Japan to set up $12 billion financial facility for ''Make in India'' initiative

New Delhi: Japan will set up a new financial facility worth 1.5 trillion yen ($12 billion) under the "Make in India" initiative to promote direct investment of Japanese companies and trade from Japan to India, it was announced on Saturday.

A joint statement issued following talks between Prime Minister Narendra Modi and his visiting Japanese counterpart Shinzo Abe said that "Modi welcomed the `Japan-India Make-in-India Special Finance Facility` up to 1.5 trillion yen by Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC), which aims to promote direct investment of Japanese companies and trade from Japan to India, to support their business activities with counterparts in India, including development of necessary infrastructure, and to help materialise Make-in-India policy of the Government of India".

"We take this as a sign of confidence in `Make in India` programme and the Indian economy," Foreign Secretary S. Jaishankar said in a media briefing later.

"That a country explicitly created a fund labelled Japan-India Make-in India Fund has its own symbolism. It tells you the seriousness with which Japan looks at its economic prospects in India," he said.

He also said that this year Japan has decided to offer 600 billion yen ($5 billion) under the Official Development Assistance (ODA) to India for infrastructure development.

"About 400 billion yen is committed this financial year and 200 billion yen carries over to the coming year," Jaishankar stated.

This year`s ODA funds will be utilised for 13 big ticket projects. These are the Western Dedicated Freight Corridor, the Ahmedabad metro project, modernisation of ship recycling yards in Gujarat, the Mumbai trans-harbour link, a peripheral ring road around Bengaluru, the Chennai metro project, the Tuticorin outer harbour project, the Odisha transmission improvement project, the Odisha sanitation project, the Madhya Pradesh transmission project, Ganga rejuvenation, horticulture and irrigation in Jharkhand, and road connectivity projects in the northeast.

"Japan also has agreed to implement the concept of Japan industrial townships in India," Jaishankar said.

He also said that a new industrial corridor will be set up between Chennai and Bengaluru "with a ballpark cost estimate of $5.5 billion".

He said that of the $35 billion investment in India over the next five years that Japan had committed when Modi visited Tokyo last year, a large part has been covered in the space of a year.