* Says U.S. economy is getting better month by month
* Says hopes to spend some money in India
* Says looking at industries with modest rate of change
* Says Japan crisis will not hurt global growth
* Says Berkshire board would back Ajit Jain as successor (Adds details, quote on Ajit Jain in paragraph 8,9,10)
By Santosh Nadgir and Sayantani Ghosh
BANGALORE, March 22 (Reuters) - Billionaire Warren Buffett on Tuesday said he is looking to invest in large countries like India, China and Brazil, but added that restrictions on foreign ownership in India's insurance industry could act as a deterrent in the sector.
Speaking to reporters on his maiden visit to India, Buffett also said the U.S. economy was improving and that the devastating earthquake in Japan would not hurt global growth.
"India is a very logical place to look so I hope I spend some money here," Buffett told reporters in the southern Indian city of Bangalore, adorned in a flower garland and a red "teeka" -- a dash of vermillion placed on foreheads as a symbol of good wishes.
Buffett also said the U.S. economy was improving. "The American economy is getting better month by month," he said. "The more India prospers or China prospers, the more the United States is going to prosper over the long term," he added.
He also said the earthquake in Japan - which has left at least 21,000 people dead or missing and has triggered the world's worst nuclear crisis in a quarter of a century -- would not hurt global growth.
"In terms of its effect on the world economy over any period of time, it's not going to be that important," he said. "It's going to be important for Japan, obviously, but it will not stop the growth of the world economy," he added, a day after he said the crisis created a "buying opportunity."
Buffett, nicknamed the Oracle of Omaha, a reference to his prodigious skill in picking out great investments that are followed closely by investors, and his Omaha, Nebraska origins, said he was looking at industries with modest rates of change.
The 80-year old investor who is yet to name a successor to take over his $200-billion empire, skirted questions on the succession plan but praised Berkshire veteran Ajit Jain for smoothly running much of the company's insurance business.
"He loves what he does, he's not looking to take my job. If he was, the board of directors would probably put him in there in a minute," he said.
Four names top the list of potential candidates to succeed Warren Buffett as chief executive of Berkshire Hathaway, including that of India-born Ajit Jain.
When asked if he would invest in India's $60 billion information technology industry or in the semiconductor business, Buffett said he preferred sectors he had expertise in.
"I think about the soft drink industry or the chewing gum industry, some thing that's much easier for me to understand," he said.
Berkshire owns a stake in Wrigley since 2008, when it poured $6.5 billion into Mars Inc's $23 billion acquisition of the chewing gum maker. And Coca-Cola is one of Berkshire's biggest investments.
Buffett said he liked large countries like India, China, Brazil, United Kingdom and Germany. "We need to invest billions of dollars and that's very tough in emerging markets," he said.
"I don't consider India as an emerging market, I consider India as a very big market. We continue to look at large countries like India."
Earlier this month, Berkshire Hathaway agreed to become a corporate agent for India's Bajaj Allianz General Insurance, marking its entry in to the insurance sector in Asia's third-largest economy.
Indian rules do not allow foreign firms to own more than 26 percent of an insurance company - a move that is seen by many overseas firms as restrictive.
The insurance portal, owned entirely by Berkshire, will sell motor insurance policies for Bajaj Allianz, avoiding the foreign ownership restrictions.
"It would be more attractive to us if we could buy more than 26 percent," Buffett said. "I would say that for the time being, and perhaps for some time, our activities in insurance here will be at the agency level rather than at the underwriting level," he said.
Buffett was in Bangalore to visit the local arm of TaeguTec, a unit of Israeli metal-cutting tool maker ISCAR Metalworking, in which Berkshire has a majority stake. He is also expected to meet policymakers and company executives.
Ranked the world's third-richest man by Forbes magazine, Buffett is also using his visit to India to encourage philanthropy.
Visiting South Korea on Monday, Buffett said Berkshire, which had $38 billion of cash equivalents at the end of 2010, was looking for more large-scale acquisitions anywhere in the world. (Reporting by Sayantani Ghosh and Santosh Nadgir; Writing by Sumeet Chatterjee; Editing by Jui Chakravorty)