According to reports from The Times of India, Sandeep Sikka, MD & CEO of Nippon Life India Asset Management Company and newly re-elected AMFI president, participated in a 200-member business delegation that accompanied commerce & industry minister Piyush Goyal to Japan last week. Sikka argues that there will be a rush of investments from Japan, with FDI translating into higher portfolio flows as retail investors also join the investment trend.
As reported by The Times of India, Sikka emphasizes that the relationship between India and Japan is only getting better, with both countries having different strengths. India has scale, talent and growth, while Japan has capital and technology. The conversation has shifted from why invest in India to how much more to invest, with internal discussions in Japanese boards moving from assembling in India for local markets to making in India and making for the world.
According to the report, Japan has a savings pool of $14 trillion, of which half is in bank accounts. Of the asset management money of $2.2 trillion, one-third, which is around $800 billion, is invested overseas and India gets around 1% of that. Sikka notes that more household money will come to India through initiatives like NISA, where the Japanese government is trying to encourage more overseas investment.
As reported by The Times of India, India-focused funds in Japan have shown significant growth from $6.7 billion in 2016 to $9.7 billion in 2021 and $19.6 billion in 2026. Sikka highlights that India is world's fastest growing economy and offers tremendous returns, with the investment pattern typically starting with FDI, followed by FPI and then retail participation.
According to the report, Sikka addresses concerns about predictable policies and repatriation of profits, noting that there is a lot of political and policy certainty in India now since Mr Modi became PM. He emphasizes that Japan has seen five or six PMs in the same period, highlighting India's political stability. The sentiment among foreign portfolio investors was described as very strong during recent roundtables.
