is well below the actual potential - Modern Diplomacy report"

New Delhi, April 18

As the world economic order changes rapidly amid the West Asia crisis, central government and state governments in India should work jointly for giving a strong push to economic linkages between India and ASEAN countries, as well as East Asian nations, according to a new report in Modern Diplomacy.

The report highlights that several Asian countries, such as Japan, Singapore, and South Korea, which already have a strong presence in India, are also exploring opportunities in states whose potential has been untapped so far.

Recently, Vietnam's VinGroup pledged an investment of nearly $8.5 billion (Rs 71,000 crore) in Maharashtra. The investment will focus on sustainable urban development, industrial and tourism growth, renewable energy, and electric mobility.

State Chief Minister Devendra Fadnavis expressed confidence that the partnership would catalyse green energy, modern infrastructure, and dynamic transport systems across the state. He also added that a world-class, eco-friendly smart residential township on 2,700 acres will be developed, which houses a population of nearly 200,000 people.

In 2024-2025, Maharashtra accounted for 39 per cent of India's total FDI flows.

Also, Japan's Ministry of Foreign Affairs has established a new Japan-India Economic Affairs Division to help Japanese companies invest in India, as part of its strategy to bolster bilateral economic ties.

Through the establishment of the Japan-India Economic Affairs Division, the Ministry of Foreign Affairs of Japan will further make public-private efforts to promote companies' expansion of business and investment from Japan to India and to deepen cooperation in the area of economic security with India.

Given India's high rate of economic growth, the importance of economic cooperation in Japan-India relations is growing day by day, according to the Indian government.

According to the Modern Diplomacy report, while Japan has invested over $40 billion ($43 billion) in India ever since 2000, "both sides realise that it is well below the actual potential".

As per estimates, 1,400 Japanese companies operate across India. Japan already has a significant presence in several states, including Haryana, Rajasthan, Tamil Nadu, Karnataka, and Gujarat.

Moreover, Gujarat this month signed an agreement with Taiwan-linked Allegiance International Company Ltd. to develop an Indo-Taiwan Industrial Park in the Sanand-Dholera economic corridor in the state.

According to the report, India should continue to focus on further bolstering economic ties with ASEAN nations as well as South Korea and Japan, and state governments have an important role to play in this regard.

- IANS

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Reader Comments

R
Rohit P
Good report, but I hope this investment push reaches beyond the usual states like Maharashtra, Gujarat, and Tamil Nadu. What about Bihar, Odisha, or the North-East? True development means spreading opportunities across the entire country.
A
Aditya G
The Japan-India Economic Affairs Division is a smart move. Japanese companies bring not just capital, but also world-class technology and a long-term vision. Hope this leads to more manufacturing and skill development for our youth.
S
Sarah B
The focus on sustainable urban development and renewable energy in the VinGroup deal is crucial. As we attract investment, we must ensure it's green and benefits local communities, not just creates concrete jungles.
K
Karthik V
Centre-state coordination is key. Sometimes state governments change and policies get disrupted, which scares foreign investors. We need a stable, long-term framework that survives political cycles.
M
Michael C
The report says $40 billion from Japan is "below potential" – that's an understatement! Given our size and growth, we should be aiming for multiples of that. Let's make 'Make in India' a reality with these partnerships.
N
Nisha Z
I'm excited about the smart township project. If done right, it can be a model for future urban living in India. But please, ensure affordable housing

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