Japanese business leaders and investors on Friday said India is an attractive manufacturing base and market that has a huge potential for business but sought more "free and open" investment climate and relaxation of land acquisition policies.

Chairman of Keidanren (Japan Business Federation), Japan's most influential business lobby, Sadayuki Sakakibara, while addressing the business forum meeting attended by Prime Minister Narendra Modi especially referred to the need for relaxing norms on land acquisition and suggested that India should have bidding processes.

He said that Japanese companies have "deepest regards for Modi's "strong leadership" and hoped that his government will address these issues.

"There is a high potential ahead for the bilateral collaboration to reach its full potential. There is a need for further improvemennt....There is a need for free and open investment climate," he said.

He also noted the progress made on Goods and Services Tax (GST) in India.

Referring to the growing friendship between India and Japan in various fields, including political and diplomatic, he said Japanese firms have benefited from this.

India with 1.2 billion people, a big middle class segment and an competitive workforce, is an attractive destination as a manufacturing base and market, he said.

He noted that 1,200 Japanese companies are already in India and Japanese FDI has grown six times in 10 years.

He appreciated Modi's campaign like 'Make in India' and 'Digital India'.

He said the ninth meeting of India-Japan Business Forum, which was held earlier in the day, had made a number of recommendation and these should be implemented.

Akio Mimura, Chairman of Japan Chamber of Commerce and Industries, said he looks forward to building economic ties.

He appreciated India's reform measures and referred to Delhi Mumbai Industrial Corridor (DMIC), saying it is the symbol of India-Japan cooperation.

He said there is need to invest further in such mega projects.

The bilateral trade between the two countries stood at USD 14.51 billion in 2015-16. India received USD 20.96 billion FDI from Japan during April 2000 and March 2016.

Free and open investment climate urged as Japanese investors seek relaxed land acquisition norms and competitive project bidding. Japanese business leaders urged policy changes to enhance bilateral investment by advocating a free and open investment climate, specifically calling for relaxation of land acquisition norms and adoption of competitive bidding processes. They noted progress on the Goods and Services Tax, recommended implementation of India Japan Business Forum proposals, and encouraged further investment in mega projects such as industrial corridors to strengthen foreign direct investment and manufacturing collaboration.