Cementing its economic ties with India, Japan on Wednesday extended over USD 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 overseas development assistance (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 said after Singh concluded official talks with his Japanese counterpart Taro Aso.
"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.
"I told the (Japanese) Prime Minister that the sky is the limit for Japanese investment into India and requested him to encourage Japanese industry to come to India. On our part we will do all that is necessary to create a congenial investment climate," Singh told reporters at a joint press conference with Aso. The DFC Project of the Indian Railways was conceived by Singh as an important infrastructure ramp-up project for the country.
Japan has committed an ODA aid of Rs 1,7045 crore for the first phase of DFC. This amounts to 62 per cent of the total cost of Rewari-Vadodara. Tokyo is also committed to providing a similar loan for the balance stretch of the Western corridor.
The projects supported under the 99,019-million yen (Rs 4,555 crore) package includes Chennai Metro Project (21,751 million yen), Second phase of Hyderabad Outer Ring Road Project (42,027 million yen), Capacity Development for Forest Management and Personnel Training Project (5,241 million yen) and Micro, Small and Medium Enterprises Energy Saving Project (30,000 million yen).
On the sidelines of the Singh-Aso summit, the Japan Bank for International Cooperation and the Delhi Mumbai Industrial Corridor Development Corporation Limited signed an MoU under which the Japanese side has agreed to loan up to USD 75 million.
The two sides agreed to utilise the fund for undertaking a feasibility studies for mutually beneficial projects.
The Department of Science and Technology and Photon Factory also signed an MoU here to further strengthen the cooperation between the scientists in the two nations.
The MoU will allow setting up an Indian beam line in the Photon factory at the Institute of Materials Structure Science.
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