Untied Loan to State Bank of India
Supporting Domestic Production and Sales of Japanese Automobile Manufacturers in India
Manufacturing and Services
October 28, 2020
The Japan Bank for International Cooperation (JBIC, Governor: MAEDA Tadashi) signed on October 27 a loan agreement amounting to up to USD600 million (JBIC portion) with the State Bank of India (SBI). The loan is co-financed with Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd., the Shizuoka Bank, Ltd., and the Bank of Yokohama, Ltd. The total co-financing amount is USD1,000 million. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.
SBI is the largest state-owned commercial bank in India. This loan is intended to provide, through SBI, the funds necessary for the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers as well as for the provision of auto loans for the purchase of Japanese automobiles.
India, the world's 5th largest automobile market in FY2019 in terms of the units sold, is expected to grow further, and Japanese automobile manufacturers account for the majority share in India. The country is, therefore, an important market for Japanese automobile manufacturers to expand their business overseas. However, economic activities in India have been stagnating due to the COVID-19 pandemic, and this is expected to hinder the growth of automobile sales. The loan will help promote smooth funds flows for the whole range of business operations of Japanese automobile manufacturers in India, from production to sales, thereby serving to maintain and improve the international competitiveness of Japanese industry.
The government of India is striving to stimulate domestic manufacturing with its “Make in India” initiative, and the automobile industry is the core of such manufacturing. Also, in response to the COVID-19 pandemic, the government of India announced economic measures for local, small and medium-sized enterprises, and this financing will assist these measures as well.
As Japan's policy-based financial institution, JBIC will continue to support improvement of Japanese companies' business environment in India by drawing on its various financial facilities and schemes and performing its risk-assuming function.
For further information
Mr.Sugimoto or Ms.Imai Press and External Affairs Division, Corporate Planning Department Tel: +81-3-5218-3100 Fax: +81-3-5218-3955