India, Japan launch USD 600 million fund for climate and environment projects
The India Japan Fund will focus on investing in environmental sustainability and low carbon emission strategies
India and Japan have launched a USD 600 million fund for climate and environment projects. The India-Japan Fund (IJF) has been launched in collaboration by India's National Investment and Infrastructure Fund (NIIF) and the Japan Bank for International Cooperation (JBIC). The fund has JBIC and the Government of India as anchor investors, the Ministry of Finance announced on Wednesday (October 4, 2023).
This joint initiative signals a key dimension of collaboration between the two countries in the shared priority area of climate and environment. The India Japan Fund will focus on investing in environmental sustainability and low carbon emission strategies and aims to play the role of being a ‘partner of choice’ to further enhance Japanese investments into India.
"The setting up of India Japan Fund represents a key milestone in the strategic and economic partnership between the Government of Japan and Government of India," said the Ministry of Finance.
The announcement marks NIIF’s first bilateral fund, with the Government of India contributing 49% of the target corpus and the remaining 51% contributed by JBIC. The Fund will be managed by NIIF Limited (NIIFL); JBIC IG (a subsidiary of JBIC) will support NIIFL in promoting Japanese investments in India, the ministry added.
INDIA-JAPAN ECONOMIC COOPERATION
Meeting Japanese Prime Minister Fumio Kishida in New Delhi on March 20, 2023, Prime Minister Narendra Modi had described economic cooperation as a vital component of the India-Japan Special Strategic and Global Partnership, saying it was crucial for promoting peace, prosperity, and stability in the Indo-Pacific region.
Japanese Prime Minister Fumio Kishida has set an ambitious target of achieving 5 trillion yen in public and private investment and financing from Japan to India over five years starting from 2022. The Indian government has identified 15 key sectors, including telecommunications equipment, automobiles, and applied chemical batteries, eligible for subsidies. As a result, Japanese investment has notably surged in critical technological areas like medical equipment, electronics, and household electric appliances.
Japan is also financing several major infrastructure projects in India, including the High-Speed Rail (Bullet Train) project between Mumbai and Ahmedabad which will use Japanese Shinkansen (Bullet Train) technology.
India and Japan signed documents for a 300 billion Yen Japanese loan for the project on the sidelines of the meeting between Prime Modi and Japanese PM Kishida in New Delhi on March 20, 2023. This was the fourth tranche of the total of Rs 18,000 crore loan by Japan International Cooperation Agency (JICA) for the High-Speed Rail project.
Additionally, Japan is also supporting the development of India's North Eastern Region through the establishment of the 'Japan-India Act East Forum.'
At the same time, in a bid to enhance tourism, Japan has officially designated 2023 as the 'Japan-India tourism exchange year'.