Japan extends $1 bn soft loan package to India

TOKYO: Cementing its economic ties with India, Japan on Wednesday extended over $1 billion (Rs 4,555 crore) soft loan assistance for four major projects in India.

During Prime Prime Minister Manmohan Singh's visit to Japan, the two countries also finalised a pact to push ahead the Dedicated Freight Corridor (DFC) in Western region of India.

Singh, who is on a three-day official visit to Japan, said talks had moved forward on implementing the flagship DFC project and the Delhi-Mumbai Industrial Corridor Project.

"Technical issues relating to the DFC have been resolved to our mutual satisfaction and we are in the process of finalising an ODA loan for this very important infrastructure project," Singh told Indian and Japanese businessmen.

Work on both corridors of the DFC will commence during the current financial year, an official statement here said after Singh concluded official talks with his Japanese counterpart Taro Aso here.

"Japan is a major economic partner of India. We are grateful for the economic assistance that we have got from Japan. India today happens to be the largest recipient of Japanese ODA," Singh said.

India has been the top recipient of Japanese soft loan assistance for the last five consecutive years, beginning fiscal 2003, and the yen-loan commitments for India has been increasing every year.

The latest package would support four large-scale projects in areas of transportation, environment and finance and would be made available through Japan International Cooperation Agency (JICA) at interest rate ranging from 0.3- 1.2 per cent per annum and 15-30 years of repayment period.