Chennai: The prospect of increased Japanese investments in India depended on significant improvement in the existing operational conditions, Akira Hayashi, Japanese Ambassador to India said on March 20.

Addressing the investment meet organised by the Confederation of Indian Industries (CII), he said improvements were mainly required in infrastructure such as roads, electricity and telecommunications.

He said Japanese companies already operating in India have also indicated other impediments like opaque and arbitrary bureaucratic procedures, octroi and different taxation policies among states and protection of intellectual property.

"India needs to implement measures encapsulated under the banner of the second generation reforms if the Indian economy is to realise is full potential," he said, adding that this include among others labour reforms, power sector reforms and tax reforms.

He said Japan through its Official Development Assistance (ODA) had contributed to the improvement of the investment environment by assisting the building up of the economic infrastructure adding that it would be continued.

Foreign direct investment (FDI) inflows from Japan to India was $ 14.5 billion in 2001, while the same to China was $ 144 billion he said. pointing out that the plain fact was that Japanese investment in India was nowhere near its potential.

PTI