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The Rediff Business Special/ Investing in south India

Japanese investors find a new home in Tamil Nadu

Shobha Warrier in Madras

"Yes, I miss Japan. Won't you, if you had been in my position? I miss the Japanese food too," N Yamauchi said nostalgically. He has been in Madras for the last 15 years, exporting seafood to Japan.

In 1995, Yamauchi set up a Japanese food restaurant in Madras, to cater to the increasing number of visiting Japanese to Tamil Nadu in general, and Madras in particular.

He teamed up with his long-time interpreter Revathi Nagaswami and created an "exclusive, authentic Japanese restaurant" called Dahlia. "Yamauchi didn't want to go back to Japan because of his business. But food was a main problem for him. He figured out food was a problem for others too," Revathi recalls. In the beginning, there were 30 customers a day. The figure has since swelled to 120.

Dahlia is a microcosm of Japan. Spoons, plates, table cloth, pictures… everything inside Dahlia contributes to the distinct Japanese ambience.

"Visitors feel at home here," says Revathi. Does that in any way help visiting businessmen? "We do not ask them anything as the Japanese do not like to talk to strangers, they do not like to discuss their business either. They -- the Japanese and other tourists -- come here to relax and enjoy the food. They just want to feel at home and they tell us that we have succeeded in making them happy."

No nostalgic talk with fellow Japanese Yamauchi either. "The sight of my countrymen makes me happy, no doubt. Still I do not talk to my customers anything other than the food," he says.

Yamauchi says the influx of the Japanese into Tamil Nadu has increased in recent times, though the business interaction between Japan and India started way back in the Sixties. Till recently, it was either Delhi or Bombay or Bangalore which attracted the Japanese.

The Tamil Nadu government's publicity campaign about its business friendly policies, uninterrupted power supply, infrastructure facilities and hassle-free labour seems to attract the Japanese.

Prof Krishnaswamy, secretary-general of the Indo-Japan Centre in Madras, is a keen observer of the Japanese, their business practices, likes and dislikes. He has been with the Japanese consulate as the economic and business advisor to the Japanese businessmen for 30 years. "The Americans and the British take decisions very fast. But the Japanese are very slow and cautious. They study the minutest details of a project. Sometimes it takes even years for them to decide, but when they do it, it's always a big decision." Sony, Krishnaswamy recalls, took five years to set up its R&D centre in Bangalore.

But once Sony set up a centre in Bangalore, others like Toyota followed, though the latter was not very happy with the frequent power cuts and lack of infrastructure facilities.

Talking of Bangalore, Yamauchi and Revathi opened their second branch there recently. "We expect a boom after Toyota starts its operations in full swing," says Yamauchi.

Bangalore, and now Madras... do the Japanese love south India? Krishnaswamy says Kerala scares them. Toshiba's "labour pains" in "God's own country" has made the Japanese somewhat cautious about Kerala. Krishnaswami often persuades the Japanese to look at the Keralites' calibre, the sylvan surroundings, the software potential…. But the Japanese remain unconvinced.

Tamil Nadu by far remains the MNC's favourite Indian destination, though Toyota chose Bangalore. Ford, Mitsubishi and Hyundai have set up shop in the state. This is expected to enhance Tamil Nadu's appeal. Between 1970 and 1992, 25 Japanese companies were set up in Tamil Nadu. During the last six years, nearly 30 companies decided to set up ventures.

Countless Japanese delegations visited the state over the years. They interact with the top business persons. However, chairmen of big corporations like Sony and Toshiba prefer to meet with people like Krishnaswamy. Krishnaswamy had interacted with almost all of them. He outlines the sample of the queries he gets: Do you have a Japanese restaurant here? Can we import Japanese food easily? What are the customs rules? Have you got good schools? What about night life and security? Do we get good houses?

But when it comes to work, they are the best, he says. The Rs 3.5 billion Mitsubishi Lancer project, the biggest one in Tamil Nadu, was set up in Thiruvallur, and within the first year, the first Lancer rolled out of the plant.

Mitsubishi is also setting up an elevator project in Madras and several power projects elsewhere. Fujikura's optic fibre cable project, Matsushita's air-conditioner project, Citizen's watch project are some of the major Japanese projects in Tamil Nadu. Refrigeration, electronics, electricals, chemicals, automobiles and pharmaceuticals are some the sectors that the Japanese seek to enter.

Krishnaswami believes that if yesterday belonged to Karnataka, today belongs to Tamil Nadu, and tomorrow, probably to Andhra Pradesh, given Chief Minister Chandrababu Naidu's relentless campaign for foreign investments. He says Tamil Nadu politicians can learn a thing or two from Naidu on promotion of a state as an investment destination.

"But the Japanese who have come here are very happy with everything. They have no complaints except that there is no night life in Madras!"

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