India on Monday invited Japan to outsource business to tackle the problem arising out of high percentage of aging population.
"This was a win-win situation for both countries. Business outsourcing was the only way to overcome the demographic handicap and yet sustain profitability and growth," Planning Commission Member N K Singh said in Tokyo.
Singh also highlighted India's economic advantage and the new opportunities deregulation and reforms have created for Japanese investment particularly in infrastructure.
Participating at a symposium organised by Japanese government, Singh also listed ports, airports privatisation, roads, power and agro-processing as sectors which could attract Japanese investment.
Several economists and experts in international relations including Stephen Cohen of Brookings Institute, Gong Shao-peng of Foreign Affairs Collects, Yoshimi Ishikawar of Akita College participated in the symposium which highlighted the strategic importance of India and prospects for Indo-Japanese cooperation.
Singh said the shifting consumption pattern of India's rich urban middle class for white and brown goods offered great scope for Japanese companies, which have excelled in mass consumption goods like television, entertainment and cooling systems.
Giving the rationale how business outsourcing from India would benefit Japan, Singh said this can postpone large-scale migration and can help buy time for enabling countries to redesign production patterns, alter nature of economic activities along with other measures to diminish the impact of demographic challenges.
A credible alternative would be to enhance the profitability of capital dramatically, secure increased participation of women into the workforce, postpone retirement even beyond the present limits and alter the nature of current activities, he said.
The other alternative was to accept an aggressive migration policy on a scale so far unprecedented and Japan alone would require 600,000 migrants every year to sustain the workforce at the current levels, he said.
But these alternatives had limitations as they involved several policy issues including creation of a transparent, non-discriminatory multilateral framework on migration, harmonising the issue of brain-drain and a fiscal policy which enable the gains of wealth and value creation to be equitably shared.
