Japanese firms thinking of taking the plunge face entrenched domestic and foreign-affiliated players in key markets. Moreover, local firms can put up quite a fight in court against potential foreign competitors. YKK Corp., for one, is proceeding with plans for a zipper plant despite numerous court cases filed by Indian competitors. Brownouts and blackouts are common even in major urban areas. Telecommunications options are limited and rates very high, making such now vital tools as Internet access expensive and unreliable.
Infrastructure is one of the areas that New Delhi is opening up to foreign investment.
Energy is a particularly active sector at the moment, but many experts anticipate a rush of foreign telecommunications companies to take advantage of new reforms in this field. Even when a foreign firm has gotten its foot in the door, it still faces a mind-boggling amount of government red tape. Engaged in their own efforts to reform a powerful and entrenched bureaucracy, Japanese leaders can sympathize with their Indian counterparts as New Delhi tries to limit the hand of bureaucrats. In terms of tariffs and import regulations, Japan is not alone in pushing New Delhi for changes. India faces pressure from the United States and the European Union on meeting its World Trade Organization obligations to phase out many import restrictions and reduce import tariffs.