Japan Commits Rs 12,800 Crore Loan to Finance Indian Projects

On February 21st, 2024, Japan’s government signed a yen loan agreement worth 232.209 billion yen, approximately Rs 12,800 crore, with India to fund development across nine crucial infrastructure and innovation promotion projects that aim to strengthen bilateral economic ties.

Key Development Areas Funded

North East Connectivity

Over Rs 2600 crore sanctioned for improving road network linkages across North East states to fill infrastructure gaps aiding greater trade.

The project in Nagaland will help develop tertiary level medical service delivery by developing a medical college hospital aiming for universal health coverage.

Boosting Startups

Around Rs 1900 crore allotted for skill development and innovation promotion targeting women entrepreneurs and MSME segment in Telangana. The project will empower women and rural population and support business expansion of MSMEs

Urban Mobility Upgrades

Rs 2650 crore has been marked for constructing key peripheral ring road around Chennai to ease traffic congestion through 37 km elevated corridor.

The fifth tranche of the dedicated freight corridor project will help in construction of new dedicated freight railway system. It will promote modernisation of intermodal logistics system enabling handling of increased freight traffic.

Sustainable Agriculture

Climate smart horticulture initiatives in Haryana receive Rs 640 crore assistance for enhancing farm productivity and resilience.

Strategic Context

The partnership consolidates Japan as a lead development financier for India with over Rs 5 lakh crore committed historically, funding priorities from urban transit to industrial corridors.

India-Japan relations

India and Japan have had a long and fruitful history of bilateral development cooperation since 1958. Japan has remained at forefront of investments in India’s infrastructure growth with commitments exceeding $45 billion. Both nations collaborate in the Indo-Pacific region and coordinate closely on international platforms like G20 and United Nations.
In 2023,Consul General of Japan inaugurated the Japan Cultural Centre in Ahmedabad. He announced that Japanese companies are set to invest 5 trillion yen in India by 2027.

Indo-Japan Fund

In October 2023, the National Investment and Infrastructure Fund has entered into a collaboration with Japan Bank for International Cooperation (JBIC) to unveil a $600 million India-Japan Fund. The fund will have JBIC and Government of India as anchor investors. The Its primary focus is on environmental sustainability and low carbon emission initiatives, while also facilitating Japanese investments in India.
The India-Japan Fund, later announced that it will invest 400 crore in Mahindra Last Mile Mobility Ltd (MLMML), a subsidiary of Mahindra & Mahindra (M&M).


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