India most attractive destination for Japan in coming decade

Tokyo: India has overtaken China as the most attractive overseas investment destination for Japanese manufacturers over the next decade amid increased labour costs in China, according to a survey, though in the shorter three term period China still holds the advantage.

In the three year window China retained the top spot which it has held since the fiscal of 1992, when the state-backed financial institution began conducting the survey by the Japan Bank for International Cooperation.

But the survey, conducted last summer, also showed that 47 per cent of the responding companies harboured concerns about risks related to investment in China, such as fallout from diplomatic tensions and labour disputes.

A recent flare-up over the disputed Senkaku Islands and a concerted move to organise labour strikes against Japanese firms operating on the Chinese mainland as also restricted exports of Chinese rare earth materials, all have had their impact on the respondents.

Vietnam ranked third on the list behind China and India, with this sequence of the top three investment destinations remaining constant for the fifth straight year.

Thailand, Brazil and Indonesia ranked 4th, 5th and 6th, respectively.