'AI, Rare Earths Growth Sectors for Japan-India Collaboration'

In an exclusive interview, Sumitomo Mitsui Financial Group CEO Toru Nakashima speaks about his investment plans for India, and the opportunities for the expansion of Japan-India trade and investment

- SALIL PANCHAL

Q What makes India an attractive destination for SMBC Group to invest in?

The fundamental appeal of the Indian market lies in its GDP growth potential, demographics and aspiration. India now has the world's largest population, and its demographic bonus period is expected to continue until around 2050 and we see significant growth in GDP during this period.

Given that retail credit penetration remains low compared to the global standard and as financial sector growth is a multiple of GDP growth, we see a significant opportunity for SMBC Group to grow in India. Moreover, the recent rapid adaption of digital infrastructure including Aadhaar, UPI and GST reforms are additional tailwinds.

On the investment and trade area, given the rewiring of the supply chains due to geo-political considerations, we believe India would be one of the beneficiaries. Underpinning our confidence in the India growth story is the India-Japan relationship, which was built during the PM Modi-PM Abe era and which continues to strengthen across various areas including investment.

Building on our longstanding collaboration in infrastructure and manufacturing, we expect cooperation to broaden into digital, artificial intelligence, and clean energy. The SMBC Group is committed to firmly supporting the expansion of these investment flows. With a broader footprint in India, SMBC Group would be able to accelerate investment and trade flows from Japan.

Q How is SMBC Group promoting and deepening trade and business operations in India? Besides banking, which sectors does SMBC/ SMFG find attractive as potential investments worth looking at in the future?