Tokyo to back India-bound business with 1.5tn yen


Tokyo to back India-bound business with 1.5tn yen

TOKYO -- The Japanese government will create a 1.5 trillion yen ($12.3 billion) loan and investment program to help domestic companies do business in India.

 The money will go toward projects like power plants built with Japanese technology and factories that help manufacturers gain Indian market share. Prime Minister Shinzo Abe will announce the initiative during his trip later this week to India, where he is to meet with his pro-Japanese counterpart, Narendra Modi.

     Policy lenders Japan Bank for International Cooperation and Nippon Export and Investment Insurance now provide about 200 billion yen annually in loans, loss coverage and other financing for ventures in India. Abe's government intends to increase this flow by 20-30%, exhausting the 1.5 trillion yen in five to six years. This funding would be separate from proposed Japanese financing for a high-speed rail line.

     The government envisions projects like a planned coal-fired power station qualifying for the new financing. Japanese manufacturers excel at the high-efficiency generating equipment that the plant in southeastern India will use. Project costs will run to a steep 500 billion yen.

     Tokyo aims to give Japanese companies a foot in the door for such contracts by making financing available. JBIC could partner with private-sector banks on such loans. NEXI will increase export insurance for shipments of Japanese-made automotive, electronic and other components to India for final assembly.

     Many Japanese companies are drawn by India's potential as a market but wary of its onerous regulations, inadequate infrastructure and other drawbacks. By removing some of the financial uncertainty of doing business there, the government hopes to encourage corporations in a broad range of industries to increase investment.

     Tokyo also wants to strengthen economic ties between the two countries. Japan ranks fourth in foreign direct investment in India, well ahead of 17th-ranked China. At the summit Saturday, Modi will agree to adopt Japanese bullet train technology for a railway between Mumbai and AhmedabadThe Japanese government is offering to lend more than 1 trillion yen for this project as it tries to counter China's efforts to extend its influence in Asia.

     Abe is expected to tell the Indian prime minister himself about the separate financing initiative, which fits with the Modi government's aim of attracting foreign investment to India. (Nikkei)

Bình luận của bạn