India in Japan at 60

Business Features - June 24th, 2012

Alok Prasad, Indian ambassador to Japan

“This year, 2012, marks the 60th anniversary of the establishment of diplomatic relations between Japan and India.

The bond between the countries goes back well before that though – centuries in fact. We are two nations brought together by spiritual and cultural ties and I hope we can celebrate the anniversary in a befitting manner.”

Alok Prasad, Indian ambassador to Japan.

The bond that Mr. Prasad tells Weekender about is now stronger than ever, particularly from a business perspective. India used to be seen simply as a poor relation but its miraculous financial growth over the past two decades has changed that. It is now a major economic power and one of the main reasons for that has been their expertise in the software industry. 

Two companies leading the way in this field are Infosys and Tata Consultancy Services (TCS). Weekender recently sat with V. Sriram, Senior Vice President of Infosys and Masahiko Kaji, Chairman at TCS, to talk about India’s growing influence in Japan.

“Ten years ago Japanese people were not aware of India’s potential in IT services, the situation is very different now though.” says Kaji, whose association with India goes back more than 40 years. He is clearly delighted to see the country he regards as his second home becoming more influential in Japan. He believes there are “growing concerns about the security side of doing business with China,” and this is likely to lead Japanese companies to look to other markets.

“After Y2K the world realized the capabilities of Indian IT people, particularly in the US and the UK, where there was a shortage of IT specialists. Recognition here was slower but, after the riots at the Japanese embassy in Beijing in 2005, people started realizing the danger of putting all their eggs in one basket. More companies have started looking further afield in the IT world and they can see that there are a lot of possibilities in India.”

The number of Indian nationals moving to Japan has doubled in the past ten years. Sriram, who arrived before this boom, has noticed a massive change in the way Indians are viewed here.

“When I first came to the country, over 15 years ago, taxi drivers would always ask me what restaurant I worked at. Now they assume I’m in the software industry.”
Skilled engineers are fully appreciated here, Sriram feels, particularly with there being a shortage of outstanding Japanese computer programmers.

“Japan has traditionally been a manufacturing powerhouse. For graduates, the best job is to join a company like Toyota or Honda, not an IT service company. Focus on technology has been more around creating new products as opposed to a service based market.

India’s history is very different. We seemed to leapfrog industrialization straight in to the service economy. After independence in 1991, it was easier to start a business that required ‘intellectual capital.’”

Education was deregulated in India and that led to a proliferation of engineering colleges that moulded elite IT engineers, in stark contrast to Japan. For Tata’s Kaji, “the IT industry has never been very favorable for graduates here and that is why there aren’t many people studying science subjects.”

With IT specialists thin on the ground, Kaji realized the benefits of encouraging more Indians to come to Japan. He felt a “responsibility” to help them settle in the country and the opening of two Indian schools in the area certainly helped. As a director of both schools, Kaji wanted to create an environment in which Indian people were “willing to come to Japan” rather than coming under company orders.

It is not just Indian children attending these schools. According to Infosys’s Sriram “More Japanese parents are sending their kids there because there is a feeling that Indian academic standards are pretty high, especially in maths and science. They are also starting to appreciate the need to globalize early.”

The changing economy is forcing domestic companies to rethink their strategies and look abroad. Kaji points to TCS’s recent joint venture with Mitsubishi Corporation as an example of this.

“Taking that first step with an Indian vendor is not easy for Japanese companies and we want to help them in to the global market with an interface that is familiar to them. Half-measures are not good though. Having a small pilot in India and then doing 90% of your business in Japan is not where the benefits come from.”

It is not a one way road though. As well as Japan utilizing India’s knowledge of the software industry, India should be making the most of Japan’s expertise in hardware and infrastructure. As Sriram puts it, “we need each other,” and it would seem that now, with a relationship that dates back more than 60 years, both countries are finally starting to realize that.

Interviews by Ray Pedersen (Written by Matthew Holmes)