A monthly Trade and Investment Bulletin of Corporate Professionals for Indo- Japan Business Community.

1. Indo-Japan Trade & Investment
Bulletin
November Issue
Japan Desk, Corporate Professionals
2012

2. INDEX
Indo-Japan Trade & Investment Highlights
 Third Round of India-Japan-US Trilateral Dialogue Held in New Delhi
 India-Japan Sign the Social-Security Agreement
 Fukuoka-ken Governor Invites Indian Investment as Sister Cities Delhi and Fukuoka
celebrate Fifth Anniversary of Friendship Agreement
 India-Japan Finalise the List of Prospective Projects for Japan’s $4.5 billion Facility for
the Delhi-Mumbai Industrial Corridor (DMIC) Project
 India and Japan Join Hands to End China’s Rare-Earth Monopoly
 INPEX Corporation of Japan Picks up 26% Stake in KG Block
 Suzuki to Make India Its Global Sourcing Hub for Small Cars
 Sony Increases Sourcing of Optical Drives from India
 Omron Healthcare Targets Three-Fold Growth by 2015
 Tata AutoComp Sells Stake in Tata Yazaki AutoComp to JV Partner Yazaki Corp
 Modi Rubbers and Asahi Organic Chemicals form JV to Exploit Resin Coated Sand
(RCS) Market in India
Knowledge Center
 The Security Industry in India

3. Indo-Japan Trade & Investment Highlights
Third Round of India-Japan-US Trilateral Dialogue Held in New Delhi
The third trilateral meeting among the senior officials of India, Japan and the US was held in
New Delhi, where the three countries explored possibilities of working together in the region.
The trilateral has irked China as the senior Japanese officials have said to brief India and US on
the Senkaku/Diaoyu islands. China has blamed Japan for being anxious of economic rise of
China.
The trilateral has been aiming at working to promote economic and trade ties in south-east Asia.
The trilateral is also important as India pushes for the east-west corridor to connect India with
Thailand via Myanmar and further all the way to Vietnam.
India-Japan Sign the Social-Security Agreement
Signing of the much awaited social-security agreement on 16th November,
2012 between India and Japan comes as a big relief for the expatriates
employees. The social security agreement signed by Foreign Minister
Koichiro Genba and Indian Ambassador to Japan Deepa Gopalan Wadhwa
will reduce the dual pension burden on companies and employees. The
Japanese and Indian expatriate employees in the two countries will no
longer be required to pay pension premiums in both the countries. The employees temporarily
dispatched for a period of not more than five years to the other country will only be responsible
to pay premium towards the pension system of the country from which employees are
dispatched.
Fukuoka-ken Governor Invites Indian Investment as Sister Cities Delhi
and Fukuoka celebrate Fifth Anniversary of Friendship Agreement
Fukuoka Prefecture and Delhi have signed agreement to promote co-operation
in the housing, traffic management and improvement in the urban environment
on the occasion of celebration of Fifth anniversary of friendship agreement

4. between the two sister cities. Fukuoka Prefecture’s Governor Hiroshi Ogawa headed the business
delegation of 50 members to India and sought to promote economic, business and cultural ties
between both the cities and invited Indian companies to invest in Fukuoka.
India-Japan Finalise the List of Prospective Projects for Japan’s $4.5 billion Facility for the
Delhi-Mumbai Industrial Corridor (DMIC) Project
The Ministry of Economy, Trade and Industry (METI) and the Ministry of Commerce and
Industry of India have agreed on the list of prospective projects to be financed by $4.5 billion
from Japan for the $9 billion DMIC project.
DMIC is an India-Japan joint development project
that is aimed at building a dedicated freight railway
line to connect Delhi with Mumbai. The project is
not only limited to the dedicated freight railway line
and also includes development of other infrastructure
along the line including industrial areas, power
plants and infrastructure, distribution facilities,
housing and commercial infrastructure.
India and Japan Join Hands to End China’s Rare-Earth Monopoly
India and Japan entered into a Memorandum of Understanding (MoU) 16th November, 2012 to
promote joint-production of rare-earth minerals. Japan plans to start importing approximately
4100 tons of rare earth minerals annually from India to end its reliance on China for the supply
of rare-earth minerals.
Indian government is also exploring the possibilities of partnering with Japan for joint
production of rare-earths in third countries like Kazakhstan to maximise political, diplomatic,
and economic dividends for both India and Japan.
INPEX Corporation of Japan Picks up 26% Stake in KG Block
Japanese oil and gas exploration giant, Inpex Corporation has agreed to acquire a 26 per cent
stake in the KG Block, an offshore Indian exploration block, from ONGC.
The deal is subject to approval of the Indian government. Upon the approval of the Indian
Government, the stake of State owned Indian oil and natural gas exploration leader ONGC will
be reduced to 34 per cent and will continue to serve as the operator of the block.

5. Suzuki to Make India Its Global Sourcing Hub for Small Cars
Suzuki Motor Corporation plans to utilize the expertise of its Indian
subsidiary Maruti Suzuki to make India its small car export hub. The
completion of Maruti Suzuki’s Gujarat plant will kick-off the gradual shift
to making India export hub for entire range of small cars as the exports
from Japan have become uncompetitive because of the appreciation of
Yen. Suzuki is also looking to exploit the benefits of lower wage rates in
the country that has become its second home. Apart from the factors like
appreciating Yen and higher wages, the move is also likely to reduce the
effects on supply and prices caused by factors such as natural disasters.
Sony Increases Sourcing of Optical Drives from India
Sony is banking heavily on Indian optical drive manufacturers as it sources approximately 60%
of its global requirement from India. The Fukushima disaster and floods in Thailand severely hit
Sony’s traditional sources of supply and the company shifted its focus to India to diversify its
supplier base. In August, Sony had announced the plans to exit the business of manufacturing
optical drives, which could mean rise in company’s dependence on India.
Omron Healthcare Targets Three-Fold Growth by 2015
Indian healthcare arm of Japanese conglomerate Omron Corporation, Omron Healthcare India
looks all set to achieve three-fold growth as it targets a $43 million in sales by the year 2015. The
company aims to achieve the desired figures by increasing the number of retail outlets in the
country and by beefing up its product line with new launches.
The healthcare industry in India is said to be growing at the rate of 20% a year, well set to reach
$100 billion industry mark and eventually to $280 billion by the year 2020.
Tata AutoComp Sells Stake in Tata Yazaki AutoComp to JV Partner Yazaki Corp
Tata AutoComp has exited from Tata Yazaki AutoComp, a 50:50 JV between Tata AutoComp
Systems and Yazaki Corporation of Japan, by selling its 50% stake to Yazaki Corporation. The
JV Company was incorporated in 1997 and manufactures wire harness at Pune, Sanand,
Patnagar, Jamshedpur and Bengaluru plants.

6. Modi Rubbers and Asahi Organic Chemicals form JV to Exploit Resin Coated Sand (RCS)
Market in India
India’s Modi Rubbers and Japan’s Asahi Organic Chemicals have joined
hands to manufacture Resin Coated Sand in India. Asahi Organic
Chemicals will hold 51% and rest of 49% will be held by Modi Rubbers in
the JV Company to be formed in the State of Gujarat with the name Asahi
Modi Materials Pvt. Ltd. The JV will see an initial investment of INR 300 million and is likely
to begin operations in January 2014.

7. Knowledge Center
THE SECURITY INDUSTRY OF INDIA
Security is one of the most important issues in any setting, a home, school, hospital, malls, social
gatherings, et al. But it is also one of the most overlooked issues at times. Maslow, a world
famous psychologist known for his hierarchy of needs, brought to paper the thought which
people generally fail to realize. ‘The second most important need after food & shelter is the need
for protection & security. That comes even before the need for love, social esteem and self-
growth. Believe it or not; ask yourself and you’ll know it’s true.’
Though we hardly notice it, security finds a place in the country as a full-blown security industry
which is growing steadily year after year. In fact, it may sometimes be even safe to say that there
are more security guards than the number of policemen today.
The security Industry can broadly be categorized into two categories:
1. The Security Services Segment: This segment covers the private manned security
services i.e. the security guards and dominates the protection industry in India. This
segment is said to have existed since the early 1960s and there are various companies in
this sector like G4S and SIS among others who operate nationwide through their regional
and city offices. This segment happens to be the country’s largest Corporate Tax Payer.
Not only that, it is touted to grow at 40% every year1.
2. The Security Systems Segment: This segment covers security provided through devices
like Alarms, System Integrators, CCTVs, Intrusion detectors, Door Intercoms and Access
Controls. It is majorly an import based sector owing to the technological expertise that
foreign players bring. The security equipment is largely imported from countries like
USA, UK, Germany, Singapore, Italy, Hong Kong, Israel, Japan, Korea, China and
1
Quoting Col. Jagat Trikha, executive director of the Central Association of Private Security Industry (CAPSI)

8. Taiwan. Companies like Siemens, Tyco and Bosch have come to India and by
collaborating with the domestic businesses have been successful in setting up distribution
channels and offering sales & after sales support.
The legal framework regulating Security Agencies:
To improve the benchmarks for private security in the country and to regulate the industry
through a licensing process, Private Security Agencies Regulation Act was enacted in 2005. The
Act sets forth various standards and requirements which need to be fulfilled if a Private security
agency wishes to get licensed. Some of them are:
1. Training before deployment.
2. Owners and major shareholders of the agency to be citizens of India. (Foreign firms are
however allowed to enter into a relationship with domestic ones)
3. Verification of antecedents of the person wishing to start a business in private security.
4. Maintenance of registers containing details of security officials, managers, supervisors,
clients and other such particulars as may be prescribed.
Getting registered as a Private Security Agency
The following simple steps and considerations need to be taken account of, to get registered as a
Private Security Agency:
1. Deciding the name of the business.
Some things that could be ensured about the name are:
i. The name should sound positive
ii. The name should not be difficult to sound or pronounce
iii. The name should be unique from other names in the market
iv. The name should be descriptive of the business activity
2. Choosing you business structure:
Depending on your requirements and comfort, one can choose any of the following forms
of business:
i. Public Company

9. ii. Private Company
iii. Sole proprietorship
iv. Partnership firm
v. Limited liability Partnership Firm (LLP)
3. Registration for Income Tax and other Statutory Authorities i.e. applying for
i. PAN (Permanent Account Number)
ii. TAN (Tax Deduction and Collection Account Number)
4. Registration of Domain Name:
Choosing and registering a domain name is as important as choosing the name for the
business. It’s practically wrong to imagine not having an online presence in this age of
internet.
5. Considering the FDI provisions:
The current FDI policy allows Foreign Investment of up to 49% in the private security
sector. However, one needs to check other requirements also. For example, FDI is
allowed in companies but there are some restrictions as far as the sole proprietorships and
partnership firms are concerned. In LLPs also, FDI is allowed through approval route
only, that too only in industries where 100% FDI is allowed through automatic route.
6. Opening a Current Account with the Bank.
7. Obtaining license under Private Security Agencies (Regulations) Act, 2005.
8. Registration under various Labour laws.
9. Registration under Shops & Establishments Act, 1948.
Especially after the unfortunate terror attacks have hit the country, the security sector of the
country is now a full blown industry. This is more so because people have realized that the value
of human lives and their protection is much more than the meager saving as a result of not
employing any security personnel or system. Seeing the developments in the Security Agency
and considering its perennial nature and an evergreen growth potential, it would not be wrong to
say that it offers huge business opportunities for persons who can see the potential in the sector.

10. CONTACT US
Pankaj Singla MUMBAI:
Japan Desk, Corporate Professionals 403-404, Churchgate Chambers, 5 New Marine
Lines, Mumbai-400020
DELHI (Head Office)
D-28, South Extension Part - I, New Tel: +91 22 22624671
Delhi – 110049 Fax: +91 22 22655712
Email: info@indiacp.com
Tel: +91-11-40622200
Dir: +91-11-40622293
FARIDABAD (DELHI NCR):
Fax: +91-11-40622201
565, Sector-7B, Faridabad, Haryana-121006
Mob:+91-99715-08320
Email: pankaj@indiacp.com
Tel: +91 129 4061130
Fax: +91 129 2241017
Email: info@indiacp.com
Bedford (UK)
2-4 Mill Street, Bedford MK40 3HD U.K.
Tel: +44 (0) 2030063240
Fax: +44 (0) 2030063241
Email: info@indiacp.com
DISCLAIMER: The entire contents of this document have been developed on the basis of relevant statutory provisions and as per the
information available at the time of the preparation. Though the author has made utmost efforts to provide authentic information however, the
material contained in this document does not constitute/substitute professional advice that may be required before acting on any matter. The
document has been produced only for the informational purposes; the author and the firm expressly disclaim all and any liability to any person
who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such
person in reliance upon the contents of this document.