Untied Loan to State Bank of India
Supporting Enhancement of Supply Chain Resilience of Japanese Automobile Manufacturers in India
- Region: Asia
- Manufacturing and Services
- Untied Loans
The Japan Bank for International Cooperation (JBIC, Governor: MAEDA Tadashi) signed on March 30 a loan agreement amounting to up to USD600 million (JBIC portion) with the State Bank of India (SBI). The loan is co-financed with MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, the Shizuoka Bank, Ltd., the Bank of Yokohama, Ltd., the Chiba Bank, Ltd., and the Bank of Fukuoka, Ltd., with a total co-financing amount of USD1,000 million. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.
In October 2020, JBIC provided, through SBI, the funds necessary for the manufacturing and sales business of Japanese automobile manufacturers in India, where the economy has been stagnating due to the COVID-19 pandemic*1
. As the spread of COVID-19 is currently slowing in India and automobile sales are showing a sharp recovery, the suppliers and dealers that constitute the supply chains of Japanese automobile manufacturers in India require the new funds for their business operations.
The loan will financially support the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers in India, as well as the sales of environmentally friendly vehicles manufactured by Japanese automobile manufacturers, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry in the post-COVID-19 era.
As the Government of India introduced a new fuel economy regulation for automobiles from 2017, and a new emission regulation (Bharat Stage 6) from 2020 in order to reduce greenhouse gases and solve the problem of increasing air pollution, Japanese automobile manufacturers are focusing on the manufacturing and sales business of environmentally friendly vehicles. The loan promotes the spread of environmentally friendly vehicles in India and is in line with these environmental preservation policies of India.
As Japan's policy-based financial institution, JBIC will continue to support the improvement of Japanese companies' business environment in India by drawing on its various financial facilities and schemes, and by performing its risk-assuming function.